SHADY SUBSTITUTES
LOSS LEADER STRATEGY
“ The total production cost for whey protein is about double that of a standard product . This means that profit is halved , and that protein spiking is a convenient , albeit totally dishonest way of making some of that margin back .”
SHADY SUBSTITUTES
Companies that choose to engage in this practice don ' t spike their protein with either BCAAs or Leucine but with the cheapest amino acids they can find , which cost about ¼ as much as whey . They also count them as " protein " when they declare the nutritional facts on the side of the tub , which is legal in the United States , because the FDA – our Food and Drug Administration – counts the total amount of nitrogen , plugged into a formula , to be the determinant of how much protein the product contains .
I ' m not sure if the same kinds of laws apply in South Africa , but if you ' re getting your product from a company based in the United States , it may be worth your while to do some research . When I last checked , about 30 lawsuits had been filed against companies of all sizes , from ones you ' ve probably never heard of , to ones you probably see sponsoring some of the biggest names in sports . So , because of a loophole in labelling laws , companies can put these cheap amino acids in their product and call it whey ( sort of ). Fortunately , because of our consumer protection laws , these dirtbags have found themselves defending enormous class action lawsuits ( Google is your friend here , if you ' re looking for the companies that have gotten caught so far ). If a company will rip you off behind the scenes by exploiting a labelling loophole , they ' re not the kind of company you want to support – even if they clean up their act and get their labels right in the future .
Although I think the companies doing this are total dirtbags , I can almost understand where they ' re coming from . Whey protein keeps getting more expensive and , as a result , it ' s becoming nearly impossible for the medium to large companies to make a profit from selling it . This is because in the U . S . the going rate that distributors are paying for a tub of protein is about 40 % less than wholesale . And wholesale is roughly 40 % off retail . So if you ' re doing the quick math , an American supplement that has a manufacturer ' s suggested retail price of $ 40 , is easily hitting the distributor for less than $ 25 .
Obviously margins will be different for everyone , but that ' s a good look at a typical margin for retailers and wholesalers . In this case , our hypothetical product is probably being manufactured for under $ 10 , which includes everything from the label and the bottle , to the actual ingredients , plus the fees for the product to be put into the bottle and the labels applied ; unless that product is whey protein . The total production cost for whey protein is about double that of a standard product . This means that profit is halved , and that protein spiking is a convenient , albeit totally dishonest way of making some of that margin back .
Whey protein also can ' t be synthesised cheaply – it has to come from milk , which must come from an animal . This puts serious constraints on the amount of whey protein that exists at any given time in the world . In short , it is a commodity that exists in limited supply , but does not generate a profit margin commensurate with its relatively low supply and high demand . And as you may have noticed from your supplement cupboard , protein powder takes up a lot of space . Manufacturers will need to have it delivered on a couple of 18-wheelers , if not a fleet of them ( for the big companies ). So your delivery costs more , as does shipping because it not only takes up more space but it also weighs more than anything else a supplement company would sell . Plus , if you are paying to store it , or a fulfillment company handles it , again , you ' re going to be charged more .
“ IT ’ S LIKE BUYING A HOUSE , BUT INSTEAD , THE SELLER JUST
GIVES YOU A PILE OF BRICKS ”
LOSS LEADER STRATEGY
Sometimes companies will use their protein powder as a loss leader – a product that breaks even or is even sold at a loss , with the hopes of selling additional items to the same customer . So , if I sell you a loss leader and lose money , I ' m hoping you stick around to buy something else that I sell , where I ' ll make up that amount , plus more . Hopefully this instills a degree of brand loyalty , and gives the company a chance to recover the money from their loss leader .
Common wisdom in the supplement industry is that a whey protein is the last item a company should make , and then only to round out an already successful line of other products . Typically it ' s done when a company has developed a following and some brand loyalty , and by not having their own protein powder , they ' re leaving money on the table when their customers are forced to purchase another brand for that staple .
When the cost of goods sold is high and made even higher by things like shipping and storage , and there exists an exploitable loophole where ( dishonest ) companies can look to make their money back , you ' re going to see spiked protein . Companies who have been caught doing this are easily found online , so that ' s exactly where I suggest you go to educate yourself so that you don ' t get ripped off . M . E
“ When the cost of goods sold is high and made even higher by things like shipping and storage , you ’ re going to see spiked protein .”
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