HUDSON – Buyers racing to grab protein products off shelves is causing companies to rev up their engines and their prices.
Due to the recent demand for protein stemming from the American population’s rising desire to be healthier, whey protein has become one of the most in-demand ingredients on the market.
Whey protein is a high-quality, complete dairy protein that contains all nine essential amino acids and is derived as a by-product of cheese-making.
Protein has newly become a breakout ingredient, with 70% of Americans saying they want more protein in their diet compared to 59% 4 years ago.
The demand has led to immense shortages, even with some companies having run out of supply for the remainder of the year.
With sales slowly decreasing, companies have resorted to adding protein to their products as a way to rekindle growth and interest, as well as commanding price premiums.
Because of this, whey powder prices have increased 50% since January.
Prices are higher for powders with a higher concentration of protein. Whey protein falls in the 80% content range, meaning spot prices have topped $11, which is considered a historic high for the specific ingredient.
One solution may be for companies to reformulate using cheaper alternatives such as soy and pea protein.
The tight supply as of late is additionally affecting the prices of non-fat dry milk, another ingredient that is used in the protein fortification process.
Similarly, as dairy producers have shifted to grow the supply of whey protein, production of another byproduct called butterfat has been increasing, leading to an optimistic decline in costs.
Although the U.S. dairy producers have announced an 11 billion dollar contribution to the expansion of new facilities for protein production in 19 different states, companies have been struggling with the decision to raise prices when consumers are already overwhelmed by inflation.
Having said this all, the International Dairy Foods Association sees milk production growing by 15 billion pounds by 2030 to meet the rising demand for whey protein.
