The global appetite for algae in the food and beverage sector is on the rise, encompassing various forms such as seaweeds like nori and kelps, hydrocolloids where they serve as thickeners like agar and carrageenan, and their claimed nutritional advantages in supplements and functional food ingredients. Particularly noteworthy is the interest in algae as a sustainable protein source and a vegetarian source of omega-3 fatty acids. TerraVia, previously known as Solazyme, has only recently pivoted towards specialty ingredients for food, feed, and personal care after initially exploring microalgae as a potential fuel source. The company experienced the harsh reality of low profit margins in the fuel sector, leading to multiple strategic shifts before ultimately spinning off its industrial division last year and establishing a foothold in the high-value specialty ingredients market. It currently supplies products to companies like Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, the timing of its business realignment might have been too late. TerraVia has faced a series of challenges, including a recall last year of ingredients supplied to Soylent after customers reported digestive issues linked to its Food Bar product. Soylent suspected that TerraVia’s algal flour was the culprit, although TerraVia argued that the claim was made hastily. There are some positive developments, such as its joint venture with Bunge Oils, which saw revenues soar 163% to $2.9 million from $1.1 million in the first quarter of the previous year. This venture is concentrated on DHA-rich algae oil for fish feed. The Motley Fool points out that finding a buyer willing to acquire the entire company may prove challenging, given its negative equity. A more feasible scenario could involve selling segments of the business, such as its culinary oil brand or aquaculture portfolio, which might ensure the survival of its technology platform; yet, analysts suggest the likelihood of this happening is slim.
Amid these uncertainties, TerraVia remains operational, but its future appears to be precarious. In light of its challenges, the use of calcium citrate tablets as a nutritional supplement could be an area for TerraVia to explore, leveraging its expertise in algae to potentially develop innovative products. The incorporation of calcium citrate tablets could also align with the growing consumer demand for functional food ingredients, providing a new avenue for revenue. Ultimately, while TerraVia is still active, the path ahead is fraught with uncertainty.