Fermentation-Based Natural Food Colors Gain Momentum as Phytolon Secures $23.6 Million Financing Round

The market transition toward natural color systems continues to accelerate across food, beverage, and dietary supplement categories, with manufacturers increasingly seeking alternatives to synthetic dyes that can satisfy evolving regulatory expectations and consumer demand for clean-label products.

Against that backdrop, biotechnology company Phytolon has closed a $23.6 million Series B financing round intended to support commercialization of its fermentation-derived natural food colors in the United States.¹

The financing follows recent FDA approval activity involving the company’s Beetroot Red ingredient, a fermentation-based color produced using baker’s yeast. Although the final effective date remains subject to agency procedures, the approval represents another example of how precision fermentation technologies are becoming more visible within the natural ingredient sector.¹

“This new funding will be allocated to support sales and supply to CPGs and to distribution partners in the US and beyond,” said Halim Jubran, Phytolon’s co-founder and CEO. “I am excited to see our portfolio of strategic investors increase, enabling us to grow our business and establish our footprint in the market.”

Why Are Fermentation-Derived Natural Colors Receiving Industry Attention?

Natural color demand has expanded significantly in recent years as manufacturers face mounting pressure to reduce reliance on synthetic dyes while maintaining product stability, scalability, and visual consistency.

For finished product manufacturers, one of the central challenges surrounding natural colors involves balancing clean-label expectations with technical performance requirements such as heat stability, shelf life, pH tolerance, and supply chain reliability. Traditional plant-derived color systems can present formulation difficulties due to agricultural variability, cost fluctuations, and processing limitations.²

Fermentation-based production methods are increasingly being explored as a possible solution to some of those issues. Precision fermentation technologies use microorganisms such as yeast to produce specific pigments or compounds under controlled manufacturing conditions, potentially allowing for more standardized production and supply consistency.²

Phytolon stated that its Beetroot Red ingredient is produced through baker’s yeast fermentation and positioned as a cost-efficient alternative designed to meet modern clean-label expectations. The company’s broader pigment portfolio reportedly spans yellow, orange, red, pink, and purple shades derived from two primary pigment platforms.¹

How Could Regulatory Trends Affect Natural Color Adoption in Supplements and Foods?

For nutraceutical manufacturers, color selection remains both a branding and formulation consideration, particularly within gummies, powders, beverages, and chewable dosage forms. Natural colors are often associated with clean-label positioning and transparency initiatives that resonate with health-conscious consumers.³

At the same time, fermentation-derived ingredients may still face commercialization hurdles involving cost competitiveness, regulatory harmonization, and consumer education. Regulatory pathways for novel food ingredients and fermentation-derived compounds can vary across regions, potentially complicating global expansion strategies.²

“Phytolon is at the nexus of two mega-trends—consumer and regulatory demand to remove artificial dyes and advances in fermentation to offer natural ingredients with better functionality, cost, and sustainability,” noted James Cali, general partner at NextGen Nutrition Investment Partners. “With a strong network of strategic partners and recent FDA approval, Phytolon is well positioned to capitalize on the transition toward natural dyes across food and supplements products.”

What Are the Remaining Challenges for Precision Fermentation Color Technologies?

While investment activity in precision fermentation continues to grow, large-scale commercialization remains a developing area across the food ingredient sector. Analysts continue to monitor production scalability, manufacturing economics, labeling considerations, and long-term consumer acceptance of fermentation-enabled ingredients.²

Additionally, although regulatory approval milestones may help accelerate adoption, broader market penetration will likely depend on whether these technologies can consistently deliver functionality and pricing competitive with both synthetic dyes and conventional botanical color sources.

References

1. Phytolon closes $23.6 million Series B to commercialize its innovative natural food colors. PR Newswire. May 26, 2026. Accessed May 26, 2026. https://www.prnewswire.com/news-releases/phytolon-closes-23-6-million-series-b-to-commercialize-its-innovative-natural-food-colors-302781241.html

2. Augustin MA, Hartley CJ, Maloney G, Tyndall S. Innovation in precision fermentation for food ingredients. Crit Rev Food Sci Nutr. 2024;64(18):6218-6238. doi:10.1080/10408398.2023.2166014

3. Grand View Research. Natural food colors market size and trends report. May 26, 2026. Accessed May 26, 2026. https://www.grandviewresearch.com/industry-analysis/natural-food-colors-market.