TerraVia algae butter to launch in early 2018, could be a ‘blockbuster,’ predicts CEO

By Elaine Watson

- Last updated on GMT

TerraVia algae butter to launch in early 2018

Related tags Trans fat Fatty acid

While other irons in TerraVia’s fire are a little warmer right now, its much-anticipated algae butter - scheduled for commercial launch in early 2018 - has “the potential to be a blockbuster,” according to CEO Apu Mody.

Speaking on the microalgae company’s​ Q1 earnings call on Wednesday, Mody said: “Our priority products include AlgaPrime DHA ​[long chain omega-3 fatty acid targeting the animal feed market] and AlgaPür ​[specialty oil targeting personal care markets].

"Ourthird product targeted for a 2018 launch is our structuring fat, which will be branded AlgaWise Algae Butter…. a product that has the potential to be a blockbuster.

“We expect to commercially launch this product ​[which will be produced with partner Bunge via the SB Oils joint venture and marketed in the US by Bunge North America] in early 2018.

“We’ve already successfully scaled the product and have a number of strategic customers working on market applications today.

“In the first quarter, we received a GRAS no questions letter from the FDA paving the way for algae butter’s commercial release in the US. Our algae butter is palm oil free, non-hydrogenated solution for the bakery, spreads and confectionery markets."

And that represents “a $2 billion plus market opportunity,” ​he claimed. “We believe our product delivers the same or better performance than other structuring fats including shea stearin and cocoa butter and offers superior nutrition and sustainability attributes.”

Algae butter could replace shea stearin, cocoa butter, palm oil, PHOs

The butter – which had originally been scheduled for launch in 2016​ - could replace hard fats such as palm oil or partially hydrogenated oils in a variety of applications spanning confectionery, bakery and spreads, and mirrors structuring fats such as shea stearin.

It works particularly well in applications such as icing/frosting, and laminated dough products such as croissants, where hard fats that are solid at room temperature – but have certain melting properties - are required.

Mark Brooks Solazyme

"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. We believe algae butter​ is a game changer for the structuring fats industry in terms of sustainability and nutrition."

Mark Brooks, Senior Vice President, TerraVia

Speaking to FoodNavigator-USA when the product was under development, SVP Mark Brooks said manufacturers could likely describe it as ‘algae butter’ on their ingredients lists, “just as you are allowed to say ‘cocoa butter’ or ‘shea butter’, which are not dairy-derived either ​[there is a standard of identity for butter as a standalone ingredient].”

He added: “The algae butter has a very sharp consistent melting curve that gives the consumer a really enhanced sensory experience, but also delivers from a technical and functional perspective, so confectionery melts in your mouth, not on your hand, and spreads are solid at room temperature but melt after you spread them on toast. It also provides clean taste and can reduce saturated fat by up to 50% in most applications.

 “What’s exciting is that you can combine the algae butter with liquid oils such as our high oleic algae oils and get a better nutritional profile, and use less of the structuring fat ​[the hard fraction]. So our pastry chef here has found that she can make croissants using less of the structured fat than she usually would in that recipe.”

Solazyme oils

While the chlorella microalgae strain used to make TerraVia’s AlgaVia flours and proteins​ is not​ genetically engineered, its oils and structured fats cannot be efficiently produced in native algae strains, so it uses GE techniques (eg. introducing genes from other plants, or inhibiting the production of certain enzymes in order to get more of the oil components it wants and fewer of those it doesn’t) in order to make precisely tailored oils with unique functionality.

However, there are no GMOs in the final AlgaWise oils and fats,​ which are made from an oil-generating algae strain originally discovered in the sap of chestnut tree in Germany that has been genetically engineered to increase its productivity. 

Palm-free hard fat

Manufacturers also like the algae butter because it means they can “eliminate partially hydrogenated oils ​[which must be ousted from foods in the US by June 2018​] and replace palm oil ​[which is widely used in confectionery, spreads and bakery because it is semisolid at room temperature] or other oils with problematic supply chains.​” 

Thrive culinary algae oil gaining traction

Meanwhile, TerraVia’s culinary algae oil Thrive​ – which has a clean taste, high smoke point and high levels of monounsaturated fat, zero trans fat and low levels of saturated fat – “is gaining retail sales traction and we expect to be on the shelves of major retailers and new markets around the country in coming months, including in the North East and the South East,” ​said Mody.

Thrive oil

“Thrive continues to garner awards and recognition from food industry press including named Best New Product of the Year by BrandSpark, which conducts the leading consumer poll rating CPG products. We are also preparing to launch a spray version of the oil that will feature zero saturated fats per serving.”

As for the AlgaVia​ powders, the first food ingredients TerraVia brought to market, he said, “We are actively engaged in discussions around potential strategic partnerships and we are seeing broad interest.”

AlgaPrime DHA: ‘Showing early signs of being a blockbuster new product’

However, most of the call was devoted to the long-chain omega-3 fatty acid AlgaPrime DHA​, which he said was “showing early signs of being a blockbuster new product that can become a vital feed ingredient for aquaculture and potentially other nutrition markets.

He added: “AlgaPrime DHA is expected to be a key feed ingredient in the future of aquaculture. .. We were pleased to see the recently announced adoption of AlgaPrime DHA by two very significant salmon farmers; Lerøy Seafood Group in Norway and Ventisqueros in Chile. Both relationships are the result of our expanded partnership with BioMar.

“We also see high potential and future applications for DHA in animal feed and eventually human nutrition, and are in productive discussions with potential partners on both fronts.”

TerraVia: Still loss-making

Apu Mody - the former president of Mars Food America - assumed the role of CEO at TerraVia in August 2016

San Francisco-based TerraVia – which is currently engaged in a process with strategic and financial parties that could result in a “sale of all, substantially all, or a portion of the company​” – posted a net loss of $22.6m on revenues of $4.5m in the first quarter of 2017. However, it ended the quarter with $45m in cash and equivalents.

"As we move through the process of seeking to restructure our balance sheet and evaluating strategic alternatives, we continue to take prudent steps to reduce cash and capital commitments while keeping the company on track with our growth goals for the year​,” said COO and CFO Tyler Painter.

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