The powerful Dutch dairy industry is scrambling to cash in on exploding demand for whey, a cheese by-product once used mainly in cattle feed that's turned into a global nutritional hit.
Over the last decade powdered whey, produced when milk separates into curd during the cheese-making process, has become a multibillion-euro industry. Analysts say research has proven that whey, once the ugly stepsister to its more widely consumed sibling, cheese, is in fact one of the planet's best sources of natural protein.
From bodybuilding supplements to infant formula and fortified meals for the elderly, demand for whey has skyrocketed over the last five years, with even non-dairy companies wanting a piece of the action. And analysts predict that is likely to keep growing, driven by a taste for imported dairy products from Asia's growing middle class and the expanding ranks of elderly around the world.
Last year whey powder and proteins represented a global market of €7.6 billion (HK$75.2 billion), up 36 per cent from 2011, said Tage Affertsholt, dairy market specialist at the Danish-based 3A Business Consulting Group.
By 2017, the market will have expanded to €9 billion, Affertsholt predicted. The demand for whey "just keeps growing, irrespective of the relative poor performance of the global economy," he said. "Some people used to say whey is a by-product. Today cheese has become something of a by-product."
Investment in the whey industry since 2012 has topped €3 billion globally, including €2 billion in Europe. "At one stage whey was worth pretty much nothing, only good to go into cattle feed," Rabobank senior analyst Kevin Bellamy said. "Today, whey forms a major part of many dairy companies' profits."
The Dutch dairy industry is fighting for its stake in the rapidly expanding market.
"All the major dairy companies in the world are squaring up for control of the liquid whey industry," said Affertsholt.
One of the world's largest dairy cooperatives, FrieslandCampina, now produces more than 350,000 tonnes of "whey dry matter" a year. Fonterra plans to export whey from there to the half-billion-euro Chinese market, said Jan Willem van der Windt, the company's European financial director.