Reformulating for the future: Why the food industry is overhauling ingredient lists

Food companies are racing to reformulate their products and respond to growing pressure to move away from artificial dyes and ingredients.

Ingredients suppliers have reported booming sales after Health and Human Services Secretary Robert F. Kennedy Jr. demanded the food industry to phase out use of artificial dyes before 2027. Kennedy's push comes on top of a groundswell of support among consumers for healthier foods with clean-label ingredients lists.

“There is a lot of demand already from customers to reformulate,” Monish Patolawala, CFO of Archer-Daniels-Midland Co., said at the Farm to Market Conference in New York on Wednesday.

Demand for flavors, particularly among beverage producers, raised operating revenue at ADM's nutrition segment by 13% in the first quarter compared to last year. CEO Juan Luciano told investors on an earnings call that “we have seen a lot of activity and requests for our line of natural colors.”

ADM isn't alone in seeing increased demand for healthier and more natural ingredients. Ingredion's texture and healthful solutions unit posted a 34% increase in operating income in the first quarter, driven in part by demand for clean-label solutions.

Similarly, spice giant McCormick has seen "reformulation activity across our customer base" in line with demands from Kennedy and "the new administration," CEO Brendan Foley told investors in March.

Foley noted that while companies are looking to move away from artificial colors, they also want to improve the nutritional profile of their products.

"It isn't just colors," Foley said. "It's also about just working on trends that are certainly positive like hydration, functional foods, high protein."

A number of food giants have already announced their intentions to accelerate the transition to natural dyes. Tyson Foods is "proactively reformulating" the products that still contain petroleum-based dyes, according to CEO Donnie King.

PepsiCo, meanwhile, wants to move its portfolio to natural colors — or at least add more natural options — within the next “couple years," CEO Ramon Laguarta said in April. Brands like Lays will have artificial colors removed by the end of the year.

The snacking giant wants to position itself as a leader in the transition to natural ingredients, and reformulation of big brands is "well underway," according to the PepsiCo CEO.

"We understand that there's going to be consumer demand for more natural ingredients, and we're going to be accelerating that transition," Laguarta said. "Ideally, we can do this in a very pragmatic, orchestrated way as an industry and not create unnecessary panic or chaos.”

CHICAGO — Americans are using weight loss drugs more than ever, standing to transform the food industry by reshaping how and what consumers eat.

Around 6 million adults, or 2% of the U.S. population, use GLP-1s such as Ozempic and Wegovy to lose weight, according to a FAIR Health report. With 137 million Americans — or more than half of all adults — eligible for the drug, the market for these medications is expected to skyrocket.

For food and beverage companies, the implications could be significant. GLP-1s’ hunger-suppressing side effects result in lower consumption of most products. Grocery spending shrank by 6% in households containing at least one person taking weight loss drugs, a Cornell study found.

"The billion-dollar question is: How do I make someone who is not hungry eat again?" Bruno Didier, head of B2B at CookUnity meal delivery service, said during a panel at the IFT FIRST conference in Chicago.

Part of the answer lies in understanding how consumer diet patterns are changing when taking the medications. Research from the University of Arkansas' Agricultural Experiment Station found the drugs don't just affect how much a person eats, but what they eat, too.

Consumers on GLP-1s eat 700 fewer calories a day, and they were most likely to eschew processed foods, sugar-sweetened beverages, refined grains and beef. Only fruit, leafy greens and water showed an overall increase in consumption, the research found.

While consumption of most processed and sugary foods drops when taking GLP-1s, consumers' desire for these foods does not wane. That's creating additional opportunities for food companies to support consumers' dual desires for nutrition and indulgence.

Companies are selling smaller portion sizes, more nutritionally dense options and foods fortified with fiber or vitamins. Nestlé launched a GLP-1-friendly frozen product line in 2024 featuring bowls with whole grains, portion-aligned sandwich melts and pizzas with cauliflower crust.

The shift is a far cry from the past, when companies would offer meal plans with lower calories to help consumers sustain weight loss. Now, food is marketed to help consumers avoid muscle mass loss and maintain their nutrient intake.

"It's really important to make more use of your calories, making sure that each calorie counts for nutrition," David Despain, senior principal nutritionist at Nestlé Health Science, said at IFT FIRST. "Maybe moving on from the past of working on foods that are craveable and more producing foods that are delicious and yet intentional."

Eating, however, is more than just getting nutrition — it's a social and cultural activity that is an essential part of daily life. To capture consumers, more companies are also beginning to play up the social and experiential aspects of their foods.

Lydia Alexander, chief medical officer at Enara Health and a diplomate of the Obesity Medicine Association, said companies should not think "food isn't going to matter anymore" with consumers taking the appetite-suppressing medications.

Instead, businesses offering the most care and intention behind their packaging, messaging and nutrition benefits will win in the GLP-1 era.

"I would say, really … that food is going to matter more than ever, because it's experiential," Alexander said.

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By Oterra

Natural colors aren't new, but the race towards phasing out synthetic colors is. Manufacturers on a deadline need expert partners, says Oterra

The request by the United States' Secretary of Human Health and Services and the Food and Drug Administration for manufacturers to phase out six of the most common FD&C colors by the end of 2026 has handed the food and beverage industry a tight compliance deadline.

Transitioning to natural colors isn’t something that can be done overnight. If you're a manufacturer eyeing the shift to natural colors, the advice from leading natural color producer Oterra is clear: You need to start preparing now.

The trend away from synthetic colors has been underway for a while, which means that companies such as Oterra have developed plenty of expertise.

Oterra first introduced its food colorings to the US at the Philadelphia World’s Fair in 1876. Since then, the company has helped food and beverage companies around the world reformulate products to get the best out of natural products.

Oterra has been gearing up for US growth for the past four years, acquiring companies to widen its product portfolio and global sourcing and manufacturing footprint.

In 2024 the company opened a new 155,000 sq ft headquarters in Mt. Pleasant, WI. that combines innovation and application labs with a new manufacturing and logistics facilities to meet the expected growth of natural colors in the US.

If you’re looking for the perfect recipe for natural colors, here is Oterra’s:

• Start preparing now. Timing depends on the type of natural pigment you’re looking to source. Colors derived directly from some agricultural crops – such as red sweet potatoes - have a nine-month growing cycle. Others can be harvested year-round because they are grown globally.
• Find a supplier you can trust. You need a supplier with a global scope with local expertise. Climate change and geopolitical risks have made geographic diversification essential. Oterra has agronomists and sourcing teams on the ground where our raw materials are grown. And many of the raw materials are grown in multiple locations
• Choose a company with regulatory expertise. In some jurisdictions, natural colors can be considered part of the ingredient list rather than additives. Navigating this correctly requires specialized regulatory insight – not only to ensure accurate labeling and documentation but also to streamline the approval process in each market.
• Product formulation is key. The choice of natural color needs in-depth knowledge of how sugars, sweeteners, fats, proteins, vitamins or functional ingredients affect a product. Also, how pH works with color, stability or other product attributes. Oterra has application centers around the world packed with expertise to help customers convert.
• Food manufacturing expertise. From temperature and pressure to ingredient interactions, all influence how color behaves in a final product. Oterra has seen nearly everything in a production plant and can help you choose the color that works with shear, temperatures and pressure.
• Get ready for the future. Innovation is a big part of natural colors – novel raw materials and new, better varieties of existing crops are one avenue of R&D. Improved production methods, new cultivation technologies and precision fermentation are another.

Choosing the right partner is critical. Collaborating with experts such as Oterra can make the transition significantly easier, reducing reformulation time and ensuring consistent product quality.

Companies that take proactive steps now will be better positioned to meet new regulatory requirements and appeal to consumers who are increasingly prioritizing naturalness and well-being in their purchasing decisions.

Switching from artificial dyes to natural dyes is no easy feat. To get it right, the move requires complex changes across company operations and supply chains.

The Food and Drug Administration is putting pressure on food companies to voluntarily remove artificial colors from products by the end of next year. Companies are beginning the process of phasing out artificial dyes, but the transition has become more urgent as states begin to implement outright bans on synthetic dyes.

It is not enough to simply replace an artificial dye with a natural one, experts said during The Future of Food & Packaging Innovation, a virtual event hosted by Food Dive and Packaging Dive. Natural dyes react differently in food and beverages, often requiring more of the product to achieve the same effect as a synthetic dye. 

Natural dyes also can force companies to rethink their product formulations and warehousing. While these operational functions can present challenges, they are also an opportunity for companies to modernize and innovate, said Hélène Moeller, director of global product marketing, colors and savory flavors at ADM. 

ADM offers a full spectrum of natural colors, with sources for the dyes often differing depending on the product. When cultivating a natural dye from a raw material, such as a carrot or radish, manufacturers need to know the supply chain and availability of each of these sources, which makes the process complex, Moeller said.

“You need to go deep on each of these different pigments, and then they don’t behave the same way. So some of those will be water soluble,” she said. “Some of them will not. It is a very individualized work, and this is where the collaboration really comes into play.”

For companies interested in starting the transition to natural dyes, Moeller suggested a portfolio review to identify which products to prioritize when making the switch. Businesses should work closely with suppliers to understand their options and the potential challenges involved.

“It’s good to have this conversation early to make sure to find the appropriate solution because every manufacturer will have different parameters,” she said. 

While there are challenges involved with making the switch, technology advancements and new regulatory approvals have simplified the process compared to a decade ago.

“We always tend to think, ‘Oh, this is super hard,’” Moeller said. “But there [are] also areas where it’s not that difficult to replace with a naturally derived solution.”

Can natural dyes play into food's health and wellness boom?

Switching to natural dyes can enhance a product’s health halo especially as more consumers seek clean-label products. But a natural dye doesn’t necessarily mean it is healthier than an artificial one, said Indika Edirisinghe, professor of food science and nutrition at Illinois Institute of Technology. 

When extracting color from a radish or beet, the resulting dye often lacks nutritional benefits. Additionally, because natural dyes need to be used in higher doses than artificial ones, companies need to be extremely careful in ensuring that they don’t surpass toxicity levels. 

A lack of research has created challenges in understanding how these dyes react in the human body. “We need to do our groundwork and due diligence at the initial stage to make sure that we have handled every corner with available advanced technology,” Edirisinghe said.

Using natural dyes offers manufacturers the opportunity to customize not only in the color spectrum but also offer certain benefits that can help reduce the risk of developing chronic diseases, Edirisinghe said. He gave anthocyanin as an example, a pigment that gives red, purple and blue colors and has health benefits, such as antioxidant and anti-inflammatory activity. 

If these things can be structured correctly, natural colors could also allow companies to improve the health profile of their product. “It’s worth exploring those opportunities so you can get maximum benefits,” he said.

Still, the government “has to do a lot of work” to understand this science and set up regulations. This is where the challenges come, Edirisinghe said.

As food manufacturers launch a dizzying array of products addressing consumer demand for health and wellness, few characteristics are as valuable in increasing their chance of success in the market as texture.

The attribute impacts everything from the food’s appearance and mouthfeel to how it tastes and its overall likeability. 

Ingredion has a proprietary dictionary and methodology of measuring texture using 274 terms or attributes, such as spongy, sticky, gooey, firm, chewy, juicy, flaky and creamy. 

“Texture is very complimentary to a lot of the healthy things,” Rob Ritchie, senior vice president for food and industrial ingredients at Ingredion, said in an interview. “We think there’s untapped market there that we’re going to continue to grow upon.”

As companies introduce healthier products, or reformulate existing ones on the market, texture is one of the most important measures to consider, according to the company.

Texture can impact how quickly people eat, how full they feel, how they perceive the food’s nutritional value and their overall satisfaction. Ingredion found more than 50% of consumers would reject a food product if they didn’t like the texture.

A rise in demand for clean-label and healthy foods has companies looking to change or slim down their ingredient lists. But the removal of some ingredients from food, without replacing the textural qualities they provide, can make products less appealing or even inedible, Ingredion noted.

“As you go down that journey of reformulation or new brand launches, we believe texture plays a huge role, almost as much as flavor in that consumer decision,” Ritchie said.

Sauces and savory items, for example, often have high calorie counts. Reducing or eliminating fat in a dressing can result in a less creamy and indulgent product. Ingredion’s portfolio has clean-label texturizers that maintain the desired creaminess and indulgence without the high-fat content.

In baked goods, using resistant starches — those that are not easily broken down by enzymes in the body and minimally absorbed during digestion — can help achieve a healthier offering while still preserving the texture of traditional high-carb items such as bread, bagels, or muffins.

In 2024, Ingredion reorganized its business to sharpen its global focus on texture and healthful solutions. This shift allowed Ingredion to more effectively outline texture options for its customers and highlight the expertise it had built through investments in technology, consumer insights, and sensory data.

In February, Ingredion said it was spending over $100 million to produce more texture-based ingredients while providing additional flexibility to new offerings to its portfolio at a facility in Indianapolis. 

Texture is so powerful that descriptions on a product’s label can drive up to 70% of the consumer’s preference for a product, the company noted. Even a less dense or lighter textured item can be perceived as healthier. 

Citing data from Innova Market Insight, Ingredion noted that 84% of consumers associated light texture with healthier options.

Ingredion CFO Jim Gray said some of the company’s customers reach out to the Illinois-based firm seeking to create a new product or reformulate an existing one. For some companies, this can be especially tricky, particularly if their offerings are vegan, no sugar, plant-based or high in protein.   

“There are ways where you can work within a brand’s composition” to increase texture to meet specific requirements, Gray said.

More food companies are starting to promote a shift away from seed oils as the “Make America Healthy Again” movement positions the controversial ingredients as unhealthy.

In one of the largest scale announcements so far, Real Good Foods, a maker of better-for-you frozen meals, said it would begin to transition its entire portfolio away from seed oils and instead adopt beef tallow. The company launched a new line of seed oil-free breaded chicken and will begin the process of converting the rest of its products.

“The no seed oil movement has become a real undercurrent in the food and health and wellness space and really dominating the conversation online,” Rikki Ingram, chief marketing officer at Real Good Foods, said in an interview with Food Dive. “This has been something that we've been hearing about for a couple of years now, and it was finally time to act.”

While restaurants such as Steak N' Shake and Sweetgreen have received considerable attention for their commitment to phase out seed oils, Real Good Foods is among a burgeoning group of smaller food companies that are following suit.

Seed oils are vegetable oils derived from plants including canola, sunflower or soybean seeds. Commonly found in processed or fried products, these oils have become under tighter scrutiny as consumers and regulators alike begin to crack down on ultra-processed foods.

Health Secretary Robert F. Kennedy Jr. has decried seed oils as “one of the most unhealthy ingredients that we have in foods,” and critics say they can break down during the cooking process into compounds that cause inflammation and weaken the immune system.

Kennedy and others have promoted beef tallow or other oils with higher saturated fat content that remain stable at high heat.

Nutritionists and health experts have largely debunked the idea that seed oils are less healthy, with decades of research showing the unsaturated fats in seed oils are linked to a lower risk of heart disease. Still, that hasn’t stopped companies from jumping on the seed oil-free bandwagon.

Around a dozen brands have received certification from the third-party Seed Oil Free Alliance, a program that allows companies to market their products as seed-oil free. Saffron Road, a frozen meal maker owned by the American Halal Company, said it would eliminate seed oils in core recipes as part of a larger portfolio renovation to add more protein and other ingredients perceived to be healthier by consumers.

Sales of certified seed oil-free products have surged this year, with SPINS data reporting average sales growth of 216% in the first quarter compared to the prior year. Over a 12-week period, these products have seen 410% growth.

Real Good Foods’ decision to move away from seed oils wasn’t connected to the larger MAHA movement, Ingram said, noting that the ingredient change has been a request from consumers for years. Reception to the new products have been “overwhelmingly positive,” she said.

“Our decision is not political. It is personal, and it’s practical, and it’s about responding to consumer feedback,” Ingram said. “We believe that everyone deserves access to delicious, convenient food made with ingredients they feel good about eating.”

Real Good Foods decided to use beef tallow because of its taste and lower price point compared to olive oil, another source of monounsaturated fats that is considered healthier by the medical community. Sweetgreen discontinued its ripple fries, made with olive oil, after receiving mixed reviews and noting the added complexity of making the item.

Scaling use of beef tallow in the U.S. would be a complex endeavor, especially as an ongoing cattle shortage could limit supply of the ingredient. Real Good Foods said the change has had ripple effects throughout its supply chain, impacting the manufacturing process, sourcing strategy and more.

Because of the lengthy production changes involved, the company isn’t providing a timeline for switching its entire portfolio away from seed oils.

“It’s never easy, and it’s also why we’re taking the time and care and diligence required to do this in the right way and in the right time across the portfolio,” Ingram said. “But we really do believe it's worth it for the alignment with what our consumers want.”

Major food companies adopting artificial intelligence programs for product development and quality assurance say the technology platforms are helping them gain an advantage in a competitive and fast-paced industry while also staying two steps ahead of potential market disruptions.

Kellanova and ingredients giant Ingredion are among those companies leveraging the technology in its supply chain to refine recipe formulations and make sure products are up to date in accordance with regulations.

The two companies detailed their use of AI along with artificial intelligence provider Tastewise during a virtual State of Innovation in Food Manufacturing event hosted by Food Dive and sister publication Manufacturing Dive on April 9.

AI throughout the entire supply chain

David Lestage, chief R&D officer at Kellanova, said the snacking giant behind Pringles and Rice Krispies Treats is using the technology to tackle operational, regulatory and consumer challenges. Kellanova in 2024 listed artificial intelligence as one of the five top tech priorities it planned to double down on, along with digital twins and data analytics.

Among other things, Kellanova uses AI to identify which ingredients can be substituted if particular raw materials become unavailable. The platforms the company uses, Lestage said, would be able to identify different grades or variants of rice or corn.

“You’d be able to switch things out much more efficiently and have less downtime, less labor burden as well, and accelerate decisions to make those changes,” Lestage said.

Kellanova and Ingredion also are increasingly using AI to keep up with regulatory compliance, particularly as President Donald Trump’s trade war creates new uncertainties. To identify the latest regulatory developments from across the world related to sectors like packaging and carbon emissions, Kellanova uses a platform called RegAsk. The tech allows the company’s workers not to get too bogged down with trying to untangle every country’s unique regulations, according to Lestage, which allows employees to focus on other tasks.

At Ingredion, Chad Davis, vice president of global supply chain, said the ingredients provider is using AI technology to predict which ingredients would be most affected in the face of a supply chain crisis, like tariffs or unexpected speedbumps, such as a ship getting stuck in the Suez Canal.

Ingredion created a “digital twin” of its supply chain network, Davis said, with its manufacturing and distribution sites, supplies of materials along with their costs and consumer trends data from around the world. The technology allows the company to see how certain events like tariffs would ripple throughout the supply chain, keeping Ingredion prepared if potential challenges come to fruition.

“We have all of that modeled in a global simulation. So as an interruption occurs, like a tariff, we update tables in our simulation, and it gives us the next best solution,” Davis said.

 

Predicting the next big consumer trend

Beyond the supply chain, companies also are relying on AI to keep up with ever-changing consumer trends to tap into the next big flavor or product launch.

Kellanova’s food scientists use Tastewise to expand the company’s creative abilities, like drafting packaging, claims and recommended recipes. It also uses Microsoft’s AI tools in platforms like Edge and Copilot to mine insights for product development, Lestage said.

There are nuances and upsides the Cheez-It maker has found in each platform it has tried. “The tools now that allow you to get consumer feedback… accelerate your product development timeline tremendously, by months,” Lestage said.

AI company Tastewise analyzes billions of data points, such as social media interactions, home recipes and restaurant menus to forecast which trends are bubbling up to the surface in the food industry.

The platform includes a chatbot similar to ChatGPT, which allows users to pose queries to specific questions. This process allows companies to quickly predict what consumers will demand rather than just “static research trends,” Tastewise COO Tal Tochner said.

“Companies that are actually winning are the ones that are able to personalize and really understand their consumers,” Tochner said. “They’re asking super hyper-local insights or audience-tailored questions in order to tailor their marketing strategies and win the shelf.”

Dive Brief:

• PepsiCo is enhancing its protein offerings with refreshed options across three beverage brands as nutritional drinks continue to power sales across the industry.
• The new lines, which will come to market in early 2026, include updates for the Propel, Muscle Milk and Starbucks Coffee brands.
• The food and beverage giant is aiming to stand out in the crowded market by highlighting how the beverages can boost health outcomes rather than solely touting the amount of protein grams per drink.

Dive Insight:

During PepsiCo’s earnings call in October, executives pointed to protein as a growth opportunity for the food and beverage giant. With the new product launches, PepsiCo wants to create protein-enhanced beverages that customers can consume at multiple times throughout the day.

“We're focused on delivering protein in ways that work with the body, not just focused on adding grams,” Ram Krishnan, CEO of PepsiCo Beverages, said in a statement.

Propel Clear Protein is a flavored powder mix that includes added electrolytes and fiber, and the launch is meant to bring the brand deeper into the functional hydration space. The product is targeted at GLP-1 medication users, PepsiCo CEO Ramon Laguarta said on the call, who noted fiber might be the next big trend in functional drinks. 

As consumers look for more health benefits out of their beverages, companies like PepsiCo are seizing the opportunity to innovate with new ingredients. 

“That will have a multiyear innovation opportunity for us as we see consumers looking for more functional solutions in drinks that are not even available right now in the market,” he said.

PepsiCo also plans to reformulate Muscle Milk to make it smoother and shake-like. Laguarta said the company’s goal is to give consumers a drinkable alternative to meals and snacks. 

PepsiCo is positioning Muscle Milk as the only ready-to-drink protein beverage without artificial sweeteners and added colors. To support the change, the CPG giant is modernizing its packaging.

The third beverage PepsiCo is targeting is coffee, through its North America coffee partnership with Starbucks Coffee. The protein-enhanced drink will include added protein, fiber and vitamins and minerals.

The protein innovations are part of PepsiCo’s broader strategy to add better-for-you options to its portfolio. Earlier this year, the CPG giant released versions of some of its popular products without artificial colors and flavors.

“Taste trumps all.” For years, that was the golden rule in the sensory world. The best tasting soda, snack, or dessert always won, in the lab and in the market. But not anymore.

Today’s consumers aren’t asking what product tastes best. Instead, they’re asking which option best aligns with their goals for the version of themselves they are trying to be in that moment. Context matters.

As wellness culture is shaping everyday choices, people are more willing to trade a little indulgence for ingredients that promise energy, immunity, or gut health. A McKinsey survey suggests that over 70% of consumers want to lead healthier lifestyles, and many of them accept flavor trade-offs for health benefits.

This isn't to say taste doesn't matter. It remains a powerful predictor of success. But what “good taste” means is being rewritten.

The future of flavor depends on how well a product delivers on the benefit it promises. A functional lemonade isn’t competing with Sprite, but rather with other beverages offering gut health or energy support.

When companies test a product’s flavor outside of its benefit frame, they’re testing the wrong thing and the wrong product. Consumers don’t expect a probiotic soda to taste like a traditional cola. They expect it to taste credible, clean, and aligned with what it promises.

Health Benefits Are Changing The Rules

In a nationwide study on functional sodas conducted by Curion, consumers revealed how the taste/health tradeoff plays out. In the functional soda category, 62% of buyers chose these beverages because they were a healthier alternative, with 55% citing low sugar, and 54% saying they wanted natural or cleaner ingredients. Shoppers even welcome "less sweet," "herbal," or "earthy" flavors as proof of health benefits, embracing taste trade-offs as part of a "health halo." When nutritional information was visible on packaging, taste preference and purchase intent increased for functional sodas, while traditional sodas dropped.

No one expects a protein bar to beat Crumbl in taste. That’s not the competition. Consumers are solving for protein intake, hunger regulation, and self-alignment with wellness goals. Those are the jobs a consumer needs a protein bar to do for them.

When a product delivers on its intended “job,” that can predict high purchase intent and loyalty. And these jobs have been evolving to represent mood, identity, and nutrition. According to Cargill, distinct consumer types have been popping up: Impulse Munchers reach for classic cookies when they need comfort or relief from stress; Emotional Snackers seek nostalgic flavors for reassurance, but wish for healthier choices; and Guiltless Grazers actively pursue protein bars and functional chocolate because these options align with their wellness goals and let them indulge “without regret.”

Stories from consumers are telling us that snacks are a social currency, with high-protein bars, nutrient-rich foods, and Instagram-worthy packaging used to signal personal health, purpose, and belonging in today’s culture.

Brands are responding by blending nostalgia and innovation, reformulating familiar comfort foods with extra nutrition so consumers feel “cool and intentional,” not deprived. The viral rise of products like the David Bar illustrates how guilt-free, functional snacking satisfies both the craving for enjoyment and the desire to optimize health, with shoppers celebrating their choices on social media as symbols of modern life.

The “New Playbook” Bottom Line

In order to survive in today’s market, brands need to test their product within the right context and the right products. Indulgent flavor isn’t the main driver to consider anymore. The reward alignment is now the leader. Compare functional snacks to functional snacks, not to their indulgent counterparts. And better yet, measure beyond “how much” consumers like a product, but “why.”

Those who cling to the old equation of “taste + low cost” alone will pay more later in lost market share. Listen to your consumers – they are telling you something powerful: “I’ll give up a little taste if you give me a lot of health.”

Brands need to be able to decode these tradeoffs to connect their consumers directly to their products in the moments that matter. The brands that understand this mindset and design testing to capture it will build the next generation of products that win on both fronts.

As cocoa prices soar, chocolate substitutes offer a cheaper and potentially more sustainable solution for the sweets sector. But can consumers be convinced to give up their chocolate addiction?

Chocolate prices have nearly quadrupled in the last two years with cacao-growing regions, especially Côte d'Ivoire and Ghana, subject to extreme heat, drought and other volatile climate challenges. Escalating prices are also impacting profits at major food companies, with the CEO of Oreo and Toblerone owner Mondelēz, saying the company is seeing “unprecedented cocoa cost inflation.”

With prices predicted to remain high, and the potential that global chocolate supply won’t be able to meet ever-increasing demand, there's growing buzz around cocoa-free chocolate alternatives.

Voyage Foods, which makes alternatives to scarce yet beloved commodities, is preparing to scale its cocoa substitutes as higher prices push more companies to rethink their reliance on the ingredient. The company is opening an Ohio manufacturing plant for its cocoa-free chocolate, and recently teamed up with food giant Cargill to expand its reach within the CPG and foodservice industries.

Currently, chocolate makes up the largest segment of the $54 billion confectionery industry, accounting for $21.4 billion in sales last year; but volume and unit sales have fallen in recent years. Unit sales for chocolate declined by close to 5% in 2024, far more than sectors including candy or gum and mints.

“One of the reasons that companies are looking at these solutions through us is definitely cost, and cost volatility,” said food scientist Adam Maxwell, founder and CEO of Voyage Foods.

Chocolate substitutes aren’t new; carob, for instance, has been a niche option for decades. Substitutes like sunflower seeds and even fava beans are gaining traction, too, for the health-conscious. But the latest wave of alternatives surpasses imitation; now, companies are focused on recreating the taste and texture for the mainstream.

Voyage says its cocoa alternatives are made with clean-label ingredients including vegetable oil, cane sugar, grape seeds and sunflower protein flour. Because chocolate is in so many products today, Voyage has a range of cocoa-free flavors, styles, and applications including cocoa-free chips, melting wafers, and chocolate coating that can be used in a variety of applications.

Ingredient suppliers have looked to offer more alternatives to cocoa as price volatility persists. Ardent Mills, a joint venture between Cargill, Conagra and CHS, last month released a wheat-based solution for the industrial baking sector that can replace up to 25% of cocoa powder in cakes, brownies and cookies.

“Cocoa-free chocolate alternatives offer a promising path forward – especially in a supply-constrained cocoa market,” said Mia Divecha, senior product line specialist at Cargill. “In some cases, they can be up to 50% cheaper than traditional chocolate and are not subject to the volatility.”

Chocolate alternatives also provide a sustainable path forward as supply constraints are set to persist or even worsen. Americans eat 2.8 billion pounds of chocolate each year, or over 11 pounds per person, while it can take an entire year for a cocoa tree to produce the cocoa in just half a pound of chocolate. According to World Wildlife, older trees also yield less cocoa, and most of the world’s cocoa plantations are well past their peak production years, exacerbating supply issues.

Research from Innova Market Insights has found three in four consumers are ready to purchase more sustainable chocolate, but are unsure of their options. Cargill’s own proprietary research, Divecha said, echoes this sentiment, adding that cocoa-free alternatives also have other measurable benefits, including a lower water footprint, lower land-use impacts and a reduced carbon footprint as they become more popular.

“Today’s consumers are increasingly mindful of sustainability – even when it comes to indulgent treats,” Divecha said, adding that, while the desire to enjoy chocolate remains strong, consumers are increasingly seeking options that “align with their personal values."

Taste, however, remains one of the biggest barriers to growing the alternative chocolate market. The bar for consumer acceptance is high, and companies have struggled to perfectly recreate a sweet with a more than 4,000 year old history.

“This stuff really has to taste good, because chocolate is an indulgent treat…. It's for those moments of joy in life,” Maxwell said. He acknowledged the taste of Voyage's offerings are not a “perfect facsimile” for any particular existing cocoa product, and that they involve a learning curve for consumers.

“People love certainty in food,” Maxwell said. “But, we do see it moving in the direction of people being more and more okay with it.”