Growth in cheese demand solidifies organic whey protein supply, says Milk Specialties Global

Milk Specialties Global says its new organic whey protein has a flavor advantage over competing plant-based proteins. MSG photo.

The growth of organic cheese production has ensured the supply chain for organic whey, said Milk Specialties Global. The company says its new organic whey protein ingredient helps fill a gap in the market.

One factor in the growth of organic offerings has to do with demand. Despite the difficulties in going organic, the mandatory three year transition period for new organic acreage being chief among them, the thinking is that rising demand will over time bring new supplies onto the market. But for organic whey, the dynamics of the cheese market come into play. Whatever the market for sports nutrition protein products might demand, whey producers are at the mercy of the cheese market, said MSG vice president Chris Baughman. The demand for organic cheese has now reached a point that there is enough organic whey raw material to begin to supply that demand, he told NutraIngredients-USA. The shortage of feedstock in the past has led to delayed product launches and high prices, but that is starting to change with the launch of its new powdered whey protein ingredient that also features sunflower lecithin.

“Over the past years there has been a major issue with organic milk and whey. In order to make organic whey there has to be organic cheese on the market,” he said.

“We have been working very hard on the supply side and we believe that we are at a turning point where the costs are starting to come down because there has been a big improvement in the supply base,” Baughman said.

Cheese market changes

According to a report put out in May from Packaged Facts, the total US annual retail sales of natural and specialty cheese was estimated $17.4 billion in 2105, growing at CAGR of 4.1% since 2011, largely driven by lower prices and the consumer snacking trend. The report predicts that the specialty cheese market will grow by a CAGR of 3.5% to reach $20.7 billion by 2020.

While ramping up certified organic production is a slow process for any product category mostly because of the protracted process of certification, it’s especially difficult in the dairy supply business, Baughman said.  Organic cheese means a certified organic production facility, organic milk, organic cows, organic feed and so forth. And many of these cheese factories are small operations, meaning a company like MSG has to manage many relationships and look years down the road to bring a product like organic whey protein to market.

“When we work with our milk suppliers that want to go organic, one of the things we caution them on is that you are going to become a victim of your own success and you are quickly going to outstrip your supply,” he said.

“At the end of the day, the cheese company is still in the business of selling cheese. We have not seen the need for us to step in to incentivize that growth because we see the demand from the consumers for organic cheese continues to grow.  We think the organic whey supply will continue to improve and we don’t think that’s a short term trend,” he said.

Growth of organic

Certified organic products have never formed a major part of the overall dietary supplement market. It’s difficult to fit some supplement manufacturing realities, such as the need for certain excipients such as binders and lubricants, into an organic positioning. And the return on investment case is harder to make. Consumers don’t seem to connect “organic” with capsules and tablets when it comes to their list of important attributes to form a buying decision. 

Baughman said the situation is different for protein powders, perhaps because of the greater bulk and more ‘food like’ feel of these products. There has been significant demand for organic products in this category, and because of the supply issues with organic whey, plant proteins got a leg up in this market.

“What we see in the marketplace is you have a lot of organic products but by and large they are plant-based,” Baughman said.

Whey protein has an efficacy story to tell in sport nutrition. Some experts claim that when looking only at the data on protein performance whey is the clear choice, while others claim this can be compensated for by just eating more of the alternative proteins. But Baughman said whey has another advantage that has nothing to do with absorption or muscle synthesis data sets: It just tastes good.

“One of the things consumers have been asking for is they want to live the organic part of their lifestyle not just in the foods they buy but also in the supplements they use. They are saying that they can get the plant-based proteins but it just doesn’t taste that good. The No. 1 attribute we hear from consumers is that it has to taste good,” he said.

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