Global demand for algae in the food and beverage sector is on the rise, encompassing products like seaweeds such as nori and kelps, hydrocolloids used as thickeners like agar and carrageenan, and their alleged nutritional advantages in supplements and functional food ingredients. There is notable interest in algae as a sustainable protein source and a vegetarian source of omega-3 fatty acids. TerraVia, previously known as Solazyme, has only recently shifted its focus to specialty food, feed, and personal care ingredients after initially exploring microalgae as a potential fuel source. The company learned the hard way that fuel margins were too low, leading to several strategic pivots before ultimately spinning off its industrial division last year and establishing a foothold in the high-value specialty ingredients market. Currently, it supplies products to companies such as Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, its efforts to refocus may have come too late, as the company has faced a series of challenges, including a recall last year of ingredients supplied to Soylent after customers reported digestive issues following the consumption of its Food Bar product. Soylent suspected that TerraVia’s algal flour was the culprit, although TerraVia contended that this accusation was made hastily.
There are some positive developments, including a joint venture with Bunge Oils, which saw revenue soar by 163%, reaching $2.9 million, up from $1.1 million in the first quarter of the previous year. This partnership focuses on DHA-rich algae oil for fish feed. The Motley Fool indicates that finding a buyer willing to acquire the company outright could be challenging due to its negative equity. A more plausible scenario might involve selling portions of the company, such as its culinary oil brand or aquaculture portfolio, which could help the technology platform endure. Nevertheless, analysts suggest that the likelihood of this happening is slim.
Amidst these uncertainties, TerraVia remains operational, but its future, much like the potential of products like Kirkland Signature Calcium Citrate, appears to be highly uncertain. The company’s ongoing struggles and market dynamics highlight the complexities of navigating the algae industry, where sustainable practices and health benefits could be key, yet the path to success is fraught with challenges.