Synthetic food colourants are widely used in the food industry, but consumer concerns about safety and sustainability are driving a need for natural food-colour alternatives. Betanin, which is extracted from red beetroots, is a commonly used natural red food colour. However, the betanin content of beetroot is very low (~0.2% wet weight), which means that the extraction of betanin is incredibly wasteful in terms of land use, processing costs and vegetable waste. Here we developed a sustainability-driven biotechnological process for producing red beet betalains, namely, betanin and its isomer isobetanin, by engineering the oleaginous yeast Yarrowia lipolytica. Metabolic engineering and fermentation optimization enabled production of 1,271 ± 141 mg l−1 betanin and 55 ± 7 mg l−1 isobetanin in 51 h using glucose as carbon source in controlled fed-batch fermentations. According to a life cycle assessment, at industrial scale (550 t yr−1), our fermentation process would require significantly less land, energy and resources compared with the traditional extraction of betanin from beetroot crops. Finally, we apply techno-economic assessment to show that betanin production by fermentation could be economically feasible in the existing market conditions.