Dairy producer Saputo plans to ramp up North American manufacturing to meet protein demand

Montreal-based dairy producer Saputo Inc. SAP-T is attempting to seize the “protein-maxxing” trend, with plans to invest in expanding its manufacturing in Canada and the U.S.

The dairy giant is in the right place to capitalize on consumer demand for high-protein foods, chief executive officer Carl Colizza said in a call Friday morning to discuss the company’s first-quarter results.

Saputo sold its 80-per-cent stake in dairy operations in Argentina for $710-million ($612-million after tax) during the first quarter, and plans to allocate capital to the processing of concentrated whey, cottage cheese and high-protein ready-to-drink products. The company is also stepping up investments in research and development in high-protein ingredients, and is improving efficiencies across operations in Canada and the U.S.

Mr. Colizza flagged upcoming announcements for Canadian investments in cultured products, a category that includes yogurts, kefir, and sour cream.

“This is a structural change,” Mr. Colizza said of consumer demand for protein, a hotly discussed topic on social media, where high intake is referred to as protein-maxxing. “It’s not a trend, and so we feel comfortable about continuing to invest our talent, time and our dollars behind the innovation.”

The company reported its first-quarter financial results on Thursday after markets closed. Revenues grew to $4.4-billion, up 1.5 per cent compared to the same period last year.

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The results were driven by higher market prices for dairy ingredients, such as whey, and volume growth of high-protein ingredients. Prices for high-protein whey have climbed 162 per cent since the start of 2025, according to the United States Department of Agriculture.

Increased selling prices, which have been implemented to mitigate inflationary pressures, also contributed to the results, according to the company.

Consumer demand for protein has manifested in a range of new products hitting shelves. The number of high-protein shakes and drinks on the market rose by 122 per cent between 2020 and 2024, according to a report from Innova Market Insights.

Processors have been largely unable to keep up with protein demand. American suppliers of whey are sold out of stocks for the remainder of the year, according to USDA reports.

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But should Saputo hope to milk the protein moment, it will need to contend with challenging dynamics between whey and cheese, Mr. Colizza said.

That’s because demand for more whey could affect cheese prices. Whey is a byproduct in the manufacturing of cheese. It is expensive to manufacture more cheese for the purposes of meeting protein demand, Mr. Colizza said. Should whey drive more cheese production, the resulting supply-demand dynamics could put downward pressure on the cheese category, where Saputo is already contending with low prices.

Low commodity pricing in cheese and butter was the main factor behind a slight decrease in Saputo’s U.S. business in the first quarter. The company’s U.S. revenues were $2.1-billion, down one per cent compared to the same quarter last year. The declines were mitigated by high protein ingredient prices, executives said.

“The barrier to incremental protein is going to be cheese making and/or cheese demand. But those are dynamics that we’re going to learn to live with for some time,” Mr. Colizza said.

Accounting for the sale of the Argentinian dairy business, adjusted earnings from continuing operations were $199-million, or $0.49 per share, compared to $176-million, or $0.42 per share during the same period last year. This beat analysts’ expectations of $181.5-millon in adjusted earnings or $0.45 per share, according to average estimates compiled by S&P Capital IQ.