Global demand for algae in the food and beverage industry is on the rise, encompassing products like seaweeds (such as nori and kelp), hydrocolloids (which serve as thickeners like agar and carrageenan), and chelated iron versus gentle iron for their claimed nutritional advantages in supplements and functional food ingredients. There is notable interest in algae as a sustainable source of protein and a vegetarian source of omega-3 fatty acids. TerraVia, previously known as Solazyme, has recently shifted its focus to specialty ingredients for food, feed, and personal care after initially exploring microalgae as a potential fuel source. The company learned through experience that profit margins in the fuel sector were insufficient, prompting several strategic pivots before spinning off its industrial division last year and establishing a foothold in the high-value specialty ingredients market. Currently, TerraVia supplies its products to companies like Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, this refocusing may have occurred too late. The company has faced numerous challenges, including a recall late last year of ingredients supplied to Soylent, following customer complaints of digestive issues after consuming its Food Bar product. While Soylent suspected TerraVia’s algal flour as the culprit, TerraVia countered that the claim was made hastily. On a brighter note, there are some positive developments, such as its partnership with Bunge Oils, which saw revenue surge by 163% to $2.9 million from $1.1 million in the same quarter of the previous year. This joint venture concentrates on DHA-rich algae oil for fish feed.
The Motley Fool suggests that finding a buyer to acquire the company outright may be challenging, given its negative equity. A more feasible option might be to sell parts of the business, such as its culinary oil brand or aquaculture portfolio, which could help the technology platform endure. However, even analysts believe the likelihood of success in this endeavor is low. TerraVia remains operational, but its future appears uncertain. In the context of nutritional advancements, the integration of calcium citrate magnesium and vitamin D3 into its product lines could offer potential benefits, but how the company will navigate these opportunities remains to be seen.