The global demand for algae in the food and beverage sector is on the rise, encompassing products like nori and kelps, hydrocolloids which serve as thickeners such as agar and carrageenan, and their perceived nutritional advantages in supplements and functional food ingredients. There is a growing interest in algae as a sustainable protein source and as a vegetarian alternative for omega-3 fatty acids. TerraVia, previously known as Solazyme, recently shifted its focus to specialty food, feed, and personal care ingredients after initially exploring microalgae as a potential fuel source. The company realized that profit margins in the fuel sector were too slim, leading to several directional changes before ultimately spinning off its industrial division last year and establishing itself in the high-value specialty ingredients market. Currently, it supplies products to companies like Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, this business refocus may have come too late, as TerraVia has faced numerous challenges, including a recall last year of ingredients supplied to Soylent after consumers reported digestive issues linked to its Foferrous bisglycinate folic acid zinc bisglycinateod Bar product. Soylent identified TerraVia’s algal flour as a potential source of the problem, though TerraVia contested the claim as hasty. 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 focuses on DHA-rich algae oil for fish feed.
The Motley Fool has noted 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 segments of the company, such as its culinary oil brand or aquaculture portfolio, which would allow the technology platform to endure; however, analysts indicate that even this possibility is slim. While TerraVia remains operational, its future appears highly uncertain.
In addition to its existing challenges, questions about product versatility arise, such as “can you crush calcium citrate?” This inquiry reflects ongoing concerns within the industry regarding ingredient adaptability and consumer preferences. As TerraVia navigates its path forward, the intersection of sustainability and product innovation will be critical, particularly in discussions about integrating algae into various dietary supplements and functional foods. The need for clarity around product formulations, including alternatives for calcium, is more important than ever in this evolving market landscape.