From Surplus to Shortage: The Food Waste Story Behind Whey Protein

Demand for whey protein has surged in recent years, driven by growing consumer interest in high-protein foods and the expansion of protein into a wider range of products. Today, the average U.S. supermarket carries more than 38,000 products advertising their protein content, with whey appearing in everything from cereals and snacks to breads and beverages. More recently, growing use of GLP-1 medications has added to this demand, as people taking the drugs look for convenient ways to consume protein while eating less overall.

Supply has struggled to keep pace with the rise in demand. The USDA has reported that U.S. whey protein end-of-month inventories have fallen by roughly half since 2023, and some suppliers are completely sold out for the remainder of 2026. While new production capacity is being developed, some major expansions will not come online until 2027 or later. Prices have increased accordingly. WPC80, a whey protein concentrate containing 80% protein, has recently traded at more than $13 per pound in the U.S., roughly 250% higher than a year ago. Whey protein isolate prices have risen roughly 150% over the same period.

For the food waste movement, there is an interesting dynamic behind these numbers: whey has historically presented the dairy industry with the opposite problem. As an abundant byproduct of the cheese manufacturing process, whey has typically had manufacturers trying to figure out what to do with all of it rather than worrying about how to produce enough of it.

That history raises an important question: how can demand for whey protein be outpacing supply, while some whey and other dairy side streams remain underutilized and wasted? The answer demonstrates how markets, infrastructure, technology, and economics can all play a role in determining whether a material becomes waste or a valuable resource.

From Unwanted Byproduct to Valuable Ingredient

Whey is commonly generated as a byproduct of cheesemaking. During the process, milk separates into solid curds and liquid whey, with roughly nine pounds of liquid whey generated for every pound of cheese produced. That liquid can then be processed into products such as whey protein concentrate and whey protein isolate.

Historically, however, whey was a relatively low-value byproduct that dairy processors needed to find uses for. Depending on the processor and circumstances, it could be directed to animal feed and commodity markets, land applied, or sent to wastewater treatment. And while whey protein supplements have existed for decades, demand was much more limited than it is today.

“The whole whey story is a really interesting one to look at because it’s a shining example of how something that has traditionally been a waste product has been reformulated and revalued in ways that are meeting market demand at the right time,” explains Laura Ginsburg, Dairy Strategy and Innovation Manager at the Vermont Agency of Agriculture, Food & Markets.

Several factors have contributed to that transformation. Consumer interest in protein has expanded beyond traditional sports nutrition, while advances in ingredient technology have made whey easier to incorporate into a wider variety of foods and beverages. More recently, the rise of GLP-1 medications has added another source of demand. Ginsburg likens the transformation to something of a “Cinderella story”: a material that producers once struggled to manage has become a valuable commodity that manufacturers are now struggling to produce more of.

Why a Whey Shortage and Unused Whey Can Coexist

The apparent contradiction between a whey protein shortage and underutilized whey starts with an important distinction: whey is not one uniform product.

Different dairy processes produce different types of whey and other side streams, and they are not equally suited to producing the high-protein ingredients currently in short supply. Cheese whey, for example, can be well suited to protein recovery, while acid whey from products such as Greek yogurt contains less recoverable protein and can be more challenging to process economically.

Infrastructure presents another challenge. Liquid whey does not automatically become WPC80 or whey protein isolate. Producing these ingredients requires specialized filtration, concentration, and drying capacity, which are expensive to build and maintain and cannot expand as quickly as consumer demand.

Scale can also determine whether recovering value from whey makes economic sense. Large dairy processors handling significant volumes may be able to invest in the infrastructure necessary to process whey into valuable ingredients. Smaller cheesemakers can face a very different reality.

“For smaller processors that are very typical of the Northeast region of the United States, they still are dealing with the issue of what to do with whey. Because it doesn’t make economic sense for them to put it on a truck and haul 100-500 gallons somewhere,” Ginsburg explains.

As a result, two realities can exist at the same time: certain high-protein whey ingredients can be scarce and extremely valuable, while other whey and dairy streams remain underutilized and go to waste. Composition, processing capacity, transportation, scale, and economics all influence whether a particular stream can be put to a productive use.

Turning Remaining Waste Streams into Opportunity

These challenges are also creating opportunities for new approaches to capturing value from dairy side streams.

Fermeate, a grantee of the ReFED Catalytic Grant Fund, is developing fermentation processes that can use underutilized dairy streams to produce higher-value ingredients. Rather than relying solely on recovering protein already present in whey, the company is exploring how components such as lactose can serve as inputs for fermentation processes that produce new products, including proteins, sweeteners, and flavor molecules.

This approach creates opportunities for streams that may not be well suited to conventional whey protein production. Acid whey, for example, may contain relatively little recoverable protein, but it still contains lactose and other components which may be converted into higher value ingredients.

“Working with Fermeate gives these dairy companies an opportunity to upcycle these underutilized streams,” explains Ke (Kevin) Xu, Co-Founder and CEO of Fermeate.

The opportunity is therefore broader than increasing the supply of conventional whey protein. It is also about finding higher-value uses for more of the nutrients and materials already moving through the dairy system.

“Some of the most exciting food waste innovations aren't just finding a home for surplus, they're fundamentally rethinking what we consider a valuable input. Companies like Fermeate are showing how materials once treated as low-value byproducts can become the building blocks for entirely new products,” Veza shares.

What Whey Can Teach Us About Food Waste

Whey’s transformation demonstrates that “waste” is not a permanent and inflexible category. A material can move from an unwanted byproduct to a valuable commodity when consumer demand, innovation, and economics align.

Today’s protein boom could further accelerate that transformation. Higher demand creates new incentives to invest in processing infrastructure, develop markets for underutilized streams, and explore technologies that can recover value from components that might otherwise go unused.

“This consumer demand is going to drive a lot of innovation in food waste reduction,” Xu says.

At the same time, today’s whey shortage may not last forever. Dairy markets change, consumer preferences evolve, and new production capacity is already being developed. Ginsburg points out that this makes continued innovation around alternative uses for whey and other dairy side streams important even when demand is high. “Those efforts should continue because there will be a point in time when there will be too much whey as well, and we’ll have to go back to the drawing board,” she explains.

“Ultimately, food waste reduction isn't just about wasting less—it's about getting better at seeing, and maximizing the value of, what’s already moving through our food system,” Veza explains.