Protein craze boosts dairy M&A activity
Tempo de leitura
5 min read
Originally published in The AgriBiz, this article analyzes how the growing demand for protein is driving M&A activity in the dairy sector and features insights from Carolina Reis, Associate Partner at igc Partners, on consolidation opportunities in the market.
A wave of mergers and acquisitions has swept through the dairy sector over the past year.
Well-known consumer brands—such as Piracanjuba, Tirolez, and Italac—have been on a shopping spree, in a move that combines the pursuit of a larger presence in high-demand, higher-value-added segments with regional diversification. But why now?
Part of the explanation can be attributed to the recent protein craze. Consumers' insatiable appetite for protein-rich foods has put whey—a byproduct of cheese manufacturing—in the spotlight for both local and international investors.
“Whey is increasingly becoming an important revenue stream for the dairy industry that produces cheese,” says Valter Galan, a partner at MilkPoint, one of the leading consultancies for the dairy sector in Brazil.
Data compiled by MilkPoint illustrates the growing relevance of this byproduct. In July, the price of whey powder was R$ 9.54 per kilogram, an increase of nearly 35% compared to the same month the previous year.
The demand for this byproduct has been driving M&A activity even outside of Brazil. In January, the Dutch multinational cooperative Royal FrieslandCampina acquired the American company Wisconsin Whey Protein—which is focused precisely on this market.
“Today, 71% of consumers are actively prioritizing protein intake, a notable increase from 59% in 2022 and 67% in 2023,” FrieslandCampina stated. According to the company, the whey protein market is expected to grow at a rate of 6.6% per year through 2030.
The fact that whey has become something of a cash cow is helping to draw attention to the cheese sector in Brazil, providing recent support to other structural factors that make this market attractive in the country.
According to data from Abiq (Brazilian Cheese Industry Association), per capita consumption is at seven kilograms per year—still well below nations like Argentina, which consumes about 12 kilograms per year, and also lower than European countries like Greece and France.
Beyond a growth path in volume, the cheese market also offers room for diversification. More than a third of Brazilian consumption consists of commodity cheeses, such as mozzarella, which delivers an EBITDA margin in the 4% to 6% range, according to MilkPoint.
Fine cheeses tend to have higher margins—and they spark interest. The acquisition of the Minas Gerais-based Básel Lácteos by Piracanjuba in January of this year is an example of this trend, which extends beyond national borders, according to Carolina Reis, an associate partner at IGC, an M&A boutique.
“Especially for foreign investors who aren't here yet, specialty cheeses—burrata, gruyère, provolone, etc.—have been catching their eye,” she says.
One factor that could stimulate this demand is the income elasticity of consumption (the more wages improve, the more cheese consumption tends to increase).
Another point is the search for healthiness combined with protein intake, since cheese provides protein and calcium right off the bat. “There is even a question of new occasions for people to consume cheese as snacks,” adds Reis.
At the same time that consumers remain eager for protein-rich foods, inside the farm gate, the fragmentation of the dairy sector in Brazil provides additional support for mergers and acquisitions.
"There are many regional players. The top five don't even account for 50% of milk collection. It's this long tail that fuels mergers and acquisitions," summarizes Reis.
Through M&As, companies can access other milk basins—that is, hubs in different producing regions. "When a large company buys a regional one, it usually keeps the procurement team; very little changes in that relationship," says Galan.
The Southeast and South are home to the country's largest milk basins, but the Northeast has been gaining prominence with accelerated growth in dairy production over the last few years—which has caught the attention of outside companies.
Between 2014 and 2024 (the most recent edition of the PPM, IBGE's monthly livestock survey), the Northeast was the only region that actually saw growth in milk production in Brazil.
The region saw a 65% increase during this period, reaching 6.4 billion liters. The country as a whole remained practically stable during this time (1.7% growth), with a production of 35 billion liters.
According to Galan, from MilkPoint, this progress comes from overcoming more challenging production conditions, with increased grain production in the Matopiba region and the integration of irrigation systems and compost barns (a type of housing for dairy cattle).
Investment in the region is also driven by demand. "The Northeast is, perhaps after the Southeast, the main consumer market for dairy in Brazil. And it has a large production deficit," states Galan.
To give an idea of the scale of the deficit, in 2025 alone, milk production in the Northeast grew 14% compared to the previous year, with increases in virtually every state in the region. Even so, the trade deficit grew by more than 10% in the same period, as shown in a study conducted by researcher Kamilla Ribas Soares for the Bank of the Northeast.
"We have been hearing from buyers interested in entering the region to diversify their cooperative base and gain better bargaining power with clients. If you add new products, you ultimately also achieve a stronger presence on the shelf," says Reis.
