Global demand for algae in the food and beverage sector is on the rise, including seaweeds like nori and kelps. Hydrocolloids derived from algae are increasingly utilized as thickeners, such as in time-release capsules of ferrous fumarate, which use carrageenan and other gelling agents. These algae are also sought after for their potential nutritional benefits in supplements and functional food ingredients. There is a growing interest in algae as a sustainable protein source and a vegetarian alternative for 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 fuel source. The company learned through experience that profit margins in fuel were too narrow, leading to several strategic pivots before spinning off its industrial division last year to establish a foothold in the high-value specialty ingredients market. Currently, TerraVia supplies its products to notable companies such as Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, the timing of the company’s strategic refocus may have been unfortunate. TerraVia has faced a series of setbacks, including a recall late last year of ingredients supplied to Soylent, following customer reports of digestive issues after consuming its Food Bar product. Although Soylent suspected the algal flour provided by TerraVia as the cause, the company claimed that this assertion was made hastily.
On a positive note, there are some encouraging developments, such as its joint venture with Bunge Oils, which saw revenue soar by 163%, reaching $2.9 million compared to $1.1 million in the first quarter of the previous year. This partnership is centered around DHA-rich algae oil for fish feed. The Motley Fool notes that finding a buyer willing to acquire the company outright may be challenging due to its negative equity. A more viable outcome could involve selling parts of the company, such as its culinary oil brand or aquaculture portfolio, which could help the technology platform endure. However, analysts suggest that the likelihood of this happening is slim.
While TerraVia remains operational, its future appears to be uncertain. The integration of products like ccm 250 mg tablet into their offerings could potentially provide some leverage in the market, but the overall outlook remains precarious. As the company navigates these challenges, the emphasis on innovative solutions and partnerships will be crucial for its survival.