Derived from milk, whey protein is the most popular and widely used protein supplement on the market in and outside of sports nutrition, providing a complete protein source that contains all nine essential amino acids.
Its recent surge in popularity has pushed prices to record levels, with data from commodity intelligence platform Vesper Tool revealing that WPC80 (whey protein concentrate containing at least 80% protein by weight) now costs $32,000 per metric tonne ($14.50/lb), up from $5,500 per tonne ($2.49/lb) during the same period in 2023.
Jasper Endlich, dairy analyst at Vesper Tool, said price increases have primarily been driven by a sharp rise in global consumption, especially in the United States.
“An expanding customer base buying a wider variety of products containing whey protein has really helped push demand higher,” he said. “On top of that, demand from customers using GLP-1 medications has further compounded the issue. Because these patients are prescribed higher protein intake to prevent muscle mass loss, it’s lifting the total demand for whey proteins to new highs.
“The market is responding, as these high prices are pushing dairy cooperatives to invest in new production capacity and forcing buyers to blend different protein types. While this will eventually help push prices back down, it is not currently enough to cool the market.”
The supply and demand gap
Because whey protein is a natural by-product of the cheese-making process, its supply is closely linked to cheese manufacturing volumes. But while the cheese market is growing at a CAGR of around 4% to 5%, demand for whey is growing at a much faster rate.
Increasing whey supply is therefore not as simple as scaling production of an individual commodity, as the economic value must be balanced across multiple product categories.
In addition, whey protein manufacturing requires specialized equipment such as membrane filtration and spray-drying infrastructure. Although plans to ramp up production are underway, building new lines and expanding production facilities can take years.
This is creating a disparity between demand and supply, with a notable surge in price occurring over the past 12-to-18 months, according to Mike O’Leary, head of product at Elite Sports Nutrition (ESN).
“What makes the current situation unique is that demand is now coming from multiple directions simultaneously,” he said. “Protein has evolved from a sports nutrition ingredient into a mainstream nutritional component.
“Beyond sports nutrition, we are seeing strong growth in active nutrition, healthy aging, weight management, functional foods and protein-fortified everyday products. Large food and beverage manufacturers are increasingly incorporating protein into their portfolios, adding further pressure to an already tight market.”
Cost pressures felt particularly strongly in Europe
Protein is increasingly being incorporated into mainstream food and drink, including cereal, crackers and bread, with recent launches from major outlets including Starbucks’ protein cold foam and Dunkin’ Donuts’ protein milk for coffee and refreshers.
O’Leary also noted an increased focus on protein intake among GLP-1 users—an ever-growing population that has reached around one in eight in the United States.
The resulting price increase, however, has been felt particularly strongly in the European market, where prices fluctuate more frequently, O’Leary noted.
“Across the industry, rising raw material costs have become one of the defining challenges of the current market environment,” he said. “In Europe, whey protein prices are typically negotiated on a quarterly basis rather than through annual contracts. As a result, changes in supply and demand dynamics tend to be reflected relatively quickly in market pricing.”
A number of whey-focused brands have reported slow growth as a result. For example, in 2024, THG—which owns MyProtein—reported a loss of £147.9 million ($195.8 million), driven by factors including high material costs, inflation, high investment and acquisitions.
Matthew Moulding, CEO of THG, said the company was grappling with an “unprecedented commodity cost environment”, leading the company’s nutrition arm to further diversify its product offering beyond whey protein, to vitamins and minerals, snacks, chilled and frozen food, and active wear.
During a conference call following the company’s annual financial results, Damian Sanders, THG’s chief financial officer, told analysts and investors that the company was also experimenting with protein innovation.
“We are proactively managing our product mix,” he said. “We have successfully driven category diversification with strong growth across non-whey categories such as creatine, active wear and hydration. Protein innovation is also well underway as we leverage a wider range of sources to deliver high-quality, trend-led products while building a more resilient product portfolio to navigate market fluctuations.”
ESN has implemented similar measures, reviewing sourcing strategies, operational efficiencies and portfolio planning, while protecting product quality to ensure consumer confidence.
Are high prices here to stay?
While the whey protein market is notorious for its volatility, Nick Morgan, managing director of Nutrition Integrated, predicts that heightened demand is likely to continue, suggesting that high prices probably are, too.
“The increase in demand is not going anywhere—we’re not going to suddenly demonize protein,” he said. “There is an assumption that prices may drop a little bit, but they will not go anywhere close to where they’ve been previously. So, to some extent, the industry needs to reset itself so there is a new benchmark, or a new north, for the prices they can expect for WPC [whey protein concentrate] and WPI [whey protein isolate].”
As a result, Morgan predicts that many smaller protein brands will struggle to weather the whey protein storm, with some needing to remodel their business plans to remain commercially viable.
“Sadly, I think there will be a lot of change and fall out,” he said. “Firstly, many small-to-medium sized brands will struggle to survive, particularly those where whey protein is the majority driver of their business. Beyond that, almost all brands are looking to pull on several levers to better improve their margin mix and evolve their business model to mitigate the risk of whey protein volatility.”
Morgan said brands have several options. They may choose to focus on diversifying their product offering, lessening the impact of high whey protein prices by selling more of other products. Creatine, is one example of a product which is currently performing well.
Brands could also increase the price of their whey protein products, or play with ‘pack type architecture’, i.e. changing pack sizes and serving sizes. New product development and reformulation present another opportunity i.e. experimenting with other protein sources, such as plant and casein.
However, this is a riskier route, given the costs involved and the possibility that consumers—who often have clear expectations of products and brands—may be reluctant to accept new formulations.
ESN, for example, has opted not to change product specifications or replace premium protein sources with lower-quality alternatives, as according to O’Leary, the company believes protecting product quality and consumer confidence is more important than pursuing short-term solutions.
“The current environment is demonstrating the importance of resilient supply chains, strong brands and long-term partnerships,” he said. “Companies that have built consumer trust and operational capabilities over many years are generally better positioned to navigate periods of market volatility.”
