THG says high whey protein prices will a chunk out of profits

A significant drop in profits is anticipated for the health and beauty company behind the Myprotein brand due to soaring prices of the key ingredient whey. Whey protein, once considered a cheese-making by-product, has gained popularity in smoothies, food products, and among individuals using injectable weight loss medications to prevent muscle loss. THG, the parent company of online cosmetics and skincare retailer Cult Beauty, cited substantially higher prices for whey that have hit a record high in the past year and have remained elevated.

Instead of passing on the increased costs to consumers, THG has decided to absorb the expenses itself in order to expand its market share. The trend of consumers becoming more health-conscious in recent years has led to a surge in the demand for protein in food and beverages. John Stevenson, a retail analyst at Peel Hunt, noted the prevalence of protein-enhanced options in supermarkets, including puddings, yogurts, and drinks. Additionally, the use of weight-loss drugs like Wegovy and Mounjaro has contributed to the growing interest in protein, according to Meredith Smith, consumer futures lead at Kantar.

Myprotein, a brand that offers a range of ready meals in partnership with Iceland and protein shakes with Muller, accounts for a third of THG’s total revenues. Despite the anticipated decline in underlying profits for the first six months of the financial year, sales from the nutrition business are projected to increase by 10% to 12% in the latter half of the year. THG plans for Myprotein to strategically limit price increases during this period to gain a larger market share. Novo Nordisk, a pharmaceutical company, recently revised its full-year growth outlook following a slowdown in GLP-1 drug sales during the first half of the year.

Lars Fruergaard Jørgensen, the company’s CEO, disclosed that sales growth for brands like Ozempic and Wegovy had decreased to 8% in the initial six months of the year, down from 21% compared to the same period in 2024. A report from Morningstar Equity Research suggests that the global market for GLP-1 drugs is projected to reach $200bn by 2031, with Novo Nordisk and Eli Lilly, the manufacturer of Mounjaro, facing heightened competition from more affordable generic alternatives

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