Dive Brief:
- TerraVia (formerly Solazyme), maker of algae-based ingredients, is joining forces with private equity fund VMG Partners to launch a new venture called TerraBrands.
- The venture will focus on acquiring or investing in manufacturers that have established a proof of concept and developed a passionate consumer base. This will create a platform for launching products with algae-based ingredients.
- The goal of the venture is to promote algae as a superfood that can improve the nutrition, taste, and texture of existing products and can be a source of plant-based protein and healthy fats for new product development.
Dive Insight:
TerraVia was formerly an algae-based biofuels company, but as the petroleum-based fuel prices declined, so did the opportunity for TerraVia to grow in that market. Instead, the company pivoted, having identified opportunity for expansion into the fast-growing plant-based protein and better-for-you CPG markets.
Manufacturers may have a difficult time convincing consumers to eat algae, but TerraVia's algae-based oils and powders have a neutral taste profile. This makes it easier for manufacturers to incorporate these ingredients without drastically impacting the flavor.
VMG has been behind a handful of successful better-for-you brands, including Kind, Vega, Pretzel Crisps, Justin's, and Health Warrior. VMG's expertise in selecting promising brands and product categories in this segment could prove invaluable to TerraVia's mission.