Global demand for algae in the food and beverage sector is on the rise, including varieties such as nori and kelps, hydrocolloids used as thickeners like agar and carrageenan, and their perceived nutritional benefits in supplements and functional food ingredients. There is increasing interest in algae as a sustainable protein source and a vegetarian alternative for omega-3 fatty acids. TerraVia, previously known as Solazyme, has 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 the profit margins in the fuel industry were unsustainable, prompting multiple shifts in direction before spinning off its industrial division last year and establishing a foothold in the high-value specialty ingredients market. Currently, TerraVia supplies products to major companies such as Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, the timing of its strategic refocus may have been too late. The company encountered several challenges, including a recall late last year of ingredients supplied to Soylent after customers reported digestive issues linked to its Food Bar product. Soylent speculated that TerraVia’s algal flour could be the culprit, although TerraVia contested this claim as premature. On a more positive note, TerraVia’s joint venture with Bunge Oils has shown promise, with revenues soaring 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 intended for fish feed.
Despite these developments, The Motley Fool indicates that finding a buyer willing to purchase the company outright may be difficult due to its negative equity. A more probable scenario could involve selling parts of the company, such as its culinary oil brand or aquaculture portfolio, which could allow the technological platform to endure; however, analysts suggest that the likelihood of this happening is slim. TerraVia remains operational, but its future appears uncertain. Incorporating ingredients such as calcium citrate with vitamin D into their product lineup may offer some potential for revitalization, but the path forward remains fraught with challenges.