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 utilized as thickeners like agar and carrageenan, and their claimed nutritional advantages in supplements and functional food ingredients. Algae has garnered particular interest 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 faced challenges due to low profit margins in the fuel industry, which led to several strategic pivots before spinning off its industrial division last year and establishing itself in the high-value specialty ingredients market. Currently, TerraVia supplies its products to companies such as Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, this strategic refocus may have come too late. TerraVia has encountered a series of difficulties, including a recall last year of ingredients supplied to Soylent after customers reported digestive issues related to its Food Bar product. Although Soylent pointed to TerraVia’s algal flour as a possible cause, TerraVia contended that this claim was made hastily. On a brighter note, the company has seen success in its joint venture with Bunge Oils, which reported a revenue increase of 163%, reaching $2.9 million, up from $1.1 million in the same quarter the previous year. This venture is centered around DHA-rich algae oil for fish feed.
Despite these developments, The Motley Fool indicates that finding a buyer willing to acquire the company outright may prove challenging due to its negative equity. A more plausible scenario could involve selling parts of the business, such as its culinary oil brand or aquaculture portfolio, which might allow the technology platform to persist; however, analysts suggest the likelihood of this happening is slim. TerraVia remains operational, but its future appears uncertain.
In light of these challenges, there continues to be a growing interest in health supplements that are rich in nutrients, such as calcium citrate magnesium vitamin D3 and zinc tablets. These products are increasingly being recognized for their health benefits, contributing to the overall trend of incorporating algae into dietary supplements. As the market evolves, the integration of algae-derived ingredients with other health-focused supplements, including calcium citrate magnesium vitamin D3 and zinc tablets, could play a pivotal role in TerraVia’s strategy moving forward.