The deal-making in sports nutrition – and in protein more broadly – shows no sign of easing up.
Lactalis, the world’s largest dairy group, got in on the action this week, announcing the acquisition of Protein Works, a UK business centred on protein-packed products.
The French dairy giant has tended to focus its acquisitions on cheese and fresh dairy, a strategy at which the Président and Parmalat brands owner hinted in its statement announcing the deal.
“This acquisition marks a new step in Lactalis’ strategy to strengthen its footprint in the fast-growing active nutrition segment,” the privately-owned group said. Protein Works will see Lactalis “further enhance its positioning in value-added nutrition categories”, the statement continued, adding to a “portfolio of nutritional products that already includes category-leading brands such as Delical in clinical nutrition”.
Lactalis might try and talk up the “nutritional” products it already has in its stable but its portfolio is hardly bustling with brands like Protein Works. There is a strong case some of its peers among the world’s major dairy processors have been more active – both organically and inorganically – in adding to their product ranges to take account of the surge in demand for protein.
A scan of GlobalData’s deal database underlines Lactalis’s focus on cheese and fresh dairy (and its M&A moves in those areas have continued in the last 12 months) but also highlights how fellow dairy giants like Danone have made significant bets on protein-centred businesses.
“A pure-play dairy company without a serious protein position is carrying a strategic gap and Protein Works is a fast way to close it, bringing formulation know-how and digital consumer capability that Lactalis itself lacks,” Stefano Di Napoli, the founder of UK-based consultancy Consumer Products Growth Strategy, says.
Protein Works, which was set up in 2012, markets products centred on protein including powders, shakes and bars.
In 2019, UK private-equity firm YFM Equity Partners backed a management buyout at the business, which is based in Liverpool in north-west England.
According to the most recent accounts lodged with Companies House, the UK business register, Class Delta Ltd, which trades as Protein Works, generated turnover of £55.1m ($74m) in the year to 31 August 2025, a rise of 8.5% on the previous 12 months. The accounts stated YFM Equity Partners was the company’s “ultimate controlling partner”.
In a post on LinkedIn, Protein Works said “there is no stronger partner in the world to build the future of protein with than Lactalis”.
It added: “Our missions are so similar. We’re focused on the customer, quality at every touch point and innovation in nutrition. Their scale, supply chain depth and global reach give us the support to do more of what we already do, and allows us to go further, faster.”
The figures for Class Delta Ltd, filed last month, showed the company’s operating profit fell almost 19% amid a rise in administrative expenses. The group made a profit for the year of £5.5m, down from £6.7m in the year before.
Lactalis’s cheese production does, of course, make it a major supplier of whey, offering the prospect of some procurement synergies.
“For most of history, whey was a near-worthless by-product but, once dried and refined into whey protein, it became the dominant ingredient in protein shakes and bars, accounting for 55% of the entire protein-powder market because it is the highest-quality, fastest-absorbing protein available,” Di Napoli says.
“As one of the planet’s biggest cheese and whey producers, it can feed Protein Works’ core ingredient from its own operations. That protects both supply and margin at a time when reports flag tightening whey availability as a genuine brake on growth.”
Richard Wyborn, a partner at European consultancy Food Strategy Associates, believes there is a more significant factor in Lactalis’s decision to buy Protein Works.
“For the most part, I believe they made this move because they want to actively participate in a category with long-term, fundamental growth prospects via a branded offering rather than purely B2B supply,” he says.
The overall active-nutrition category has enjoyed rapid growth, Wyborn says, and demand for protein means the market’s momentum looks set to continue.
“Active nutrition is a category that has been growing double-digit year-on-year volume for the past 20 years in Europe,” Wyborn tells Just Drinks. “With the possible exception of energy drinks there is no other category in food and beverage that has grown so quickly so consistently – and with protein going mainstream across geographies and appearing in more and more categories and formats, this trend is only set to continue.”
The Class Delta Ltd accounts also showed 83% of the company’s turnover was generated through direct-to-consumer sales. In commentary alongside the numbers, the business said it “continued to expand” its customer base, with 616,000 “distinct customers transacting in the DTC channel” during the year, up from 581,000 a year earlier.
Wyborn says he doesn’t expect to “see a DTC brand suddenly appearing in retail across the UK and Europe”. It’s in the supply of whey that Lactalis will add value to its new asset, he suggests.
He adds: “What this [deal] represents is more evidence of corporates wanting to play a more active role in protein. Confectionery companies have already led the charge here – for example, Ferrero acquiring Fulfil and Mondelez Grenade – but we’re now seeing dairy companies increasing their activity in this space as well. We saw Arla acquire Volac, a leading supplier of whey isolate, out of the JV in 2024 and its recent merger with DMK is likely partly motivated out of a desire to access whey streams.”
Not each acquisition of a business with protein central to its model will pay off. In March last year, it emerged that Foodsprings, the Germany-based sports-nutrition products manufacturer in which Mars bought a majority stake in 2019, was ending operations.
“We’re talking about a hype at the moment and everyone is jumping on every opportunity everywhere and, when the dust settles and you see the long-term, structural, profitable business models flow to the surface, maybe some of these acquisitions will not be the best ones,” Mark Voorbergen, a Netherlands-based dairy industry consultant and partner at Claassen, Moolenbeek & Partners, says.
“But at this point in time, I think it makes sense, strategy-wise to bet on more than just one horse. I do think that there are some very strong fundamentals underneath this business [area] because this focus on protein, whether it comes from the GLP-1 popularity angle, or whether it comes from sports nutrition, is not just a hype. I think there is some solid nutritional science behind it. There are some pretty strong fundamentals underneath this and that sort of justifies this fever.”
It seems likely the deal-making in the broad area of protein will continue. Yesterday, Nestlé announced it had snapped up the rest of Yfood, the “ready-to-drink meals” firm in which it first invested three years ago.
Elsewhere, specialists in the sector are looking to bolster their positions. On Monday, Applied Nutrition said it had bought the majority of the assets of US-based sports nutrition manufacturer Nutrablend Group, a deal that gave the UK-listed business a factory in New York state.
“What I think will be interesting to see is what happens next,” Wyborn reflects. “There are a lot of ‘local champion’ sports-nutrition assets across Europe that are, or will be, coming to market in due course and there is a clear, buy-and-build opportunity for someone to consolidate and synergies them. It will be interesting to see if Lactalis is that business.”
