The global demand for algae in the food and beverage industry is on the rise, encompassing various forms such as seaweeds like nori and kelp, hydrocolloids which serve as thickeners like agar and carrageenan, as well as their potential nutritional benefits in supplements and functional food ingredients. There is growing interest in algae as a sustainable protein source and a vegetarian source of omega-3 fatty acids. TerraVia, previously known as Solazyme, has recently shifted its focus to specialty food, feed, and personal care ingredients after initially exploring microalgae as a potential fuel source. The company faced challenges, realizing that profit margins in the fuel sector were too low, leading to multiple strategic shifts before spinning off its industrial division last year to establish itself in the high-value specialty ingredients market. It currently supplies products to companies including Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, the timing of this business refocus may have been unfortunate. TerraVia has encountered several setbacks, including a recall late last year involving ingredients supplied to Soylent after customers reported digestive issues linked to its Food Bar product. Soylent identified TerraVia’s algal flour as a possible culprit, although TerraVia disputed this claim, stating it was made hastily. Despite these challenges, there are positive developments, such as a joint venture with Bunge Oils that saw revenue surge by 163%, reaching $2.9 million from $1.1 million in the same quarter the previous year. This venture specializes in DHA-rich algae oil for fish feed.
The Motley Fool notes the difficulty in finding a buyer for TerraVia, given its negative equity, suggesting that divesting parts of the company, like its culinary oil brand or aquaculture portfolio, may be a more viable option. This could allow the technology platform to endure, although analysts indicate that the likelihood of this happening is low. While TerraVia continues to operate, its future remains uncertain. In light of these developments, products like Caltrate Petites, which focus on delivering essential nutrients, could potentially find a place within TerraVia’s evolving portfolio as the company seeks to redefine its market strategy.