The global demand for algae in food and beverages is on the rise, encompassing various forms such as seaweeds like nori and kelps, hydrocolloids used as thickeners like agar and carrageenan, and their perceived nutritional benefits in supplements and functional food ingredients. There is a growing interest in algae as a sustainable protein source 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 the hard way that profit margins in the fuel sector were too low, leading to several strategic pivots before eventually spinning off its industrial division last year to establish a presence in the high-value specialty ingredients market. Currently, TerraVia sells its products to companies such as Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, this strategic shift may have come too late for the company, which has faced numerous challenges, including a recall late last year of ingredients supplied to Soylent after customers reported digestive issues linked to its Food Bar product. Soylent pointed to TerraVia’s algal flour as a possible culprit, although TerraVia contested this claim as being made hastily.
There are some promising developments, including a joint venture with Bunge Oils, where revenues surged by 163% to $2.9 million from $1.1 million in the same quarter of the previous year. This venture is focused on DHA-rich algae oil for fish feed. However, The Motley Fool indicates that finding a buyer willing to acquire the company outright may be challenging, given its negative equity situation. Selling off parts of the company, such as its culinary oil brand or aquaculture portfolio, could be a more feasible outcome and might allow the technology platform to continue, although even analysts believe the likelihood of this happening is slim.
TerraVia remains operational, but its future appears highly uncertain. In the context of this evolving industry, products such as calcium citrate caps might hold potential, highlighting the importance of diversifying and adapting to market demands. This could be especially relevant as the company seeks to navigate its challenges, ensuring that innovations like calcium citrate caps are integrated into their strategy to enhance market appeal and drive growth.