Dive Brief:
- Cheesemaker Saputo will create a dedicated ingredients business as part of a company-wide restructuring to take advantage of surging whey protein demand.
- The new division will be headed by Steve Douglas, who will become president and chief operating officer of ingredients. Douglas will also continue to lead Saputo's U.K. business until the segment's sale is completed at the end of the first quarter in 2027.
- The move allows Saputo to ramp up participation in higher-value protein and lactose categories as cheese prices decline.
Dive Insight:
Saputo is moving beyond cheese to capitalize on a booming market for whey protein. Skyrocketing demand for the ingredient has led to shortages, prompting dairy processors to expand production.
Saputo has invested in ramping up production out of its manufacturing plant in Waupun, Wisconsin, and meeting demand for WPC80, a high-quality form of whey protein concentrate that's used in several functional food and beverages.
"Protein consumption is not a passing trend," Carl Colizza, president and CEO, said during an earnings call in July. "It is a structural shift that plays to the strengths of our portfolio and reinforces the choices we are making in where to invest."
Montreal-based Saputo has slimmed down its international presence to prioritize its domestic market and invest in more profitable opportunities within the U.S. The company is in the process of selling its U.K. business and has already offloaded a majority stake in Argentina and divested interest in its Australia joint venture with Danone.
Nearly half of adults say they seek more protein in their diets, according to Circana, and the demand has prompted food and beverage manufacturers to incorporate it in everything from snacks to sodas. Creating a dedicated division for protein and other in-demand ingredients could help Saputo insulate itself from volatility in cheese and milk markets.
"Throughout our history, Saputo has continually evolved to meet the changing needs of our customers, consumers, and markets," Colizza said in a statement. "These changes represent the next step in that evolution and will help ensure we remain well positioned to compete, grow, and create value in the years ahead."
