Whey concentrate prices double in two years

Chinese demand drives whey above €7/kg – but is it over priced?

Mellentin: "Vegetable proteins have for a long time had the advantage for product manufacturers in that they can address cost and supply chain issues”

Soaring whey prices are changing the face of the protein concentrate market, but hefty Asian-driven premiums won’t signal a flood to plant proteins, says an analyst.

Standard whey concentrates (80%) have doubled in price to about €7/kg in the past two years as demand has boomed in places like China and Indonesia as well as in sectors like sports nutrition.

Pea, rice and soy typically rest around the €5-5.50/kg mark, but French pea protein supplier Roquette said that figure was for the highest quality pea isolates and not an industry average.

It’s a potentially lucrative price differential for dairy-for-plant protein switching, something one observer said could occur in protein bars with no detectable taste and texture effects at up to 30%.

"Vegetable proteins have for a long time had the advantage for product manufacturers in that they can address cost and supply chain issues,” said analyst, consultant and editor, Julian Mellentin of New Nutrition Business.

“The historic volatility of dairy protein prices – and their high price level compared to vegetable proteins – has for several years caused manufacturers to look to soy and others for better price stability in their value chain.”

"What’s more, many manufacturers see the global demand for protein from a long-term perspective and predict shortages and higher prices in the future. So they are diversifying so as not to be over-reliant on one type of protein when supply is tight and prices are moving."

Mixed portfolios

Dairy and plant protein suppliers are moving with the changes especially in regard to diverse usage of proteins. In Denmark, Arla Food Ingredients business area director in nutrition, Anders Steen Jørgensen, acknowledged the growing interest in plant proteins.

"It is correct that our buying industries will be looking for alternatives to dairy, but there is a significant difference between sport, clinical and functional foods on one side and infant nutrition on the other side,” he said.

“I do not believe the infant market has a big incentive to formulate cheaper recipes. There is a playing field for bovine milk formulas and as long as our customers buy at an equal price level, there will be formulas made with dairy proteins.”

He added:"Most larger players will have non-dairy protein formulas in their assortment and if large price differences prevail there might of course be a substitution at end-user level leading to a change in market share between the different formulas offered. But in my mind we are talking slow evolution, whereas the substitutions in adult applications might be more short term."

One change is in typical dosages that have near on doubled in regular foods and categories like sports nutrition.

Claims, taste

Mellentin noted the advantage dairy proteins held in terms of clinical backing and formulation.

"There is a growing list of protein sources from which manufacturers can choose – not only soy and dairy, but pea, algal-source and many others. As a result all protein suppliers - dairy, soy and pea alike - are working hard to distinguish the value, quality and functionality of their protein.”

"However, vegetable proteins often have significant problems with taste and with the range of applications they can be used in and this will mean that using dairy protein will continue to be the preferred option whenever possible for most manufacturers."

"There's another factor and that's science. Dairy can now be seen to have a scientific base that vegetable proteins lack - and that's vital in applications ranging from sports nutrition to weight management to medical and infant nutrition.”

Dairy proteins have also benefitted from a recent United Nations' Food and Agricultural Organisation (FAO) report that found dairy proteins were more efficacious than plant proteins, although the plant protein sector at the time argued that the findings were only relevant in undernourished populations. See here for more on that.

Protein alternatives

The Quorn meat alternative brand sources its protein from soil while insects have been touted as one potential source of protein concentrates along with the likes of potatoes and vegetable waste streams.

Danish protein processor Upfront Chromatography is fielding more and more enquiries about protein extraction from varied sources.

“We have had many inquiries in the last months for our technology,” said CEO, Karsten Lindved.

“With our technology producers can isolate soluble proteins from various origins. The concentration of the proteins in the starting material can be very low and we’ll still be able to produce a protein isolate with over 95% concentration."

"With the increasing protein prices many producers are re-evaluating their current production flow and trying to identify possibilities for improvements.”

Mellentin said the landscape was about much more than a plant-animal protein dialectic. “We will see new protein ingredients appearing, reflecting the complementary nature of diverse sources. Each grouping has strengths. It will be: ‘How can we best combine and extend protein sources to efficiently feed a world demanding ever more protein?’.”

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