Personal Finance

Forget Unilever. This New Partnership Is Vital to TerraVia's Future

Terravia Logo
Terravia Logo

Several food ingredient brands from TerraVia that could play
important roles at TerraBrands. Image source: TerraVia.

Several food ingredient brands from TerraVia that could play important roles at TerraBrands. Image source: TerraVia.

By acquiring established brands, TerraVia will avoid specific risks associated with launching an in-house brand from scratch. Instead of spending time testing products and attempting to stand out in a crowded market, the company can devote capital to reformulating products with algae ingredients and growing market share. Better yet, there will be a baseline of revenue -- and maybe even income -- from the beginning. The more brands it acquires, the more manufacturing capacity it can utilize, which further lowers production costs across the company's portfolio of food and speciality ingredients.

On paper, this is the most important partnership for TerraVia's future. And, in my mind, it's not even close.

What does it mean for investors?

If TerraVia's new vision and focus on food ingredients is ever going to prove successful, then it needs TerraBrands to take off. The venture won't be an overnight success story; investors shouldn't forget that it took nearly seven years for popchips to notch $93 million in annual sales. Given the recent pivots, investors are right to acknowledge that the margin for error is a bit smaller now. But the combination of capital, innovative ingredients, and vision certainly makes TerraBrands a more important -- and more exciting -- growth avenue than anything offered from bulk sales to Unilever.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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