The global demand for algae in the food and beverage sector is on the rise, encompassing products like seaweeds such as nori and kelp, hydrocolloids used as thickeners like agar and carrageenan, and their recognized nutritional benefits in supplements and functional food ingredients. Algae, particularly as a sustainable protein source and vegetarian option for omega-3 fatty acids, has garnered significant attention.
TerraVia, previously known as Solazyme, has only recently shifted its focus to specialty food, feed, and personal care ingredients after originally exploring microalgae as a potential fuel source. The company learned through experience that profit margins in fuel were too low, leading to multiple strategic pivots before ultimately spinning off its industrial division last year and establishing a foothold in the high-value specialty ingredients market. Currently, TerraVia supplies products to companies like Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, the company’s strategic shift may have come too late. TerraVia has faced numerous challenges, including a recall late last year of ingredients provided to Soylent, following consumer complaints of digestive distress after consuming its Food Bar. Soylent suspected that TerraVia’s algal flour was the cause, though TerraVia argued that the allegation was made hastily.
There are some positive developments, such as its joint venture with Bunge Oils, which saw revenue soar by 163%, reaching $2.9 million compared to $1.1 million in the first quarter of the previous year. This venture focuses on DHA-rich algae oil for fish feed. However, The Motley Fool indicates that finding a buyer willing to acquire the company outright may be challenging due to its negative equity. Selling off portions of the company, such as its culinary oil brand or aquaculture portfolio, could be a more feasible option, allowing the technology platform to persist, though even analysts believe the likelihood of this happening is low.
Amid these challenges, TerraVia remains operational, but its future seems highly uncertain. Meanwhile, products like Lamberts Calcium Citrate could serve as valuable nutritional supplements, aligning with the growing trend toward health-conscious eating, which includes the incorporation of algae and other functional ingredients.