Sensient’s Color Revenue Jumps 18% as It Targets a $1 Billion Natural Color Run Rate by the End of 2028
Sensient, which calls itself the world's largest food color company, said it recognized about $30 million in new natural color conversion revenue last quarter, and its CEO said FDA synthetic color certifications are down nearly 10%.
The switch from synthetic dyes is showing up in the numbers. Sensient Technologies, which calls itself the world’s largest food color company, reported an 18% jump in color revenue and said it expects natural color conversions to approach an incremental $1 billion run rate as it exits 2028.
TLDR
- Color Group revenue rose 18.1% to $210.3 million in the third quarter, driven mainly by volume.
- Sensient recognized about $30 million in new natural color conversion revenue in the quarter, about $75 million so far this year.
- It expects to approach a $1 billion incremental run rate by the end of 2028, with most of that still ahead.
- CEO Paul Manning warned that launch dates can slip.
The Quarter
Total revenue rose 10.6% to $455.8 million, operating income rose 25.5% to $72.4 million and diluted earnings per share rose 29.9% to $1.13, the company reported. Color Group operating income rose 22% to $46.1 million. “Sensient delivered an exceptional third quarter,” Manning said.
The $1 Billion Target
On the earnings call, Manning said one could infer that the conversion revenue recognized so far has an annualized value “north of $160 million.” He said about 20% of the $1 billion target should be closed by the end of 2026, with more in 2027 and the balance in 2028, and that closed business is “not necessarily running at a full run rate.”
The first purchase orders have been roughly 10% of annualized value, Manning said, as customers sell off synthetic inventory while bringing in natural products. He also said “there has been nearly a 10% decline in total FDA synthetic color certifications” over the last 12 months. Certification is the batch-by-batch FDA process synthetic dyes must pass before they can be sold.
The Caution
Timing is the risk. “Multinationals’ launch dates will slip in normal times,” Manning said. He said launch dates have seen “some movements to the left” and “more movements to the right,” meaning more have moved later than earlier. Asked whether the target had shifted later, he said “the vast majority of these conversions will be completed in 2028.” Sensient expects about $250 million of natural color capital spending, mostly in 2026 and 2027, and about $160 million of total capital spending this year. CFO Tobin Tornehl said debt is expected to keep rising.
Why It Matters
FDA has asked food companies to remove the six remaining synthetic dyes by the end of 2027, a voluntary target. Sensient’s numbers are one supplier’s account, and the certification figure comes from its CEO. They point to a shift that is underway, with most of the projected revenue still ahead.
Sources: Sensient Technologies; Q3 2026 earnings call transcript.