The global demand for algae in the food and beverage sector is on the rise, encompassing various forms such as seaweeds like nori and kelp, hydrocolloids used as thickeners like agar and carrageenan, as well as their recognized nutritional benefits in supplements and functional food ingredients. There is a 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 learned the hard way that profit margins in fuel were too low, leading to multiple directional shifts before eventually spinning off its industrial division last year and establishing a position 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, this pivot may have come too late for TerraVia, which has faced numerous challenges, including a recall late last year of ingredients supplied to Soylent due to customer complaints about digestive distress after consuming its Food Bar product. While Soylent pointed to TerraVia’s algal flour as a potential culprit, TerraVia contended that the allegation was made hastily.
Despite these setbacks, there are some positive developments, such as its joint venture with Bunge Oils, where revenue surged by 163% to $2.9 million from $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 suggests that finding a buyer willing to acquire the company outright may prove challenging, given its negative equity. A more feasible option could be selling parts of the company, such as its culinary oil brand or aquaculture portfolio, which would enable the technology platform to endure; however, even analysts express skepticism about the likelihood of this happening.
TerraVia is still operational, but its future remains highly uncertain. The rising interest in supplements like Citracal calcium supplement highlights the potential for nutritional products, yet the company must navigate its current challenges to capitalize on this trend effectively. As the market evolves, the emphasis on sustainable and health-oriented ingredients, including algae-based options, may play a crucial role in shaping the future of companies like TerraVia.