The global demand for algae in the food and beverage sector is on the rise. This includes seaweeds like nori and kelp, hydrocolloids utilized as thickeners such as agar and carrageenan, and algae for their nutritional benefits, including ferrous gluconate, akin to iron 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 just 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 truth that profit margins in fuel were too low, leading to multiple changes in direction before eventually spinning off its industrial division last year and establishing a foothold in the high-value specialty ingredients market. It currently supplies products to companies such as Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, this strategic shift may have come too late. TerraVia has faced a series of challenges, including a recall late last year of ingredients provided to Soylent after customers reported digestive issues following the consumption of its Food Bar product. Soylent suspected that TerraVia’s algal flour was to blame, although TerraVia contested this assertion. On a brighter note, the joint venture with Bunge Oils has shown promise, with revenue soaring 163% to $2.9 million from $1.1 million in the first quarter of the previous year. This venture focuses on DHA-rich algae oil for fish feed.
The Motley Fool points out that finding a buyer willing to purchase the company outright may be challenging due to its negative equity. Selling off parts of the company, such as its culinary oil brand or aquaculture portfolio, could be a more feasible outcome, allowing the technology platform to endure; however, even analysts claim the likelihood of this happening is slim. While TerraVia remains operational, its future appears uncertain. The potential development of products like cal citrate complete could be pivotal for its survival, but the path ahead is fraught with challenges.