Key Takeaways
- Coca-Cola is leaning into its high-protein milk products, but also planning to shake up the segment’s offerings as competition in the space heats up.
- Many food and beverage companies are focused on protein as a greater share of Americans take GLP-1 drugs or otherwise embrace the macronutrient.
Coke is bulking up on protein.
Coca-Cola (KO) is opening one of the largest dairy processing plants in the U.S. as it works to satisfy demand for Fairlife milk filtered to remove lactose and reduce sugar, but keep protein, its executives said on a conference call Tuesday. It’s doing so as more companies, from ingredient suppliers to supermarkets and cafes, are catering to consumers’ hunger for protein.
Interest in the macroingredient has grown alongside use of GLP-1 drugs, medications used to treat diabetes, obesity and weight loss. About 12% of American adults take GLP-1 medication and its usage will likely grow, General Mills (GIS) said at its investor day this month. Coca-Cola knows its expansion comes as others are racing to release their own protein-packed products, CEO James Quincey said.
“Competitors [are] coming into the space across all sorts of food and beverages,” Quincey said, according to a transcript made available by AlphaSense. “We believe we have great brands; we have excellent products. There’ll be a lot of new innovation.”’
Why This News Matters to You
Companies often roll out new recipes or flavors, or otherwise “innovate” a product to help justify higher prices and attract new buyers. Protein-dense products may exemplify this sort of business strategy, but they may also indicate broader shifts in diet prompted by growing use of GLP-1 medications.
Many consumers—on and off the aforementioned medication—are keen to add more protein, which can make people feel more full and assist with building muscle, to their diets. (Americans generally get enough of the macronutrient, according to nutritionists.)
Eaters’ preference for protein is showing up at a growing number of companies. Premier Protein Shakes were among the top five purchases during Amazon’s (AMZN) past two Prime sales, according to Numerator, a market research firm. Meat snack brands like Slim Jim and Fatty were a source of strength for Conagra (CAG) last quarter, with sales by volume rising 4% year-over-year.
Food and beverage manufactures say they’re leaning into the trend. JM Smucker (SJM) introduced a high-protein version of its Uncrustables peanut butter-and-jelly sandwich, while Pepsi (PEP) plans to add it to Doritos. General Mills rolled out protein-dense versions of Cheerios, granola, mac and cheese and snack bars. The company even plans to highlight protein content in pet foods, executives said at the investor day.
“I can understand why you’d think it looks like we’re sprinkling protein everywhere,” said Dana McNabb, General Mills’ group president of North American retail and pet, according to a transcript. “I really believe our [research and development] team has a proprietary advantage in how to make protein taste good.”
The shift has buoyed business for Ingredion (INGR), which makes sweeteners, starches and other ingredients. The company is seeing double-digit increases in demand for a protein fortification product, it said last month.
Starbucks (SBUX) has added cold foam with extra protein. Grocer Sprouts Farmers Market (SFM) plans to “assertively” talk up the hundreds of high-protein items it’s adding to the 3,700 it already stocks, CEO Jack Sinclair said this summer.
What’s next? PepsiCo, known for both drinks and snacks is making a play for protein seekers—but also trying to get a head start on the next “it” ingredient, CEO Ramon Laguarta said on a conference call earlier this month.
“We’re launching products with high fiber,” Laguarta said, according to a transcript. “I think fiber will be the next protein.”
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