Protein has a lot going for it. It increases satiety and that leads to weight loss – with or without the use of GLP-1 drugs, which have only increased demand for protein. The huge but dying demographic of Baby Boomers is using it to preserve muscle mass for healthier aging. Finally, early this year the federal 2025-2030 Dietary Guidelines for Americans suggested more protein of all kinds for health of all kinds.

Even carnivores and herbivores might find common ground in dairy-derived proteins. Plus, “The Gen Z group seems to have taken hold of dairy products in general, particularly products that have a lot of science behind them, like whey protein,” says White.

While some reports are calling this an unexpected shortage, “I believe the dairy industry absolutely anticipated growth in demand for dairy protein,” adds White. “What's been incredible is just how quickly that demand has grown.

“The dairy industry has and will continue to invest in protein. The industry added enough cheese & whey processing capacity over the last several years to represent over 4% of the milk supply; demand just grew even faster than expected.”

BT Nauslar, vice president of sales and marketing at Leprino Nutrition (leprinonutrition.com), the dairy ingredients-selling arm of the world’s biggest maker of mozzarella, explains: “The last couple years have seen a rapid rise in what I'll call alternate demand or center of store demand. There’s been a proliferation of the traditional CPG [companies] launching SKUs or fortifying core SKUs with protein, and that’s at a fever pitch right now in the industry.”

Nauslar points to Pop-Tarts Protein toaster pastries as the poster child, but there’s also Nissin Cup Noodles Protein (16g of protein), SkyPop soda (backed by Keurig Dr Pepper), Khloud Protein Popcorn (started by Khloé Kardashian), Doritos Protein and Kraft PowerMac. And protein waters. And ice cream. We could go on …

“You'll hear a lot of people report that we have a supply shortage, but I don't think so,” says White. “You can get product. It's just going to cost you more than ever before.”

Whey protein concentrate (WPC), at 80% protein, is the most widely used protein ingredient. Its cost increased from about $2.50 a pound two years ago to $13 a pound recently. Whey protein isolate (WPI), at 90% protein, has been catching up; its cost is now $14 a pound versus $3.50 a pound. Other milk proteins and ingredients, like caseinates, also have shot up.

“There's been an anxiety in the [buyers’] market for probably the past handful of quarters. I’d say we're still right in the middle of it,” says Nauslar. “If a new buyer comes looking for WPC, there just are not a lot of suppliers with extra protein on the sidelines [and without existing contracts]. That results in those [new] buyers paying higher prices, because they have orders they have to fill. They have production lines they can't shut down.

“Some of these launches are already out there. In retail, it's a sin to go out of stock for too long, especially if you launch a product with the likes of a Target or a Walmart. So these guys that have launched products, they have to find ways to cover their product supply needs.”

Once a useless byproduct of cheese

Whey is a byproduct of the cheese-making process, and almost all whey ingredients result from cheese-making. Decades ago, this watery residue was flushed down the drain, but water treatment charges and the growing popularity of protein turned it into a lucrative ingredient business for cheese processors who could afford the capital expense of buying the separation, evaporation and drying equipment – and usually an addition to your cheese facility, if not a separate plant.

Leprino has nine cheese plants and all also make whey protein ingredients. The Greeley, Colo., plant makes whey ingredients from both the connected cheese plant and, in the proper market conditions, directly from milk. The latter is called native whey.

“The vast, vast, vast majority of whey comes out of a cheese plant,” says Nauslar. “Whey processing is not cheap. It takes a lot of stainless steel, a lot of membrane, a lot of water, a lot of energy.”

And the vast, vast, vast majority of cheese-makers make whey. Only the smallest ones, cottage producers really, can’t afford the additional equipment. However, they can sell their unprocessed whey to aggregators, who will pick it up and make whey protein ingredients in their plants.

The whey protein is about the same whether the cheese source is cheddar, American or mozzarella. He may be a little partial, but Nauslar says mozz makes for good whey because it’s a bland cheese. Stronger, aged or darker-colored cheeses can impart some of their color and flavor to their whey.

Another factor in the whey protein pricing picture is changes in the dairy farmers’ herds. The U.S. beef supply herd is the smallest it’s been in 75 years, so with the resulting price of beef so high, some dairy farmers are raising beef cattle instead of dairy cows. Or they’re turning older, less efficient milk cows into beef.

“The U.S. dairy herd has reached its largest size in 30 years, but one critical subset of the herd — replacement heifers that represent the next generation of milk cows — remains historically low,” warns White.

“The number of heifers available to enter the milking herd has fallen sharply, dropping to the lowest level since 1978,” he continues. “The decline comes as strong financial incentives are prompting dairy farmers to produce calves destined for the beef supply rather than milk production.”

Nevertheless, “The industry added enough cheese and whey processing capacity to represent over 4% of the milk supply over the last several years; demand just grew even faster than expected.”

Why not other proteins?

So why don’t product developers (and consumers) switch to other forms of protein?

“All of the dairy proteins have a lot of science behind them to show that they’re performance-based and functionally attractive,” says White. “The digestibility is industry leading. It's got all eight essential amino acids. It's just a powerful protein, and the market recognizes that.”

The “quality” of proteins is measured on a scale called PDCAAS (Protein Digestibility-Corrected Amino Acid Score), a global standard method that determines how much of a protein's essential amino acids your body can actually absorb and utilize. Whey, casein and milk all receive a perfect score of 1.0 – so do soy protein isolates and eggs. All other protein ingredients are some fraction below 1.0.

Which doesn’t mean there cannot be some switching or substitution. Ingredion Inc. (www.ingredion.com) doesn’t supply dairy proteins, but its portfolio of plant-based protein ingredients can help soften the current shortage of whey proteins. And the company certainly is enjoying the consumer interest in all forms of protein.

“Protein innovation isn't about a single source — it's about adaptability and balancing nutrition, taste and cost as supply conditions evolve amid growing demand,” says Tara Kozlowich, Ingredion’s director of global segment marketing-healthful solutions protein. “It comes down to evaluating options and bringing the full formulation together to meet specific needs for nutrition, texture and taste.”

“We're seeing some pairing, plant with dairy proteins, to address the tightness,” admits Jing Zhou, Ingredion’s senior manager of nutrition. Ingredion has no shortage of its plant-based proteins, and it should be inheriting more when it completes its acquisition of British ingredient supplier Tate & Lyle.

“We offer support to customers. Rather than focus on what the protein source is, we offer solutions that help them balance nutrition, functionality, taste and cost,” adds Zhou. Cost, she says, has become an important element, and not just because of the current high cost of dairy proteins – all processors are dealing with high ingredient prices and worry about the cost increases they’ve passed on to shoppers.

Ingredion primarily supplies pea and rice proteins; its pea protein isolates can be 80-85% protein. “Also, we can find a cereal protein or a seed protein that blends really well and lets [the customer] optimize the PDCAAS score,” says Zhou.

“Seven in 10 consumers say high protein claims influence what they buy,” Zhou continues, “which helps explain why the demand accelerated costs in so many categories of products.”