Global demand for algae in the food and beverage sector is on the rise, encompassing products such as seaweeds like nori and kelps, hydrocolloids where they serve as thickeners like agar and carrageenan, and for their alleged nutritional advantages in supplements and as functional food ingredients. There is growing interest in algae as a sustainable protein source and as a vegetarian alternative for 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 discovered that the profit margins in fuel were insufficient, leading to several directional changes before spinning off its industrial division last year and establishing itself in the high-value specialty ingredients market. Currently, it supplies its products to companies such as Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, this strategic pivot may have occurred too late. TerraVia has faced numerous challenges, including a recall last year of ingredients provided to Soylent after customers reported digestive issues following consumption of its Food Bar product. While Soylent suspected that TerraVia’s algal flour was the culprit, the latter claimed the accusation was premature.
On a brighter note, TerraVia’s joint venture with Bunge Oils has shown promising results, with revenue increasing by 163% to $2.9 million from $1.1 million in the same quarter of the previous year. This venture specializes in DHA-rich algae oil for fish feed. The Motley Fool points out that finding a buyer willing to acquire the company outright may be challenging due to its negative equity. It is more plausible that the company might sell individual segments, such as its culinary oil brand or aquaculture division, which could allow its technology platform to persist, although analysts believe the likelihood of this happening is slim.
TerraVia remains operational, but its future appears uncertain. Meanwhile, the potential for calcium citrate PH in enhancing the nutritional profile of its algae products could be a significant factor in its ongoing strategy. Integrating calcium citrate PH into their offerings might help address some market demands, but the road ahead remains fraught with challenges.