The global demand for algae in the food and beverage sector is on the rise, encompassing products such as seaweeds like nori and kelp, hydrocolloids used as thickeners like agar and carrageenan, and their alleged nutritional advantages 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, formerly known as Solazyme, recently shifted its focus to specialty food, feed, and personal care ingredients after initially exploring microalgae as a potential fuel source. The company realized the low margins in fuel were unsustainable and underwent several strategic shifts before spinning off its industrial division last year to establish itself 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, the timing of this refocus may have been too late. TerraVia has faced numerous challenges, including a recall late last year involving ingredients supplied to Soylent, following customer complaints about digestive issues after consuming its Food Bar product. Soylent pointed to TerraVia’s algal flour as a possible cause, although TerraVia contested this claim as being premature.
Despite these setbacks, there are some positive developments, notably its joint venture with Bunge Oils, which saw revenue grow by 163%, reaching $2.9 million compared to $1.1 million in the same quarter of the previous year. This venture concentrates 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, given its negative equity. A more plausible scenario might involve selling parts of the business, such as its culinary oil brand or aquaculture portfolio, to ensure the survival of the technology platform. However, analysts suggest that even this outcome is unlikely.
Amidst these challenges, TerraVia remains operational, but its future is uncertain. In discussions about nutritional supplements, an interesting comparison arises between tricalcium phosphate vs calcium citrate as potential additives, illustrating the broader context of alternative sources of nutrition. This comparison also highlights the ongoing conversations about the best ingredients to enhance dietary supplements and functional foods, including those derived from algae. As TerraVia navigates its next steps, the relevance of such discussions in the specialty ingredients market continues to grow.