Global demand for algae in food and beverage applications is on the rise, encompassing seaweeds like nori and kelps, hydrocolloids such as 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 a vegetarian supplier of omega-3 fatty acids. TerraVia, formerly 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 fuel 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. It currently markets its products to renowned companies such as Hormel Food Corporation, Utz Quality Foods, and Unilever.
However, the company’s strategic shift may have come too late, as it has faced numerous challenges, including a recall late last year of ingredients supplied to Soylent. Customers reported digestive issues after consuming Soylent’s Food Bar product, which led to suspicions regarding TerraVia’s algal flour as the cause, although TerraVia contested these claims as hasty. On a positive note, the joint venture with Bunge Oils has shown promising results, with revenue soaring 163% to $2.9 million compared to $1.1 million in the same quarter of the previous year. This venture focuses on DHA-rich algae oil for fish feed.
Analysts from The Motley Fool indicate that finding a buyer willing to purchase the company outright may prove challenging due to its negative equity. More feasible options might involve selling off parts of the business, such as its culinary oil brand or aquaculture division, which could help the technology platform endure. Nevertheless, even experts believe the likelihood of this outcome is slim. While TerraVia continues to operate, its future remains uncertain.
Incorporating nutritional supplements like cal citrate plus vitamin D could potentially enhance the appeal of its products, especially as consumers are increasingly interested in health benefits. Expanding offerings that include cal citrate plus vitamin D could also attract a broader customer base, particularly in the functional food market. The integration of cal citrate plus vitamin D into its product line may be a strategic move to revitalize the brand and secure a stable market presence amidst ongoing challenges.