Why Has Whey Protein Become So Expensive?

If you’ve noticed the price of whey protein increasing significantly, unfortunately it’s not just a New Zealand issue.

The price of whey protein has risen sharply around the world, with global demand currently exceeding available supply.

Worldwide demand for protein has exploded

Protein is no longer just something used by gym-goers and bodybuilders.

High-protein products have become one of the biggest trends in the global food and beverage industry. Whey protein is now being used across:

• Protein powders and sports nutrition

• Ready-to-drink protein shakes

• Clear protein drinks and protein waters

• Protein bars and snacks

• High-protein yoghurts and desserts

• Healthy-ageing and medical nutrition

• Weight-management products

This means supplement companies are now competing with some of the world's largest food, beverage and nutrition companies for the same whey protein.

The growth has been so strong that worldwide production capacity has struggled to keep up.

There simply isn't enough supply

Whey Protein Concentrate (WPC) and Whey Protein Isolate (WPI) require specialised processing equipment, filtration and drying capacity.

That capacity can't simply be increased when demand suddenly rises.

Major dairy manufacturers around the world are now investing heavily in expanding whey protein production, but new facilities can take several years to become operational.

Until that extra capacity comes online, competition for available whey remains extremely strong — particularly for high-grade WPC and WPI.

Why does this affect New Zealand protein?

This is probably the most important point.

Even though we purchase New Zealand whey from New Zealand suppliers we pay based on the US Dollar, and the value of that whey is influenced by the global market.

New Zealand dairy proteins are exported all over the world.

Our suppliers aren't setting a completely separate price for New Zealand customers. They are selling into an international market where buyers from Asia, North America, Europe and elsewhere are competing for the same product.

So if international customers are prepared to pay significantly more for New Zealand whey protein, the value of that whey increases here as well.

Being located in one of the world's largest dairy-producing countries unfortunately doesn't insulate us from global whey prices.

Why has WPI been hit particularly hard?

Whey Protein Isolate requires additional filtration and processing compared with standard whey concentrate, and there is less production capacity available.

At the same time, demand for WPI has increased substantially due to growth in premium protein powders, clear whey products, RTD drinks and specialised nutrition.

The result is simple: more companies are competing for a limited amount of whey protein.

And when global demand grows faster than supply, prices rise.

What does this mean for us?

Whey protein is by far the largest cost involved in producing our protein powders.

We have absorbed as much of these increases as reasonably possible, but with the cost of whey rising so significantly, increases have to be reflected in our retail pricing.

Our priority remains the same: continue using quality protein ingredients, maintain the protein content and quality of our products, and keep our pricing as competitive as possible.

We appreciate our customers' understanding while the global protein market works through what has become an unprecedented period of demand.