THG's Profits to Take a Hit Due to High Whey Protein Prices

High whey protein prices have significantly impacted THG's profits, with underlying profit expected to fall to £24m from £37.1m in the same period last year. Despite this, the nutrition business is expected to grow by 10-12% in the second half of the financial year, with Myprotein limiting price increases to increase its market share. The rise in demand for protein-enhanced food and drinks, driven by consumer health consciousness and weight-loss drugs, has contributed to the growth of the protein market.

Title: High Whey Protein Prices Impact The Hut Group's Profits

The health and beauty firm behind the Myprotein brand, The Hut Group (THG), has reported a significant drop in profits due to the high price of whey protein, a key ingredient in its products. According to the company, its underlying profit for the first six months of its financial year is expected to fall to £24m from £37.1m in the same period last year [1].

Whey protein, once a by-product of cheese-making, has become increasingly popular for use in smoothies, food, and injectable weight loss medications to prevent muscle wastage. The rising demand for protein in food and drinks, driven by consumer health consciousness, has led to a substantial increase in the price of whey. THG attributed the higher prices to "substantially higher" costs for whey, which have reached record levels over the past year and remained there [1].

Despite the profit decline, THG's nutrition business is expected to grow by 10-12% in the second half of the financial year. The company has decided to absorb the cost of higher whey prices rather than passing them on to customers, aiming to grow its market share [1].

The growth in the protein market is being driven by a mix of factors, including the rise in health consciousness among consumers and the popularity of weight-loss drugs. The trend towards higher protein intake is particularly evident among younger generations. According to a report by Emarketer, 44% of US consumers and 51% of Gen Z and millennials are actively trying to boost their protein intake [2]. This trend is reflected in the increasing number of high-protein products coming to market, with brands like Starbucks and General Mills expanding their offerings.

The weight loss drug market, which is expected to reach the billion-dollar level by the end of the decade, is also contributing to the demand for protein. Drugs like Wegovy and Mounjaro, which contain the active ingredient semaglutide, have seen strong sales growth. Eli Lilly's Zepbound, another weight loss drug, underperformed in the third quarter, but the company remains optimistic about the potential demand for these drugs [3].

In summary, while high whey protein prices have negatively impacted THG's profits, the company's nutrition business is expected to continue growing, driven by the increasing demand for protein in food and drinks. The weight loss drug market, which is expected to reach billions of dollars by 2035, is also contributing to this growth.

References:
[1] https://www.bbc.com/news/articles/clyd1p2njz2o?at_campaign=rss&at_medium=RSS
[2] https://www.emarketer.com/content/protein-product-trend-2025-consumer-demand-growth
[3] https://www.moomoo.com/news/post/13325525/record-tr4cking-news-default