The price of whey protein, particularly whey protein isolate, has skyrocketed over the last few months. I talked to industry expert Paul Knox, and we discussed the market conditions of whey protein powders.
Transcript:
Hey, what’s up guys? This is Alex Rogers from Protein Factory, and the price of whey protein has been going absolutely crazy lately. I figured I’d call an expert. I called up my friend Paul Knox. He’s a whey protein expert, dairy protein expert. Been in the business for decades. And hey, Paul, what’s going on?
Hey, Alex. Great to hear from you, man.
Awesome, awesome.
Yeah. Like you said, it’s been a crazy year for proteins. Just another one of those times. It wasn’t long ago that we saw prices way down, but now they’re back up.
Yeah. What’s this? The last time I saw prices, is this the highest whey protein, isolate and concentrate has ever been?
No. In ’22 we saw it pushing to $10 a pound for isolate, and consumers, manufacturers pushed back and because of that, producers had to stop producing WPI. They were just producing for contract needs, but the price was through the roof. And that was due to a surge on China’s part. They were buying everything they could in ’22. It’s been a nutty ride, but right now, demands are so great. It wasn’t long ago that we had to look at China, what they were going to do to determine where the markets were going to go. Well, China’s just one of the players in the market now that we have to watch because demand for dairy proteins is just through the roof.
Yeah. That’s an interesting topic right there. China, does China make whey protein? And if not, why not?
Actually they do. They make quite a bit of whey protein, but they have a population of 1.4 billion, and the growth in demand for protein is very high in China. They can’t make enough to feed the population needs. China is home to 20% of the world population, but they only have 7% of the fresh water. They’re very limited as to what they can do dairy wise. Still, it’s still an exorbitant amount of protein that they can produce, but it’s still not nearly enough to do what-
I mean, I’ve never been to China, but in the country of China, do they sell two pound, five pound units of whey protein like we do in the US?
You know what? That’s a good question. I mean, they do sell the jugs of protein because they’ll buy brand name proteins. And then as far as what the regular consumer, because you have to understand there’s been a shift in the whey protein demand. Currently, I’ll just use United States. Currently better than 60% of Americans are demanding more protein in their foods. And it’s not just supplements anymore. It’s foods like the confections, like baked goods, like beverages, like snack foods. People are demanding more protein in these foods, and that’s what’s happening on a world scale. Consumers around the world are getting to understand the benefits of protein and the need for protein to build strong bodies, to live longer lives. It’s crazy how quickly this trend has picked up, and I say quickly, it’s been coming for many, many years, but all of a sudden it just seems to be hitting recently.
And so it’s putting a lot of pressure on the dairy market, but the dairy producers are responding to all of this. I mean, we’ve got four new plants coming online this year alone, well end of this year, beginning of ’25, so Q1 ’25, and then Q4 of ’24. We have four new plants, plus you’ve got existing plants that have recently renovated and brought in better equipment to be a lot more efficient in their production. We’re going to see an increase in the production side of things. Will it keep up with the demands? Hopefully it helps a lot. We’re expecting to see a little bit of a softening going into ’25, but it’s yet to be determined how much of a softening we’ll see.
Yeah, that was going to be my next question is where do you see the price of whey protein concentrate and whey protein isolate heading? Is the price going to go up, is it going to go down, what do you think?
Right now I’m seeing such a mix of pricing. I’m seeing on WPI, I’m being quoted very high, and that’s for truckload quantities. For less than truckload, it is very expensive, but that’s where in ’22, everybody was pushing back. It’s not feasible. But on the 80 side, I’m still seeing instant 80 in the mid to upper range. I was just quoted not too long ago for truckload quantities, instant soy 80, so that’s not even sunflower, but sunflower usually gets five to 10 cents more.
Gotcha.
But it’s been pretty stable there for quite some time. It’s 90 that’s so difficult to find.
Gotcha. And then what countries produce the most whey protein isolate?
The United States, and you have Europe and you have Oceania. Oceania is New Zealand, Australia. New Zealand is home to about 5.3 million cows. We have 9.3 million cows, but New Zealand exports about 95-
Those are dairy cows you’re talking about, cows that produce milk.
Dairy cows. I’m sorry. Yes, exactly. Yeah, I talk dairy.
Yeah, yeah.
Yeah, if you add in the beef, it’s a lot more.
Yeah.
But New Zealand exports 95% of their production. We only export 16 to 17% of our production, but actually on the whey protein side, WPC, we do tend to export a little better than 30% of our WPCs. But New Zealand by far sells the most. Europe is in there as well, and Europe consists of many different countries. Germany being the largest for export, but they export quite a bit of product as well.
Germany’s big time. Yeah. What about, we were talking about plant proteins before. I don’t know if you wanted to mention that or anything like that, or you want to talk about that?
Yeah. This demand for protein isn’t just for animal-based. It has a great deal to do with just protein itself, and the demand for the plant-based is a lot greater than that for animal-based. The compound average growth rate for animal-based protein is running at about 4% worldwide. The plant-based CAGR is at about 12.8%. While the animal protein sector is much larger than the plant-based, plant-based is running fast to try and catch up. And I don’t know that they ever will, but you look at countries like India and Brazil, and these countries have always primarily been plant-based. The animal-based protein is relatively new, but you look at Brazil, their CAGR for whey protein is about 8%, and India is about 6.8%. Those are the two countries growing fastest. But on the other hand, the plant-based sector in those countries is much greater. This need for protein is enormous these days.
Interesting. Cool. Yeah, that’s about it. My main concern is the price of protein. WPI is pretty much going to stay the same, won’t go over 10 bucks a pound. That’s what you think?
It will not, no. And people are struggling to buy at nine. These prices, the manufacturers, the supplement manufacturers, even the food manufacturers, they don’t want to pay those prices.
Yeah.
Consumers don’t want to be with another increase on the food side. There’s going to be pushback on that.
Just curious, how come WPI, the price is moving up, but WPC stays the same. Why is that?
Right now, it’s literally because there’s just not enough WPI. In ’22, like I said, China was buying everything and there was no supply, so prices went way up and then the manufacturers pushed back. In ’23, the prices came way down, but there wasn’t enough WPI to supply the new demand for WPI. It was a rush to get production, and with demand being so great, producers couldn’t keep up, and so they were just making as fast as they could.
Gotcha. Everybody knows groceries went up, everybody knows inflation, whatever. How closely is inflation related to the prices of whey protein?
Inflation hits everything in some way. When we have these well high inflation rates and the inflation and the credit rates are way up, people just don’t spend like they used to. There’s been a cutback on going out to dinner, and it’s because it became so expensive. People started eating at home more, and they are buying more protein at home. It’s more affordable that way. In one way, it helps the industry because people are staying home, but on the other hand, they’re also having to pay higher prices. Yeah, it definitely has an effect.
Cool. All right. That’s all I got, man. You want to add anything or plug anything?
No. Hey, I appreciate you calling me and getting me on your podcast. Anytime you want to talk, feel free to give me a shout. I’m always here.
Cool. Awesome, Paul. Thank you.
Thanks, Alex. Take care.
Bye.
Alex Rogers is a supplement manufacturing expert. He has been formulating, consulting, & manufacturing dietary supplements since 1998. Alex invented protein customization in 1998 & was the first company to allow consumers to create their own protein blends. He helped create the first supplement to contain natural follistatin, invented whey protein with egg lecithin, & recently imported the world’s first 100% hydrolyzed whey.
