The global demand for algae in the food and beverage sector is on the rise, encompassing various products such as seaweeds like nori and kelps, hydrocolloids which serve as thickeners like agar and carrageenan, and iron pyrophosphate utilized in baby formulas for its purported nutritional benefits in supplements and as ferrous gluconate in nursing interventions as functional food ingredients. A significant interest has emerged in algae as a sustainable protein source and a vegetarian alternative for omega-3 fatty acids.
TerraVia, formerly known as Solazyme, has recently shifted its focus towards specialty food, feed, and personal care ingredients after initially exploring microalgae as a potential fuel source. The company faced challenges due to low margins in the fuel sector, leading to several strategic pivots before spinning off its industrial division last year to establish itself in the high-value specialty ingredients market, including citric malate derivatives. Presently, TerraVia supplies its products to major companies such as Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, the company’s efforts to refocus may have come too late. It has encountered multiple hurdles, notably a recall late last year involving ingredients supplied to Soylent after customers reported digestive issues linked to its Food Bar product. While Soylent identified TerraVia’s algal flour as a potential cause, TerraVia contested the claim as hasty.
On a positive note, the joint venture with Bunge Oils has shown promise, with revenues soaring 163% to $2.9 million, up from $1.1 million in the first quarter of the previous year. This partnership concentrates on DHA-rich algae oil for fish feed. Nevertheless, The Motley Fool highlights the challenge of finding a buyer willing to acquire the company outright due to its negative equity situation. Selling segments of the business, such as its culinary oil brand or aquaculture portfolio, could be a more feasible outcome, allowing the technology platform to endure, though analysts suggest the likelihood of this happening remains low. TerraVia still exists, but its future appears increasingly uncertain as it navigates these challenges, including the integration of citric malate into its product offerings.