Lessons from the dairy industry

The demand for protein suddenly exploded. People sought protein in soft drinks, powders, and bread. Weight-loss drugs created an entirely new category of consumers who needed protein supplements to maintain muscle mass. That was the starting point of the shift.

The price of isolated whey protein has increased fivefold to €28,000 per ton since 2023, more than four times the price of cheese and butter. This price surge, described by industry insiders as "gravityless," has exceeded all expectations. Analyst Jose Saiz at Expana stated: "Previously, it was a worthless product. Now cheese can become a byproduct of whey production." Think about it. For the past thirty years, cheese has been the main product, while whey has been discarded. Now the economic logic has been completely reversed. Whey protein production is reshaping the economic operation of the dairy industry.

But here's the problem: manufacturers can't keep up with demand. Leading European dairy companies like Arla and FrieslandCampina have invested heavily in whey protein upscaling technology. Currently, manufacturers are out of stock of whey protein isolate until June or July 2026.

The shortage isn't just in Europe. The U.S. – once a major exporter of whey protein – is now unable to export. U.S. production is almost entirely consumed domestically due to booming demand from people using weight-loss supplements. The global supply base has shrunk.

Rising whey protein prices are good for manufacturers. But excessively high prices are a problem. Luis Cubel, head of ingredients at Danish dairy company Arla, warns that persistently high prices will lead food manufacturers to seek cheaper alternatives. Plant-based proteins are less popular, but much cheaper. When whey protein prices become too high, food manufacturers will switch to plant-based protein alternatives.

The bigger problem is: to produce whey protein, you need cheese, since whey protein is just a byproduct of cheese processing. If the demand for cheese decreases, the factory will no longer have a reason to operate. In other words, you can't just focus on whey protein and forget about cheese.

Cheese demand in Europe is projected to increase over the next decade, but there is a risk of oversupply if the whey protein boom continues. This means the dairy industry is bracing for a potentially risky race. If the whey protein boom continues, producers will have to produce more cheese to meet the whey protein demand. But if cheese demand doesn't increase accordingly, they will face an oversupply – a product now relegated to "second-class" status.

There's one crucial detail that can't be overlooked. Only a limited group of manufacturers in the European and North American markets have the capability to transform low-cost whey into a high-value protein ingredient. Those businesses that invested years ago, when the industry hadn't yet seen the opportunity, will now reap the rewards of their courage.

The dairy industry is undergoing a revolution from which there is no turning back. And when this revolution is over, the industry's landscape will be completely different.

Source: https://baotintuc.vn/kinh-te/bai-hoc-tu-nganh-sua-20260526162645510.htm