Summary of Key Points
Recently, there has been a sudden surge in global whey powder prices, especially for high-purity products such as WPI90 (whey protein isolate) and WPC80 (whey protein concentrate), which have almost doubled in cost. The root cause is the popularity of GLP-1 class weight loss drugs in the United States: these medications reduce appetite and lead to decreased consumption of regular meals. As a result, doctors recommend supplementing with proteins to maintain health, driving a surge in demand for protein supplements. Whey powder is a key ingredient in these supplements, and it is also a byproduct of cheese production (9 kilograms of whey are produced from every 1 kilogram of cheese). Short-term capacity expansion is difficult, leading to an imbalance between supply and demand and soaring prices. This price increase not only makes protein supplements more expensive for fitness enthusiasts but also puts pressure on infant formula companies. Domestic dairy companies are taking the opportunity to expand their production of cheese and whey to reduce their reliance on imports, although they still face challenges such as cost differences.
The Origin of the Whey Powder Price Increase: American Weight Loss Drugs Driving Protein Supplement Demand
GLP-1 class weight loss drugs are currently very popular in the United States. They suppress appetite and slow down gastric emptying, helping people lose weight, but the side effects (nausea and vomiting) cause users to consume fewer high-calorie foods. Doctors recommend protein supplements to ensure adequate protein intake, and high-purity whey powders (WPI90 and WPC80) are the main ingredients in these supplements. The U.S. market accounts for a large portion of global demand for these types of whey powders (China's demand is less than 5%), so when demand surges, prices worldwide follow. Additionally, since whey is a byproduct of cheese production, a decline in cheese demand leads to reduced whey supply, and speculation by buyers further drives up prices. It is difficult to increase production in the short term; extracting whey directly from milk is inefficient and costly, so waiting for increased cheese production capacity is the only option.
Who Is Being Affected the Most?
- Fitness Enthusiasts: The price of a 5-pound package of whey protein powder from a well-known brand has risen from 369 yuan in December last year to 458 yuan, an increase of over 24%, significantly increasing the cost of these supplements.
- Infant Formula Companies: Whey powder accounts for 30%-40% of the ingredients in infant formula. In June this year, the price of D90 desalted whey powder doubled compared to the beginning of the year. While larger companies can temporarily absorb the increased costs without raising prices, smaller brands may struggle and eventually pass on the extra costs to consumers.
Opportunities for Domestic Dairy Companies: Expanding Cheese and Whey Production
Previously, China relied almost entirely on imported whey powder. With the current price surge, leading dairy companies are beginning to reduce their import dependence by expanding their own production:
- Mengniu's Miao Ke Lan Duo cheese business has seen rapid growth (31.8% increase in the first quarter of 2026), and they also produce raw cheese and whey powder.
- Yili has introduced a desalted whey powder production line and is investing in advanced protein processing projects.
- Feihe has built a second-phase project in Inner Mongolia to produce desalted whey and casein.
These companies aim not only to meet their own material needs but also to develop high-value-added products (such as functional and sports nutrition products) to reduce their reliance on imports.
Challenges Behind the Opportunities: Cost Differences and Differentiation
Although there is potential for domestic substitution, domestic dairy companies face two main challenges:
1. High Costs: The cost of raw milk in China is higher than in major dairy-producing countries like New Zealand, increasing the cost of whey production.
2. Cultural Differences: They cannot simply replicate foreign production methods to create "high-quality, sophisticated" differentiated products (such as function-specific whey for Chinese consumers). Analysts warn that developing the whey industry requires a gradual approach; otherwise, the efforts may not be worthwhile.
Conclusion
The current price increase in whey powder is the result of a chain reaction: weight loss drugs leading to increased demand for protein supplements, which in turn has pushed up whey prices. In the short term, these prices are unlikely to fall. For consumers, this means higher costs for fitness supplements and infant formula. For domestic dairy companies, it presents an opportunity to expand their production of cheese and whey, but they must overcome challenges related to costs and product differentiation. The most noticeable change for ordinary people is the increased cost of protein supplements—a reflection of the broader global supply chain effects.