The current trade and tariff landscape has created additional layers of complexity within Milwaukee-based
Sensient Technologies Corp.’s business.
The maker of colors, flavors and other specialty ingredients expects the impact from President Donald Trump’s tariff polices to reach about $10 million. In 2024, the company generated about $1.5 billion in revenue.
“We believe we’ll be able to address the impact of tariffs by taking price,” said
Paul Manning, chairman, president and CEO of Sensient Technologies Corp., during the company’s latest earning’s call.
Another recent federal policy change, the FDA’s decision to phase out eight artificial food dyes from the U.S. supply chain, could be a tailwind for Sensient.
"In the last 90 days, we have experienced some profound changes. First, and most notably, bans on synthetic colors in the United States,” said Manning. “This is an outstanding development and is the most significant revenue opportunity in Sensient's history."
He said Sensient’s capital expenditures will “remain elevated” over the next several years as the company continues to invest in its natural color capabilities. A lot of this spending will be related to increasing production capacity in the U.S.
The FDA’s decision to ban artificial dyes could drive “substantial conversion activity” in Latin America, Manning explained. In the U.S. and Latin America, Sensient’s synthetic colors revenue for the food and beverage market is approximately $110 million.
"There is a significant opportunity for Sensient to outpace our midterm outlook on natural colors in the coming years," said Manning.
Tariffs on imported Chinese dehydrated products that compete against Sensient’s products could also improve demand.
Manning took the time to highlight two of Sensient’s newest natural color innovations. First is a new natural blue product, called Marine Blue Capri. The product was designed for use in the beverage market. The second innovation, Sienna Fortis, allows customers to achieve a light brown shade without the use of caramel coloring.
"With cocoa prices rising dramatically, this product allows customers to reduce cocoa usage and avoid all of the related sustainability concerns with that crop, while maintaining a consistent visual appearance in their product," said Manning. "With the current tariff environment, this solution also offers a cost competitive alternative."
For the first quarter of 2025, Sensient reported a revenue increase of 2% to $392.3 million versus last year’s first quarter results of $384.7 million. On a local currency basis, revenue increased 4.1%.
