Whey costs squeeze protein brands despite GST relief

Protein supplement companies are facing sustained cost pressure as whey protein prices continue to rise sharply, offsetting the impact of a GST cut on nutraceuticals from 18% to 5% in September 2025.

Whey protein concentrate, the industry’s primary input, has risen from about Rs 700–800 per kg until 2024 to over Rs 2,000–2,300 per kg, according to industry executives. “It has more than tripled over the past two years and is quickly approaching 4x,” said AVP at HealthKart, which owns brands such as MuscleBlaze and HK Vitals. “Whey isolate has also tripled in price over the past couple of years,” founder of Wellbeing Nutrition, said.

Companies focused on clean-label products are also seeing input inflation beyond whey. “The cost of cashews and cocoa has doubled. Whey protein has tripled in the meantime. Food inflation in the last few years has been insane,” founder of The Whole Truth, said.

The supply constraints are structural. Whey is a byproduct of cheese production and cannot be scaled independently. India imports most of its whey but faces restrictions from the US, the largest producer, as suppliers there do not provide vegetarian certification required under Indian food regulations. A weaker rupee has added to import costs.

Imports from Europe have also been disrupted amid shipping issues linked to the US-Israel conflict with Iran, tightening supplies further. Domestic production remains limited, meeting less than a tenth of demand, as the dairy sector is geared towards milk and traditional products rather than cheese, and lacks capacity to produce supplement-grade whey efficiently.

Import Hurdles, Weak Rupee, and Shipping Woes

At the same time, demand has expanded beyond supplements into packaged foods. “You have whey protein going into a roti, cake, lollipop, ice cream, water. All of this is driving local demand upwards,” an industry executive said.

Most companies have raised prices or absorbed part of the increase. The Whole Truth has implemented multiple hikes, including a recent 15–20% increase in protein bar prices. “We’d rather shut shop than deviate even an inch from our recipe,” he said. HealthKart has also increased prices while absorbing some costs, Paliwal said.

Some firms are shifting focus away from whey. Wellbeing Nutrition, where whey contributes 15–20% of revenue, has reduced active promotion of the category, he said.

Quality Concerns

Industry executives said pricing pressures have also led to concerns around product quality, with some brands offering products at prices that “don’t add up”. A 2024 study, the Citizens Protein Project, found 70% of tested supplements fell short of declared protein content.

Alternative proteins such as plant-based and fermented yeast variants are gaining traction, though their efficacy relative to whey remains under evaluation. Without supply-side interventions, including easing import constraints and building domestic capacity, cost pressures are expected to persist.

Source from: https://www.financialexpress.com/business/news/whey-costs-squeeze-protein-brands-despite-gst-relief/4180696/