The firm, which primarily supplies the French market, says the distribution deal for US-based Protient's soy isolate would allow customers to replace some or all of the caseinate in their products with a cheaper protein source.
Caseinates are typically used in dietetic foods like infant formula, sports products and slimming foods to provide a source of protein although they also function as emulsifiers, water binders and whipping aids. They currently cost around €6.50 per kg compared to only €3.50-€5kg for soy protein isolates offering the same amount of protein.
Dutch firm Arla Foods Ingredients has also developed an alternative to caseinates - although still derived from dairy protein - for use in salami formulations.
Patrick Laurans, area sales manager at Armor Proteines, told NutraIngredients.com: "Until now the casein industry has been subsidized by Europe. But we lost more than €1.50 per kg in one year, which is a huge drop. By the end of the year, there may be nothing left."
He noted however that the price of milk, the firm's key raw material, is also expected to drop based on changes to CAP that will see farmers receiving subsidies directly.
"I think the caseinate prices can't go too much higher, otherwise we are going to start being substituted by other proteins," added Laurans.
Laurans noted that despite the pressure from alternative, and often cheaper, protein sources, the firm's core business will remain in dairy proteins.
"We're not going to set up a company to promote soya now. But there is a trend among dairy companies for expansion, as demonstrated by Glanbia and Kerry," he said.
Glanbia has recently signed a distribution with US firm Nurture to distribute its OatVantage ingredient, in addition to the new vitamins and minerals gained through the acquisition of Germany's Kortus.
Armor's new soy protein isolates, suitable for dry mixes or liquid drinks, are GMO-free and said to have a neutral taste.