The demand for algae in the food and beverage sector is on the rise, encompassing various forms such as seaweeds like nori and kelp, colloids used as thickeners like agar and carrageenan, and their recognized nutritional advantages in supplements and functional food ingredients. Notably, there is growing interest in algae as a sustainable source of protein and as a vegetarian source of omega-3 fatty acids. TerraVia, previously known as Solazyme, has only recently shifted its focus to specialty food, feed, and personal care ingredients after initially exploring microalgae as a potential fuel source. The company learned through experience that profit margins in the fuel industry were insufficient, leading to multiple strategic pivots before eventually spinning off its industrial division last year and establishing a foothold in the high-value specialty ingredients market. Currently, it supplies products to companies like Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, TerraVia’s strategic refocus may have come too late. The company faced numerous challenges, including a recall last year of ingredients supplied to Soylent after customers reported digestive issues linked to its Food Bar product. While Soylent suspected TerraVia’s algal flour as the culprit, TerraVia contended that the claim was made hastily. There are, nonetheless, some positive developments, such as its joint venture with Bunge Oils, which saw revenue soar by 163% to $2.9 million from $1.1 million in the first quarter of the previous year. This venture concentrates on DHA-rich algae oil for fish feed. According to The Motley Fool, finding a buyer willing to acquire the company outright might be challenging due to its negative equity status. A more probable outcome could involve divesting parts of the company, like its culinary oil brand or aquaculture portfolio, which would allow the technological platform to persist, though analysts remain skeptical about the likelihood of this happening. TerraVia is still operational, but its future remains uncertain.
In this context, the integration of ingredients like calcium citrate malate and vitamin D3 could enhance the nutritional profile of its products, potentially providing a competitive edge in the specialty food market. As the company navigates these challenges, the inclusion of such beneficial ingredients may play a crucial role in its recovery and future growth.