Can Soy Protein Become the Next Whey?

Cleaning up protein drinks

The outlooks for soy protein and milk-derived protein ingredients look equally promising. Sales of soy protein ingredients are projected to expand to $10.3 billion in 2022 from $7.11 billion in 2015. The whey protein market is forecasted to increase at a compound annual growth rate (CAGR) of 7.6 percent from 2017 to 2022 to reach a total market value of $9 billion. Growing demand could have strong implications for the specialized plant and dairy-based ingredients markets. So-called clear protein beverages, which are formulated with either whey or plant-based protein concentrates, could steepen this upward trajectory.

Protein is isolated from animals and plants in various formulations and grades. However, protein levels in beverages are frequently boosted with protein concentrates and isolates. A protein concentrate has a concentration of 30-80 percent, while an isolate contains a protein level of at least 90 percent. Soy concentrates and isolates are soy flour byproducts which are produced from grinding and screening defatted soybean flakes. Cheese production also makes whey powder, which when further refined creates whey protein concentrate.Whey protein can then be blended with casein to form milk protein concentrate. Casein, another milk-derived protein, aids long-term muscle repair.

Consumers with dairy and soy allergies can’t use either common protein source. Pea protein has been introduced as an acceptable ingredient for the allergic set. Yet, finding the right protein source is just one part of the challenge when infusing a beverage with protein. Solubility, texture, and taste are equally important. Pea protein fails the texture test for many applications, despite scoring high on other counts. pH balance can also limit how and when protein can be infused within a beverage.

New extraction technology is also required before a clear protein beverage can be delivered to the market. The old process for soybean extraction can denature proteins, leave behind byproducts that may require additional research to determine their health impact on consumers. Whey protein concentrates produced with older methods tend not to dissolve. The texture and aftertaste can also vary unpleasantly once mixed in liquid form. Old extraction processes can’t reliably deliver a fully soluble protein mixture for beverages.

Mildly hydrolyzed, acidified whey proteins and soy proteins isolated via ion exchange have been introduced to address longstanding formulation challenges. These extraction processes promise to deliver a strong protein punch and palatable taste. What’s more, several companies now offer protein ingredients that can remain soluble in clear and low-PH beverage formats—the leading profile of energy and “better-for-you” drinks. Yet, producers require lower production costs and market testing before large-scale manufacturing can develop.

Add a little more protein, please

The “sports and energy,” “ready-to-drink (RTD),” and “health and nutrition” drink segments are natural target markets for clear protein drinks. These segments represent some of the fastest growing areas of the global beverage market, despite accounting for a fairly small slice of the global non-alcoholic beverage market. Mountain Dew Kickstart, a perfect example of the segment’s explosive growth, became one of Pepsico's most successful beverage launches in recent years. It reached a few hundred million units sold per year just four years after its launch in 2013.

What’s more, a recent NPD group survey found that 80 percent of respondents were eager to add more protein to their daily diets. Producers can cater to that desire by slipping a palatable supplement into consumers’ drinks. A segment with high growth and relatively low share profile is a good place to be in today’s beverage world.

The food and beverage sector faces major disruption because consumers have become better informed about health and wellness issues. With shrinking demand for much of the carbonated drink segment, beverage companies are looking for options. Prospects for clear protein beverages are still speculative, but there is no doubt that some latent demand exists for the concept. As we have seen with the explosive growth in US butter demand, rapidly shifting consumer trends can take the market by surprise. It clearly pays to remain flexible as a sourcing manager.

A tiny market ready to explode?

Overall soymeal consumption dwarfs soy protein concentrate disappearance, particularly within the United States. There, humans consume less than 2 percent of total soymeal production. However, new demand from clear protein beverages could gradually boost the percentage of soymeal produced for human use.

In contrast, whey protein concentrates and isolates already represent a large component of annual US whey powder production. Whey powder is used as an ingredient in infant baby formula, protein shakes, and other meal replacement drinks.

Even if clear protein beverages are launched successfully, the extra demand would barely budge global soybean and whey prices. There is plenty of whey powder and soymeal supply to absorb the initial demand. It also wouldn’t take much to light a fire under whey and soy protein concentrate and isolate prices. Two billion unit sales of a 10g protein-infused beverage would require 41,026 additional metric tons (tonnes) of defatted soy flake. That isn’t a big number in an industry that boasts a global annual volume turnover of nearly one trillion units, but it is a sizeable order for specialized protein concentrate and isolate manufacturers. Current installed manufacturing capacity is in the hundred of thousands not millions.

Price of soybean protein concentrates could leap

Soybean protein concentrate prices are likely to head higher, regardless of the popularity of clear protein beverages. For many applications, soy protein prices are hard to beat. Soy protein can cost substantially less than whey at the same concentration. In other cases, such as infant formula, it is more difficult to find a substitute for whey protein. However, there should be plenty of demand to go around for both whey and soy protein ingredients if recent consumer trends hold. Soy protein ingredient prices should increasingly reflect this reality.

More protein, more soy and whey

Clear protein drinks are slowly moving into the mainstream. The beverages can be found in stock at wholesale discount clubs, such as Sam’s Club. Most of the initial beverage products are using whey-protein isolates or hydrolysate. That makes sense since whey powder has been a go-to source for beverage companies looking for protein fortification. However, several soy-based concepts are also being tested. Isolated soy protein is particularly suitable for neutral and low pH beverages. We expect to see more clear protein beverages with soy inside as manufacturers refine their formulas.

However, we wouldn’t expect clear protein to pop up tomorrow in every existing beverage category. These clear protein ingredients add to unit costs and sometimes aren’t even technically feasible because of a beverage’s pH and taste attributes. Beverage companies will also need to reformulate and test existing products with fortified protein, which can take months if not years. While new extraction technology promises to solve past taste and formulation challenges, these new ingredients can still leave a mild, but distinct, aftertaste in pH-neutral beverages.

While it is easy to dismiss clear protein as another gimmick by marketers, “more protein” is an easy sell today. Research shows that more consumers are looking for additional ways to add protein to their diets. Almost all of the growth in the non-alcoholic beverage segment is coming from “better-for-you” concepts. Beverage companies need to ride this consumer trend for as long as it lasts. Beverage companies will also likely heavily rely on new formulations of whey and soybean concentrates for protein fortification. The end result is that there is significant room for the price of soy protein concentrates and isolates to go higher in the coming year given the steep discount to whey prices.