Dive Brief:
- Thrive Algae Oil is scheduled to be on shelves at more than 2,000 Walmart stores this fall, according to Food Navigator. That will bring the product's total distribution to more than 5,500 U.S. stores, including Albertsons, Giant, Publix and Target. A move into foodservice is planned for next year, Food Navigator reported.
- The product's expansion comes one year after Dutch biotechnology firm Corbion bought TerraVia, a California-based developer and producer of algae-based ingredients, for $20 million in a Chapter 11 bankruptcy auction.
- Thrive Algae Oil has a higher level of monounsaturated fat than any other cooking oil — 13 grams in one tablespoon — at approximately 25% more than olive oil or avocado oil. It is also vegan, contains no trans fats and has a higher-than-normal smoke point, Food Navigator reported.
Dive Insight:
This move could help algae oil become more mainstream. Besides its nutrient benefits and adaptability to various uses, algae oil can also make sustainability claims, which are important to consumers. Most cooking oils are processed from crops needing food and water inputs, with the harvest coming months after that. But algae oil is grown in fermentation tanks and can be harvested within days, so it's much easier to process large quantities on a made-to-order basis. Besides home cooking uses, algae oil has been used in infant formula and supplements, as well as food items for adults.
Unlike palm oil, algae oil is not linked to deforestation, habitat destruction, climate change and indigenous rights abuses in countries where it's produced. Algae oil also is far more productive — producing about 70,000 pounds of oil per acre in open ponds compared to palm oil’s 4,465 pounds per acre.
The market appears to be a promising one. According to Grand View Research, the global algae oil market — covering all applications, including animal feed and biofuels — could reach $2.09 billion by 2025. The research company noted that the food and beverage industry has shown increasing demand for the product because of its lower fat content and natural source of omega-3 fatty acids, antioxidants and proteins.
Producing algae oil for home use may have helped to enhance broader consumer views of algae use in foods.
"Five years ago, consumer perception on algae would have been a question mark. One of the reasons we did Thrive was to get consumer acceptance," TerraVia CEO Apu Mody told Fast Company last year.
So far, the product appears to be winning fans. TerraVia announced that Thrive Algae Oil received a 2017 Best New Product Award in the food and beverage category as decided by consumer votes and opinions. The award is the leading consumer-voted CPG award from market research firm BrandSpark International, the company said.
One issue that could challenge market growth is the relatively higher price for algae oil, Grand View Research noted. This ties back into its higher production costs and "may restrain the industry development over the forecast period," the research firm said. Target is currently offering a 16.9-ounce bottle of Thrive algae oil at its online store for $9.99, a dollar off its usual price. That's in line with other specialty oils such as avocado or olive oil, but it's slightly more expensive than other cooking oils such as canola or safflower.
Although that might not matter much once Thrive Algae Oil is available this fall at Walmart and next year in the foodservice channel, as the company is planning. Not only will that level of exposure bring the product to more mainstream consumers, but it should encourage more interest in foods and beverages containing algae in other forms — which could drive the price down. It could be just the big boost the segment needs to finally reach the market acceptance TerraVia hoped for and Corbion is banking on.
