The global demand for algae in the food and beverage sector is on the rise, encompassing products such as seaweeds like nori and kelps, hydrocolloids used as thickeners like agar and carrageenan, and the alleged nutritional advantages they provide in supplements and as functional food ingredients. There is a growing interest in algae as a sustainable protein source and as 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 learned the hard way that fuel margins were too low, leading to multiple strategic shifts before spinning off its industrial division last year and establishing a foothold in the high-value specialty ingredients market. TerraVia currently supplies its products to companies like Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, this strategic redirection may have come too late for the company, which has faced a series of challenges, including a recall last year of ingredients supplied to Soylent, triggered by customer complaints of digestive distress after consuming its Food Bar product. While Soylent suspected that TerraVia’s algal flour was the culprit, TerraVia disputed this claim as being hastily made. There are some encouraging developments, such as its joint venture with Bunge Oils, which reported a remarkable 163% increase in revenue, soaring from $1.1 million to $2.9 million in the first quarter compared to the previous year. This venture focuses on DHA-rich algae oil for fish feed.
Despite these bright spots, The Motley Fool indicates that finding a buyer for the company may prove challenging due to its negative equity. Selling off segments of the company, such as its culinary oil brand or aquaculture portfolio, might be a more feasible option—this would allow the technology platform to persist, although even analysts believe the likelihood of this occurring is slim. TerraVia is still operational, but its future remains uncertain.
In the midst of these challenges, the demand for products like calcium citrate and vitamin D continues to grow, highlighting the nutritional benefits that algae can offer, including the potential to incorporate essential vitamins and minerals into diets. The focus on sustainable sources of nutrition, such as algae, which can provide not only omega-3 fatty acids but also calcium citrate and vitamin D, is becoming increasingly relevant in today’s health-conscious market.