Can't Drag Formula In Sheet With Data Validation

Hi, My name is Tom and I'm new here. I've been benefiting from the content of this forum for a long time, but this is the first time I couldn't find an answer by simply searching.

I’ve created a template for our vendors to fill out with their product information and added a bunch of data validation. In some cases though we may need to correct some data. An example would be running a formula to capitalize the color of a line item. When I try to insert such a formula in the attached sheet, it won’t update the formula when I drag it down with the appropriate field. It just copies the value of the original cell.

Any idea how I can fix this? Any help is greatly appreciated!