LONDON — Global dairy companies and food producers are investing heavily to meet soaring demand for protein-rich whey, driven by a surge in the use of weight-loss drugs and healthier eating trends.
Danone Oikos Pro, protein-packed yogurt, is for sale May 4 in a cooler at a grocery store in Port Washington, New York.
Whey, a byproduct of cheesemaking traditionally used as pig feed, is an essential component of the food products that target consumers looking to prevent muscle loss.
Data from StoneX consultancy shows the price of whey protein concentrate with 80% protein content rose by almost 90% in the last year to $23,410 a metric ton, far exceeding increases in other dairy segments, including powdered milk and cheese.
While improved health awareness and aging populations also boosted whey prices, the GLP-1 trend is the key factor behind demand, interviews with a dozen companies and people working in the dairy and food sector showed.
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"The ongoing strong demand for whey proteins, being fueled even further by (GLP-1) in recent years, is what the industry needs to figure out," said Luis Cubel, managing director of Arla Foods Ingredients. "Are there any more untapped volumes you can tap into?"
Dairy companies including Lurpak butter maker Arla Foods and Dutch producer FrieslandCampina expanded whey production capacity, while food firms widened their protein-rich offerings, such as Danone's Oikos yogurt brand and Bel Group's Babybel Protein.
Deloitte warned that GLP-1 weight loss and diabetes drugs are boosting pharma R&D returns while creating concentration and bubble risk across the sector.
Weight-loss drugs drive protein appetite
Kristen Coady, chief innovation and brand officer at Dairy Farmers of America, said weight loss drug users seek out protein, which helps drive new industry innovations.
DFA, the largest U.S. dairy farm cooperative, last month launched MULU, a cottage cheese with added whey and 18 grams of complete protein per half-cup serving — well above the typical 12 to 13 grams for a regular product.
"What we've been seeing is almost a run on dairy proteins," Coady said.
The popularity of cottage cheese led DFA to increase investments in its cultured capabilities, switching production sites in Pennsylvania and New Mexico from fluid milk, Coady said.
Health and wellness retailer iHerb saw huge growth in its GLP-1-adjacent products, primarily in the U.S.
"Customers are starting to really look for ways to fight the downside or the side effects of GLP-1," iHerb Chief Revenue Officer Hyeyoung Moon said.
She noted an uptick of searches using "GLP-1" and more female customers looking for supplements to help when losing muscle, not just the stereotypical gym-going muscle builders that whey proteins traditionally attracted.
A cheesemaker stirs whey Feb. 15 inside Beecher's Handmade Cheese at Pike Place Market in Seattle, Washington.
High-end whey race
John Lancaster, head of EMEA dairy and food consulting at StoneX, said the food industry lacks the infrastructure to keep up with demand for high-protein whey concentrates and isolates.
"There's a shortage of the capacity to turn (whey) into what is required by the market at the moment," he said.
Guus Aerts, FrieslandCampina global director for marketing and product strategy, said the protein boom encouraged the Dutch Lady and Yazoo maker to invest heavily in high-end whey processing.
The company finalized its purchase of Wisconsin Whey Protein, a U.S.-based producer of whey protein isolates, in January and doubled capacity at its Dutch Borculo plant.
For dairy companies, improving whey quality is crucial as food producers develop more high-protein versions of yogurt, cottage cheese, drinks and salty snacks.
FrieslandCampina said Tuesday it will invest more than $105 million to accelerate its growth in high-value whey proteins.
Marion Bucas, marketing director at Lactalis Ingredients, part of the world's largest dairy company, said protein represents a huge opportunity.
"Dairy proteins are still the best quality proteins on the market, but there will be lots of work to try to find substitutes to answer the demand," Bucas said.
Seeking alternative protein-rich ingredients
Demand for protein-rich peas and lentils gave struggling U.S. farmers a crucial new revenue stream. Meanwhile, biotechnology companies that produce alternative proteins, using a method called precision fermentation, attracted investment.
French startup Verley, which ferments fungi to produce the protein that targets muscle recovery, said the effects of GLP-1s on the typically slow-moving food sector are "insane."
"In the U.S., in just two to three years, everything changed," Verley co-founder and CEO Stephane Mac Millan said, adding: "And that puts the whole food industry under pressure to reformulate (products)."
Standing Ovation, another French startup, which raised investments from Danone and Bel Group, makes casein proteins and expects to begin selling its products this year.
Co-founder Romain Chayot said 80% of the products it is developing are for high-protein solutions. "With GLP-1, developing high-protein yogurt or cheese or beverage is booming today," he said.
Though analysts say precision fermentation is too expensive to gain critical mass for now, high whey prices create opportunities.
One issue for skeptical consumers is taste.
"Dairy protein is delicious," Bel Group's North America CEO Peter McGuinness said, adding: "In this protein race, we've lost deliciousness."
