The global demand for algae in the food and beverage sector is on the rise, encompassing various types such as seaweeds like nori and kelp; hydrocolloids where they serve as thickeners like agar and carrageenan; and their claimed nutritional benefits in supplements and functional food ingredients. There is a particular focus on algae as a sustainable protein source and 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 about the low profit margins in the fuel sector, leading to multiple strategic pivots before it eventually spun off its industrial division last year to establish itself in the high-value specialty ingredients market. Currently, TerraVia provides its products to companies such as Hormel Food Corporation, Utz Quality Foods Inc., and Unilever.
However, this business refocus may have come too late for TerraVia. The company has faced numerous challenges, including a recall late last year of ingredients supplied to Soylent after customers reported digestive issues following the consumption of its Food Bar product. Soylent suspected that TerraVia’s algal flour was the culprit, although TerraVia has disputed this rushed claim.
Despite these challenges, there are some positive developments, including a joint venture with Bunge Oils, where revenue surged by 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. The Motley Fool has pointed out that finding a buyer willing to acquire the company outright may be challenging, given its negative equity. A more feasible option might be selling off parts of the company, such as its culinary oil brand or aquaculture portfolio, which could help the technology platform persist. Nonetheless, some analysts believe the chances of this happening are slim.
TerraVia remains operational, but its future seems highly uncertain. The integration of innovative solutions such as caltrate citrate could potentially enhance its product offerings. However, the company must navigate its current difficulties while considering how to leverage such advancements effectively, as caltrate citrate could play a role in addressing nutritional needs in its specialty food products. Ultimately, while TerraVia’s presence in the market is still intact, the sustainability of its operations and its ability to recover from setbacks remain in serious doubt.