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 their alleged nutritional benefits in supplements and functional food ingredients. There is a notable interest in algae as a sustainable protein source and a vegetarian source of omega-3 fatty acids. TerraVia, formerly known as Solazyme, has recently shifted its focus to specialty food, feed, and personal care ingredients after originally exploring microalgae as a fuel source. The company learned through experience that the profit margins in fuel were insufficient, leading to several directional changes before eventually spinning off its industrial division last year and establishing a niche 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, the timing of its business refocus may have been too late. The company has faced numerous challenges, including a recall late last year of ingredients supplied to Soylent, following customer complaints of digestive distress after consuming its Food Bar product. Soylent suspected that TerraVia’s algal flour was the culprit, although TerraVia refuted this claim as hasty.
Despite these issues, there are some positive developments, such as a joint venture with Bunge Oils, where revenue surged by 163% to $2.9 million from $1.1 million in the first quarter of the previous year. This venture concentrates on DHA-rich algae oil for fish feed. The Motley Fool notes that finding a buyer willing to acquire the company outright may be challenging due to its negative equity. It might be more feasible to sell parts of the company, such as its culinary oil brand or aquaculture portfolio, which could allow the technology platform to endure; however, even analysts suggest that the odds of this happening are slim. TerraVia is still operational, but its future remains uncertain.
In this evolving landscape, the integration of health supplements like calcium citrate, vitamin D3, magnesium hydroxide, and zinc sulfate tablets could provide additional avenues for growth. The potential to incorporate such beneficial supplements into algae-based products might enhance their nutritional profile and consumer appeal. As TerraVia navigates its challenges, these innovative health solutions could play a crucial role in shaping its future and revitalizing its product offerings.