The supply chain has been greatly affected since the emergence of COVID. Commodities were originally impacted by a rolling economic shut down, but as of late, it has snowballed into a dynamic scenario that continues to impact exporters and importers alike.
Specifically, the supply and demand associated with Whey Protein Concentrate and Whey Protein Isolate were originally impacted by the lack of demand for food service cheese. This was related mainly to restaurants and sporting events being forced to shut their doors worldwide. With a lower demand for cheese, a lesser amount of whey solids was available to produce whey protein. And to add insult to injury, consumption of sports supplements, which weighs the heaviest on whey protein, increased at the same time China's demand for sweet whey powder increased. With international manufacturers struggling to catch up and to keep up with demand, the cost of whey protein continues to increase, but has increased most significantly over the last 9 months, with pricing almost doubling in that amount of time.
Other international factors are wreaking havoc on commodities, affecting all industries, including sports nutrition. With the emergence of COVID and a rolling economic shut down, the flow of goods was greatly affected, causing unseen congestion in global ports. Essentially, with stay at home orders, laborers required to efficiently operate ports worldwide were mandated to stay at home, leaving only essential laborers to report to work. In light of this, critical ports such as Shanghai and Long Beach (among many others) started stockpiling containers. Ports worldwide are trying to catch up, but with an extremely high demand for space on shipping vessels, the cost of shipping goods continues to increase significantly. The cost of ocean freight has increased 10x compared to the pre-COVID cost.
And just recently, the cost to manufacture goods has drastically increased, directly related to the current energy crisis. In late summer, some international countries hit Australia with economic sanctions. Coal is a primary energy source for many international countries, and Australia is their primary partner. Historically, Australia has supplied around 55% of these countries' annual coal imports. With this lack of coal, these countries' have implemented blackout periods, which is greatly affecting the industrial sector as output is limited. This is a significant issue not only for sports supplements, as the majority of amino acids and high intensity sweeteners are produced internationally, but also greatly affects other commodities that these international countries produce for export.
We hope this helps to provide you with the context needed to alleviate some misconceptions and rumours about pricing in the sports nutrition market.