The Protein Powder Problem: Why Is There a Whey Shortage?

The United States is preoccupied with protein intake.

In recent years, Americans have steadily increased how much protein they’re consuming each day, in some cases doubling recommended amounts. To meet consumer captivation, companies are adding the macronutrient to everything from flavored water to ramen noodles.

That, coupled with the increased popularity of protein among GLP-1 users, has contributed to a whey protein shortage, sending prices soaring.

Babson College Economics Visiting Assistant Professor of Practice Zachary Knauss, who enjoys powerlifting in his free time and has long incorporated protein powder into his diet, breaks down how protein intake became embedded into the diets of many, when we can expect the shortage to ease, and how he brings real-world moments like this into the classroom.

Why has the popularity of whey protein grown so much in recent years?

“When I was growing up, whey protein was marketed almost exclusively to bodybuilders and very dedicated gym-goers, and I remember my mom asking me if the tub of whey protein powder in our kitchen was steroids. … Today, my mom, sister, and brother (all people who would not be caught dead in a gym) consume the same protein powder I do because they’ve been exposed to various health and nutrition trends through social media. I also recently walked into a Starbucks and noticed they were advertising ‘protein-enhanced’ milk options for drinks. That suggests whey protein has moved from a niche fitness supplement to a mainstream product.”

What are the factors causing the recent shortage in whey protein? Is it classic supply and demand, or are there greater structural issues?

“The story appears to be largely one of demand growing faster than supply can adjust. The expansion of fitness culture and health trends powered by social media influencers has created a substantial positive demand shock, and maybe just as, if not more, importantly, sudden and widespread adoption of GLP-1 weight-loss medications are adding to that shock.

“My fiancée works in bariatric surgery and tells me that patients are always encouraged to consume whey protein to preserve muscle mass while losing weight, which seems very similar to the nutritional advice given to many GLP-1 users. At the same time, whey protein production cannot be expanded overnight because it is tied to dairy production and requires specialized processing capacity. Economists would describe this as a positive demand shock occurring alongside relatively inelastic short-run supply, which naturally results in shortages and higher prices, which is exactly what we’re seeing.”

Do you think this shortage is a temporary shock or part of a longer-term trend in dairy or protein supply?

“My impression is that the increase in protein demand is likely part of a longer-term trend, while the shortage itself is probably temporary. If consumers continue preferences for protein-rich food and drinks, and if trends like GLP-1 usage remain widespread, then the new demand may be permanent. However, Economics 101 tells us that apart from raising prices, shortages can be a signal for these firms to invest in additional processing capacity and bring new entrants into the market. Over time, markets generally adjust, so I would expect the supply shortage to ease even if protein consumption remains permanently elevated, with prices downwardly adjusting.”

When can we expect the shortage to be resolved?

“The bottleneck appears to be in the expensive process of turning raw whey (a byproduct of making cheese) into a form suitable for consumers, and these facilities are mostly at full capacity. Building that additional processing capacity takes significant time and investment—years rather than months.

“Another possibility is consumers substitute their consumption of protein in other ways. High enough prices could get me switching to soy and cottage cheese smoothies!”

Do fitness- or food-related economic trends like this resonate with students when brought into the classroom?

“Absolutely. Students tend to engage most with examples they encounter in everyday life, and this is certainly something many students have encountered. I’ve even taken polls of how many of my students consume whey protein or use creatine supplements, and it’s usually a substantial amount. That makes this a very useful tool to teach students about supply and demand responding to shocks causing changes in equilibrium price and quantity, something central to all economics principles courses.”