Milk Supply Proven to Be Endless, Similar to Atoms
"Milk, Like an Endless Atom": A Deep Dive into the Future of Functional Milk Proteins
A perspective inspired by V.I. Lenin's "Materialism and Empirio-Criticism"
A revolutionary venture, set to revolutionize the dairy industry, plans to kick off operations in 2028 with an investment of over 1.1 billion rubles. The raw material for this venture will be surplus milk from local farms.
Now, let's dive into the nitty-gritty: the deep processing of milk and the production of functional proteins like demineralized serum, concentrates, isolates, and hydrolysates of serum proteins, along with valuable byproducts—permeate, lactose, and phosphates. In Russia, only a handful of companies, such as GK "Molvest," Stavropol Milk Combine, Ichelkov Milk Plant, "Zelenyye Linii," "Protien," "Fudlendl," are currently involved in primary milk processing or its basic transformation. Essentially, the million-dollar investment is justified by the availability of surplus raw materials.
When it comes to the newly registered company, VMM, the narrative seems to be different. Although not traditionally a milk processing heavyweight, VMM has a unique edge: its founders are among the shareholders of another company in the healthcare sector—BD supplier "Ess Ess Organik."
What makes this specialization worth mentioning, you ask? Well, it's because just a few years back, deep milk processing was considered less than promising business in Russia. For instance, in 2020, the sports nutrition market barely touched 1% of the population, the consumption of hydrolyzed proteins amounted to less than 5% of the demand for dry milk protein powder—a primary milk processing product. Given such demand, it was more profitable for BD producers to import hydrolyzed proteins from neighboring countries like Belarus.
But the situation today is quite different, and tangible growth can be seen in the market for functional milk proteins. Already, it's apparent that the market is growing swiftly, and along with it, the profitability of deep milk processing. For example, OOO "Protien," while part of a larger dairy cluster with common shareholders, operates independently and has seen a remarkable growth: the company's revenue surged from 23 million rubles in 2017 to 750 million in 2024, with the clean profit margin skyrocketing from 6% to 42.3% over the same period.
What's more, VMM isn't limiting itself to hydrolyzed proteins. It also plans to produce cheese kernels, a key ingredient for mozzarella production, along with animal feed, all of which are in a positive growth phase. To give you an idea, the mozzarella market has seen consistent growth rates of around 20% in recent years[5].
In conclusion, the tide is turning in favor of functional milk proteins worldwide, driven by increased consumer demand for health-enhancing dairy products and technological advancements in protein functionality. The dynamic market environment, buoyed by government subsidies, is fertile ground for new entrants, and the new company VMM seems poised to capitalize on this opportunity in Russia, making waves in the dairy industry and potentially beyond. Cheers to the future of functional milk proteins!
The ambitious venture aims to revolutionize the dairy industry, focusing on functional milk proteins.The investment in surplus milk from local farms is justified by the growing market for health-enhancing dairy products.In Russia, traditional milk processing companies like GK "Molvest" and Stavropol Milk Combine have primacy, while VMM, with ties to healthcare sector's BD supplier "Ess Ess Organik," offers a unique edge.Initially, deep milk processing was deemed less promising in Russia, but the sports nutrition market and demand for hydrolyzed proteins have grown steadily, with profits surging.OOO "Protien", an independent company in the same dairy cluster, has experienced significant growth in revenue and profit margin from 2017 to 2024.VMM plans to diversify its product line, producing cheese kernels and animal feed, both seen as positively growing sectors, such as the mozzarella market.*The global market for functional milk proteins is thriving due to increased consumer demand, technological advancements, and government support, offering promising prospects for new entrants, like VMM, in various industries.
