The US firm said the deal to buy Indiana-based Artemis' colours activities is in direct response to growing demand from customers for natural food colours.
"Our customers have been interested for some time in having us expand our natural colour offerings and expertise," said Edie Nixon, president of D.D. Williamson Colors.
The nutraceutical ingredients, also offered by Artemis, are not affected by the deal.
Today's functional food trend is encouraging food and beverage manufacturers to use natural colours. This demand is fuelling growth in the colouring foodstuffs market and outstripping the base line growth in the European colours market in general, valued at €195 million in 2001.
The European colouring market is expected to experience a compound annual growth rate of only 1 per cent for the period 2001-2008.
"In contrast, the colouring foodstuffs market is currently experiencing growth of an estimated 10 per cent to 15 per cent, driven by consumer interest in natural products," says Frost and Sullivan analyst Lyndsey Greig.
In addition to the influence of the functional food trend, the shift from synthetic colours to natural equivalents is underpinned by consumer suspicions that all E-numbers are unhealthy.
"Colouring foodstuffs include fruit and vegetable juices, concentrates and dried, powdered extracts. They do not contain any carriers or additives, and may be listed as ingredients, rather than as food additives," adds Greig.
There are three main classes of colour in foods: natural colours, browning colours, which are produced during cooking and processing, and additives.