TerraVia in the Wilderness Years : Biofuels Digest

TerraVia in the Wilderness Years

April 19, 2017

Over at our sister publication Nuu, we reported this week that TerraVia got a “generally recognized as safe” OK from the FDA for its long-awaited algae butter.

It’s a palm-free, non-hydrogenated, vegan solution for bakery, spreads and confectionery applications. Algae Butter will be produced by the TerraVia and Bunge joint venture, SB Oils, and marketed in the U.S. by Bunge North America.

Quick melting with a clean taste, it works just a little like renewable jet fuel when it comes to replacing the incumbent — Algae Butter can reduce saturated fat by up to 50 percent in most applications.

“The food industry has been searching for a replacement for palm and hydrogenated vegetable oils that maintains quality, taste and functionality and also meets their rigorous criteria for sustainable sourcing,” said Mark Brooks, Senior Vice President, TerraVia. “We believe Algae butter is a game changer for the structuring fats industry in terms of sustainability and nutrition.”

While butter doesn’t exactly rival gasoline as a market — it’s pretty substantial, when you get down to it. The global market is something like $4.4 billion – a demand of around 10 million tons and a price point around $4400 per ton. Giving TerraVia a shot at $2.2B of that — and at a price point that dwarfs some of the company’s targets from its Solazyme days — the world of $360 per ton crude petroleum, for example.

“We make oils” said the prospectus for the old Solazyme when it completed its celebrated IPO five years ago, pledging to transform the market for oils through the power of algae to make them. The company has subsequently ratcheted its focus down to speciality ingredients and nutrition — but that’s been typical of almost every algae-based venture, most of which long abandoned the fuels and big chemicals markets in a search for price points that were more reachable in the near-term.

TerraVia has not disclosed in recent years its production cost for algae oils — but $4400 per ton is, surely, a tempting and high-margin target.

TerraVia’s rough month

It’s been rough going for TerraVia in recent weeks.

The company announced a painful round of layoffs — 25 percent of the company’s workforce, which had already been substantially reduced in the past two years. And the company suspended operations at its Peoria, Illinois demonstration-scale facility, and said it was seeking “strategic opportunities to partner its AlgaVia® line of products” — which of course could range from a joint venture to an outright sale of the brands (while retaining perhaps a manufacturing contract)…

Finish reading: TerraVia in the Wilderness Years : Biofuels Digest






 

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