THG says high whey protein prices will a chunk out of profits

The health and beauty firm behind the Myprotein brand has said its profits will fall by £13m because of the high price of key ingredient whey.

Once regarded as a by-product in cheese-making, whey protein has become increasingly popular for use in smoothies, food and for people using injectable weight loss medications to prevent muscle wastage.

The Hut Group (THG), which also owns online cosmetics and skincare retailer Cult Beauty, blamed “substantially higher” prices for whey which reached a record over the past year and have stayed there.

The company said that instead of passing on higher prices to customers, it would absorb the cost itself to grow market share.

With consumers becoming more health conscious in recent years, demand for protein in food and drinks has risen.

“You walk into a supermarket and everything is protein enhanced,” said John Stevenson, retail analyst at Peel Hunt. “You can buy protein-enhanced puddings and yogurts and drinks.”

Weight-loss or GLP-1 drugs, such as Wegovy and Mounjaro, have also played a part in the rise, added Meredith Smith, consumer futures lead at market research firm Kantar

“The collective consumer consciousness is ‘relearning’ how to fuel their bodies and minds, and high protein has been a major priority reinforced with GLP-1 users,” she said.

Myprotein, which sells a branded range of ready meals in Iceland and protein shakes with Muller, makes up a third of THG’s revenues.

Underlying profit for the first six months of its financial year will fall to £24m from £37.1m in same period last year, the company said.

Sales from its nutrition business, however, are expected to grow by between 10% and 12% in the second half of the financial year.

THG said Myprotein would “limit price its increases” over that period to increase its share of the market.