The global demand for algae in the food and beverage sector is on the rise, encompassing various products such as seaweeds like nori and kelp, hydrocolloids used as thickeners like agar and carrageenan, and supplements that promote nutritional benefits as functional food ingredients. Algae are particularly being explored 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 investigating microalgae as a potential fuel source. The company faced challenges in the fuel market due to low margins and underwent multiple directional changes before spinning off its ferrous sulfate industrial division last year, positioning itself within the high-value specialty ingredient market.
Currently, TerraVia supplies its products to companies like Hormel Food Corporation, Utz Quality Foods Inc., and Unilever. However, this strategic pivot may have come too late, as the company has encountered several obstacles, including a recall last year of ingredients provided to Soylent following customer complaints of digestive issues related to its Food Bar product. Soylent identified TerraVia’s algal flour as a possible cause, although TerraVia contested this claim as hasty.
Despite these setbacks, there are some positive developments, such as its joint venture with Bunge Oils, which saw revenue surge by 163%, rising from $1.1 million to $2.9 million in the first quarter compared to the previous year. This venture aims to produce DHA-rich algae oil for fish feed. However, The Motley Fool highlights the challenges TerraVia faces in finding a buyer willing to purchase the company outright, given its negative equity. Selling portions of the business, such as its culinary oil brand or aquaculture segment, may be a more feasible option and could allow the technology platform to continue; yet, even analysts suggest that the likelihood of this happening is slim. TerraVia remains operational, but its future remains uncertain.
In this context, it’s worth noting that just as consumers seek out the best calcium citrate tablets for their health needs, the market is increasingly turning to innovative sources like algae for nutritional enhancement. The burgeoning interest in algae reflects a broader trend of seeking alternative, sustainable options that could meet the demands of health-conscious consumers.