Latest news with #SensientTechnologiesCorp
South China Morning Post
29-04-2025
- Health
- South China Morning Post
How bugs and beetroot juice could play roles in the race to replace artificial dyes in food
Scientist Abby Tampow hovered over tiny dishes of red dye, each a slightly different ruby hue. Her task? To match the synthetic shade used for years in a commercial bottled raspberry dressing – but using only natural ingredients. 'With this red, it needs a little more orange,' Tampow said, mixing a slurry of purplish black carrot juice with a bit of beta-carotene, an orange-red colour made from algae. Tampow is part of the team at Sensient Technologies Corp – one of the world's largest dye makers – rushing to help a salad dressing manufacturer and thousands of other American businesses meet demands to overhaul colours used to brighten products from cereals to sports drinks. Last week, United States health officials announced plans to persuade food companies to voluntarily eliminate petroleum-based artificial dyes by the end of 2026. US Health Secretary Robert F. Kennedy Jnr called them 'poisonous compounds' that endanger children's health and development, citing limited evidence of potential health risks. The federal push follows a flurry of state laws and a January decision to ban the artificial dye known as Red 3 – found in cakes, candies and some medications – because of cancer risks in lab animals. Social media influencers and ordinary consumers have ramped up calls for artificial colours to be removed from foods. Why we waste food when we know it's wrong – and how to change our habits The switch to natural colours may not come quickly The US Food and Drug Administration (FDA) allows about three dozen colour additives, including eight remaining synthetic dyes. But making the change from petroleum-based dyes to colours derived from vegetables, fruits, flowers and even insects will not be easy, fast or cheap, said Monica Giusti, an Ohio State University food colour expert. 'Study after study has shown that if all companies were to remove synthetic colours from their formulations, the supply of the natural alternatives would not be enough,' Giusti said. 'We are not ready.' It can take six months to a year to convert a single product from a synthetic dye to a natural one. And it could require three to four years to build up the supply of botanical products necessary for an industry-wide shift, Sensient officials said. 'It's not like there's 150 million pounds of beetroot juice sitting around waiting on the off chance the whole market may convert,' said Paul Manning, the company's chief executive. 'Tens of millions of pounds of these products need to be grown, pulled out of the ground, extracted.' Beetroot juice is seen in a mixing tank used in the making of colouring at Sensient Technologies Corp. Photo: AP To make natural dyes, Sensient works with farmers and producers around the world to harvest the raw materials, which typically arrive at the plant as bulk concentrates. They are processed and blended into liquids, granules or powders and then sent to food companies to be added to final products. Natural dyes are harder to make and use than artificial colours. They are less consistent in colour, less stable and subject to changes related to acidity, heat and light, Manning said. Blue is especially difficult. There are not many natural sources of the colour, and those that exist can be hard to maintain during processing. Also, a natural colour costs about 10 times more to make than the synthetic version, Manning estimated. 'How do you get that same vividness, that same performance, that same level of safety in that product as you would in a synthetic product?' he said. 'There's a lot of complexity associated with that.' Trump administration's proposed change to Endangered Species Act sparks concern The insects that could make 'Barbie pink' naturally Companies have long used the Red 3 synthetic dye to create what Sensient officials describe as 'the Barbie pink.' Creating that colour with a natural source might require using a cochineal, an insect about the size of a peppercorn. The female insects release a vibrant red pigment, carminic acid, in their bodies and eggs. The bugs live only on prickly pear cactuses in Peru and elsewhere. About 70,000 cochineal insects are needed to produce 1kg (about 2.2lbs) of dye. 'It's interesting how the most exotic colours are found in the most exotic places,' said Norb Nobrega, who travels the world scouting new hues for Sensient. Artificial dyes are used widely in US foods. About 1 in 5 food products in the US contains added colours, whether natural or synthetic, Manning estimated. Many contain multiple colours. US Food and Drug Administration (FDA) commissioner Marty Makary holds up a jar of beet juice during an announcement of the FDA's intent to phase out the use of petroleum-based synthetic dyes in the nation's food supply. Photo: Reuters FDA requires a sample of each batch of synthetic colours to be submitted for testing and certification. Colour additives derived from plant, animal or mineral sources are exempt but have been evaluated by the agency. Health advocates have long called for removing artificial dyes from foods, citing mixed studies indicating they can cause neurobehavioural problems, including hyperactivity and attention issues, in some children. The FDA says that the approved dyes are safe when used according to regulations and that 'most children have no adverse effects when consuming foods containing colour additives'. But critics note that added colours are a key component of ultraprocessed foods, which account for more than 70 per cent of the American diet and have been associated with a host of chronic health problems, including heart disease, diabetes and obesity.
Yahoo
15-02-2025
- Business
- Yahoo
Sensient Technologies Corp (SXT) Q4 2024 Earnings Call Highlights: Robust Growth in Revenue and ...
Fourth Quarter Revenue: $376.4 million, up from $349.3 million in the previous year. Fourth Quarter Operating Income: $42 million, compared to $8.1 million in the prior year. Adjusted Operating Income: $42.9 million in Q4 2024, a 20.8% increase in local currency. Local Currency Revenue Growth: 8.9% in Q4 2024. Local Currency Adjusted EBITDA Growth: 18.8% in Q4 2024. Local Currency Adjusted EPS Growth: 29.4% in Q4 2024. Full Year Revenue Growth: 7.4% in local currency for 2024. Full Year Adjusted EBITDA Growth: 8.3% in local currency for 2024. Color Group Revenue Growth: 14% in Q4 2024, 7.3% for the full year. Color Group Operating Profit Growth: 27.4% in Q4 2024, 14.2% for the full year. Color Group Adjusted EBITDA Margin: 22.1% for the full year, up 110 basis points. Flavors and Extracts Revenue Growth: 3.4% in Q4 2024, 7.1% for the full year. Flavors and Extracts Operating Profit Growth: 18.4% in Q4 2024, 10.8% for the full year. Flavors and Extracts Adjusted EBITDA Margin: 16.1% for the full year, up 30 basis points. Asia Pacific Group Revenue Growth: 25.2% in Q4 2024, 13% for the full year. Asia Pacific Group Operating Profit Growth: 41.7% in Q4 2024, 14.1% for the full year. Asia Pacific Group Adjusted EBITDA Margin: 22.7% for the full year. Free Cash Flow: $98 million in 2024, up 19.7% from 2023. Total Debt: $633 million as of December 31, 2024. Net Debt to Credit Adjusted EBITDA: 2.3 times as of December 31, 2024. Capital Expenditures: $59 million in 2024, expected to be $70 million to $80 million in 2025. 2025 Revenue Guidance: Mid-single digit local currency growth expected. 2025 Adjusted EBITDA Guidance: Mid to high-single digit local currency growth expected. 2025 Adjusted EPS Guidance: High single digit to double digit local currency growth expected. Warning! GuruFocus has detected 4 Warning Signs with EHMEF. Release Date: February 14, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Sensient Technologies Corp (NYSE:SXT) reported strong fourth quarter results with 8.9% local currency revenue growth and 18.8% local currency adjusted EBITDA growth. The Color group achieved 14% local currency revenue growth and 27.4% local currency operating profit growth in Q4 2024. The Asia Pacific Group delivered exceptional performance with 25.2% local currency revenue growth and 41.7% local currency operating profit growth in Q4 2024. The company successfully reduced its leverage ratio to 2.3 at the end of 2024 from 2.6 at the end of 2023. Sensient Technologies Corp (NYSE:SXT) anticipates continued growth opportunities in natural colors, driven by increasing consumer demand and regulatory shifts. Foreign currency translation reduced EPS by approximately 1% in the fourth quarter of 2024. The company faces potential headwinds from tariffs, which could impact pricing and profitability. Sensient Technologies Corp (NYSE:SXT) expects a foreign exchange headwind of approximately $0.10 to $0.15 in 2025. The conversion from synthetic to natural colors may lead to some gross margin erosion due to higher raw material costs. The first quarter of 2025 is expected to start slowly, with projected local currency revenue growth between 3% and 5%. Q: Can you provide more specifics on the increase in activity and business wins related to natural products, particularly in flavors and extracts? A: Paul Manning, CEO, explained that the company saw double-digit growth in revenue and volume for natural colors in their food colors business. Approximately 80% of new product launches globally contain natural colors, and some existing brands are converting from synthetic to natural colors, which has positively impacted the top and bottom lines. The conversion to natural colors is seen as a significant opportunity for Sensient. Q: What is the margin differential between natural and synthetic colors, and how does the 10x volume differential impact costs for customers? A: Paul Manning, CEO, noted that the raw material cost of synthetic colors is very low in packaged products. While natural colors may increase costs, they still represent a small portion of overall raw material expenses. Sensient expects revenue to increase with natural colors, with potential erosion in gross margin but stable operating profit margins due to a relatively fixed SG&A base. Q: Can you provide an estimate of the penetration rate of natural colors in the US market compared to Europe? A: Paul Manning, CEO, stated that in Europe, over 80% of the market has converted to natural colors, while in the US, about one-third of the market has converted. Latin America has a penetration rate of 25% to 30%, and Asia Pacific varies by country, with Japan having a high conversion rate and China being lower. Q: What is driving the strong growth in the Asia Pacific region, and what underpins the high single-digit growth outlook for 2025? A: Paul Manning, CEO, attributed the growth to years of investment in the region, focusing on elevating the portfolio, sales force, and technical applications. The region has seen significant new sales wins and geographic expansion. The high single-digit growth outlook is supported by continued strategy execution and emphasis on new wins and customer service. Q: Are there any other synthetic color compounds besides red 3 being considered for regulation or conversion to natural colors? A: Paul Manning, CEO, mentioned that while red 3 is small, other synthetic colors like red 40, yellow 5, and yellow 6 are being considered in state legislation. The FDA has only banned red 3 so far, but market dynamics and potential state actions could drive further conversions to natural colors. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
