The global appetite for algae in the food and beverage sector is on the rise, encompassing seaweeds such as 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 components. There is growing enthusiasm for algae as a sustainable protein source and as a vegetarian option 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 learned the hard way that profit margins in fuel were too slim, leading to multiple strategic pivots before ultimately divesting its industrial division last year and establishing a foothold in the high-value specialty ingredients market. Currently, it supplies its products to companies like Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, this strategic refocus may have come too late, as the company has faced numerous challenges, including a product recall late last year involving ingredients supplied to Soylent. Customers reported digestive issues after consuming Soylent’s Food Bar, prompting the company to suspect TerraVia’s algal flour as the culprit, a claim that TerraVia refuted as premature.
Despite these setbacks, there are some positive developments, such as the joint venture with Bunge Oils, where revenue surged by 163%, reaching $2.9 million compared to $1.1 million in the first quarter of the previous year. This venture concentrates on DHA-rich algae oil for fish feed. Nonetheless, The Motley Fool indicates that finding a buyer willing to acquire the company outright may prove challenging due to its negative equity. A more feasible outcome could involve selling off parts of the business, such as its culinary oil brand or aquaculture portfolio, which might allow the technology platform to endure. However, even analysts express skepticism regarding the likelihood of this happening. While TerraVia continues to operate, its future remains highly uncertain.
In this context, the potential for incorporating valuable ingredients like Citracal 1200 into its offerings could help TerraVia strengthen its position in the market. By leveraging the nutritional benefits associated with products like Citracal 1200, TerraVia might be able to enhance its appeal to consumers seeking functional food ingredients. Ultimately, the company’s ability to embrace such opportunities will be crucial as it navigates its challenging landscape.