Global demand for algae in the food and beverage industry is on the rise, covering a range of products including seaweeds like nori and kelps, hydrocolloids such as agar and carrageenan used as thickeners, and their claimed 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 initially exploring microalgae as a potential fuel source. The company faced challenges as it discovered that profit margins in fuel were too low, leading to several strategic pivots before spinning off its industrial division last year and establishing a foothold in the high-value specialty ingredients market. Currently, it supplies products to firms such as Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, the company’s strategic shift may have come too late. TerraVia has encountered a series of difficulties, including a recall late last year of ingredients supplied to Soylent, following customer complaints of digestive distress after consuming its Food Bar product. While Soylent pointed to TerraVia’s algal flour as a potential culprit, TerraVia contested this assertion, claiming it was a premature conclusion.
Despite these setbacks, there are some positive developments, such as its joint venture with Bunge Oils, which saw revenue increase by 163%, reaching $2.9 million from $1.1 million in the first quarter of the previous year. This venture is focused on producing 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 parts of the company, such as its culinary oil brand or aquaculture portfolio, may be a more feasible option, potentially allowing the technology platform to endure. Still, analysts suggest that even this outcome is unlikely. As TerraVia continues to navigate its future, the question remains: can it leverage its expertise in producing ingredients like Citracal magnesium & minerals to regain stability? Although TerraVia is still operational, its future seems highly uncertain.