I don't think Froot Loops ever used red 3. They use red 40.
My understanding is that a lot of food is colored to look "natural" for uniformity. A good example of this is applesauce.
https://www.fda.gov/regulatory-information/search-fda-guidan...
"Concentrated carrot juice (for colour), Anthocyanin, Annatto, Turmeric, Natural flavour, Concentrated watermelon juice (for colour), Concentrated blueberry juice (for colour), Concentrated huito juice (for colour)" etc
From their ingredients.