The color was declared as "artificial color"
Updated
On this page8
How it happens
Somebody reads a competitor label, sees "Artificial Color", and copies it. The paragraph permitting that phrase applies only to color additives not subject to certification and not otherwise required to be named.
What should have been written
The name listed in part 74 or part 82, with the FD&C prefix and the "No." optional and the word "Lake" mandatory where applicable. So "Blue 1" or "Blue 1 Lake" rather than a generic phrase.
The lake half is the commonest omission
Lakes are widely used in dry and fat-based decor because they do not bleed the way dyes do. Dropping "Lake" from the declaration is easy, and it is the specific word the rule bothered to give an example for.
It is a reprint, not a sticker
The declaration lives in the statement of ingredients, so correcting it means new labels. That is the cost of copying rather than checking, and it is entirely avoidable at the specification stage.
Mixed products are the hard case
A sprinkle blend can contain several colors from different parts, which means some must be named and others may use the shorthand in the same list. That is correct and it looks inconsistent, which invites "tidying".
Naming is often better marketing anyway
Buyers of decor products increasingly read color declarations, and a named list reads as more open than a generic phrase. Where the rule permits either, naming costs a little space and buys trust.
Ask the supplier which part lists it
Part 73, 74 or 82 is the question, and the answer decides the wording. It is one line in a specification and it settles the declaration for every label that ingredient appears on.