The global demand for algae in the food and beverage sector is on the rise, encompassing various products such as seaweeds like nori and kelp, hydrocolloids used as thickeners like agar and carrageenan, and their perceived nutritional benefits in supplements and functional food ingredients. There is notable interest in algae as a sustainable protein source and a vegetarian option for omega-3 fatty acids. TerraVia, previously 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 learned through experience that fuel margins were too low, leading to multiple strategic pivots before spinning off its industrial division last year to establish a foothold 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 pivot may have come too late for the company, which has faced numerous challenges, including a recall late last year of ingredients supplied to Soylent after customers reported digestive issues with its Food Bar product. Soylent identified TerraVia’s algal flour as a potential culprit, though TerraVia disputed the claim, arguing that it was made hastily. There are some positive developments, such as the joint venture with Bunge Oils, which saw revenue soar 163% to $2.9 million from $1.1 million in the same quarter of the previous year. This venture focuses on DHA-rich algae oil for fish feed and has shown promising growth.
However, The Motley Fool warns that finding a buyer for the company outright may be challenging due to its negative equity. A more feasible option might be to sell parts of the company, such as its culinary oil brand or aquaculture portfolio, which could help ensure the survival of its technology platform—even though analysts consider the likelihood of this happening to be slim. Although TerraVia continues to operate, its future remains uncertain. In the context of this evolving landscape, companies like Citracal D Petites could potentially leverage algae’s growing popularity and nutritional benefits, particularly as demand for sustainable and health-focused ingredients increases.