Investment Rating - The report maintains an "A" rating for the natural colorant industry, indicating it is expected to outperform the market significantly [3][10]. Core Insights - The FDA's plan to phase out petroleum-based synthetic colorants in the U.S. is anticipated to lead to a surge in demand for natural colorants, benefiting domestic companies in this sector [3][5]. - The transition from synthetic to natural colorants is seen as a major opportunity for companies like Sensient Technologies, with over half of U.S. states already taking legislative action against synthetic colorants [5][6]. - The report highlights that the usage of natural colorants will increase by 4-12 times compared to synthetic colorants due to lower color concentration, leading to a significant rise in demand [6]. Summary by Sections Market Overview - The FDA and HHS announced measures to eliminate synthetic colorants by the end of 2026, establishing national standards and encouraging voluntary transitions to natural alternatives [3][5]. Industry Trends - The report notes that the penetration rate of natural colorants is over 80% in Europe, around 30% in the U.S., and approximately 25-30% in Latin America, indicating substantial room for growth in the U.S. and China [5][6]. Investment Recommendations - The report suggests focusing on companies like Chenguang Biotech, which leads in the plant extraction industry and has a strong portfolio of natural colorants [6].