Whey and weight-loss drugs to eat into Applied Nutrition profit
Applied Nutrition has warned that a five-fold increase in whey protein prices will eat into its bottom line next year even as it beefed up its forecasts for the next year.
The protein-shake maker revealed its adjusted pre-tax profit had risen by more than 40 per cent in the 12 months to August, a figure it said was “considerably ahead of consensus market expectations”. It also expects to grow earnings by a further 13 per cent to £49m.
But the firm, whose shares have more than doubled since it listed on the London Stock Exchange in 2024, also warned that “significantly higher” weigh protein prices will eat into its margins in the year ahead.
Whey protein prices have risen five-fold in recent years in part due to an enormous spike in demand fuelled by the popularity of weight-loss drugs. One of the side effects of so-called GLP-1s like Wegovy and Mounjaro is muscle atrophy, forcing many users to rehash their diets and exercise regimes.
Consequently, people taking the medication have increasingly been turning to protein-heavy diets alongside more weight training in a bid to preserve muscle mass while also losing weight.
The higher demand for whey protein, the most common type of protein found in bars, shakes and supplements, has bumped up against a fixed supply chain, pushing up prices of one of Applied Nutrition’s core ingredients.
Applied Nutrition sees further rapid growth
The Mersyside-based firm, established in 2014 by founder Tom Ryder, still unveiled forecasts ahead of analyst and investor expectations.
Revenue will top £200m for the first time in the company’s history, while pre-tax profit is also expected to fall just shy of £50m, Applied Nutrition said in an unaudited set of full-year results. Its shares popped 7.5 per cent at market open.
Higher whey prices are the latest in a long line of examples of the disruptive effect that the mass roll-out of weight-loss has had on business. Food giants like Nestle and Pepsico have launched nutrient-rich lines of ready-meals in a bid to cater for people with supressed appetites but who still require a balanced diet.
Meanwhile analysts and investment managers have warned that the future growth prospects of large alcohol companies will slow as a result of the drugs’ effect on demand for drinking. In 2025, Terry Smith, who manages the £13bn Fundsmith, sold a stake in Diageo that his fund had held for several years citing the impact GLP-1s will have on the consumption of alcohol.
“It seems likely that the drugs will eventually be used to treat alcoholism, such is their effect on consumption,” Smith said in his 2025 annual letter to shareholders.