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Mushrooms Emerge as Growth Opportunity Across the Grocery Landscape

https://s3.us-east-1.amazonaws.com/co-assets/assets/images/Pans_Mushroom_Jerky.jpg

 Pan's Mushroom Jerky is pictured on a cutting board next to a fresh green salad and cucumbers.

Pan’s Mushroom Jerky was created from a traditional family recipe, and it got a boost from investor Mark Cuban on “Shark Tank.” — PANCO LLC

Why it matters:

  • Grand View Research estimated the U.S. mushroom market size at $2.97 billion in 2023, and the firm projects a compound annual growth rate of 9.4% from 2024 through 2030 as health-conscious consumers explore the fungi as a plant-based eating option.
  • In its 2024 Consumer Trend Forecast, grocery delivery specialist Instacart was among the many organizations that cited mushrooms as one of the year’s top food trends.
  • Against that backdrop, food startups Pan’s, Meati, and Renude are landing distribution for their mushroom-based jerky, cutlets, coffee, and more in national retailers such as Whole Foods, Meijer, and Target.

As consumers embrace plant-based eating, many have discovered the nutritional value of a meat alternative that is technically neither fruit nor vegetable.

Mushrooms, which belong to the fungi family, are appearing as an ingredient in a variety of products like coffee and snacks such as chips and jerky and as a base ingredient for non-animal-based burgers and steaks.

For today’s health- and sustainability-conscious consumers, mushrooms, often described as a “superfood,” are fat-free, low-calorie, low in sodium, and contain natural antioxidants. They are a source of vitamin D, riboflavin, niacin, potassium, and other nutrients.

In its 2024 Consumer Trend Forecast, grocery delivery specialist Instacart was among the many organizations that cited mushrooms as one of the year’s top food trends.

“More people will catch on to the health benefits of mushrooms,” the company said. “From their possible link to immune-boosting properties and cognitive enhancement, mushrooms are emerging as a powerful ally in people’s well-being.”

The fact that mushrooms are widely thought to boost the immune system helped propel their popularity during the pandemic, when consumers were seeking foods, beverages, and supplements that could help them ward off a potential COVID-19 infection.

In addition to their nutritional properties, mushrooms have a relatively light impact on the environment.

A study by the Mushroom Council reported that the production of a pound of mushrooms requires only 1.8 gallons of water and 1 kilowatt-hour of energy.

Grand View Research estimated the U.S. mushroom market size at $2.97 billion in 2023, and the firm projected a compound annual growth rate of 9.4% from 2024 through 2030. The U.S. market accounted for 4.9% of the global mushroom market in 2023, the report found.

“Increasing demand for exotic food products with natural and organic ingredients is expected to drive the growth of the mushroom market in the country,” the report concluded.

[Read: The Business Opportunities (and Challenges) Weight-Loss Drugs Hold For Food, Fitness, and Fashion Brands]

Pan’s brings Malaysian mushroom jerky to U.S. consumers amid a ‘Shark Tank’ boost

Michael Pan discovered jerky made from shiitake mushrooms on a 2006 visit to his family in Malaysia, and it didn’t take him long to see the potential for the product in the U.S.

Over the next 10 years, he imported the mushroom jerky from Malaysia and sold it in the U.S., building a following for what was then a little-known product. Pan, who is an electrical engineer by training, maintained full-time engineering jobs in the corporate world while researching how to turn what he called his “side hustle” into the full-fledged business that it is today. The company operates under the name Pan’s, and its products are sold online and at retail stores such as Whole Foods, Gelson’s, and others under the Pan’s Mushroom Jerky label in multiple flavors.

As Pan was growing his company, U.S. consumers were becoming more health-conscious and interested in plant-based diets. In addition, the trend toward snacking on the go was gaining traction.

“All of those things aligned to this ‘aha’ moment for me,” said Pan.

In 2016, Pan’s began manufacturing the products in the company’s 14,000-square-foot manufacturing facility in Portland, Oregon, “and we’ve been off and running ever since,” he said.

Mushrooms have long been known to have nutritious and even medicinal properties, both among other cultures around the world and among health enthusiasts in the U.S., he said.

“On one hand, it’s like they’re having a ‘moment,’ but to me, they’ve always had a moment,” said Pan. “They’ve always been there.”

He credits mushroom advocacy groups and mushroom experts such as Paul Stamets, the Founder of Fungi Perfecti, a maker of mushroom-based nutritional supplements, for raising more awareness around the nutritional benefits of mushrooms in the U.S.

Pan’s got a huge boost from a 2021 appearance on the TV show “Shark Tank,” where the company won an investment from technology entrepreneur Mark Cuban. Although the appearance drove a spike in awareness and demand, Pan said in-person product sampling at events has long been the company’s key marketing strategy.

“We want as many people as possible to sample and try it,” he said.

In the meantime, Pan said he is exploring opportunities to expand into other mushroom products, although he declined to disclose details about the company’s plans.

[Read: How Companies Are Monetizing Consumer Demand for Street Food From Around the World]


Increasing demand for exotic food products with natural and organic ingredients is expected to drive the growth of the mushroom market in the country.

Grand View Research

Meati: Sales gains make it ‘clear that we are meeting a need for consumers who are ready to expand their protein options’

Although its products are technically not made from mushrooms, Meati creates meat alternatives using mycelium,
the rootlike structure that exists mostly below the soil that absorbs nutrients from decaying organic matter and sprouts mushrooms.

Meati touts its proprietary mycelium-based ingredient both as nutritious and as a more sustainable alternative to animal agriculture.

Tyler Huggins, Founder of Meati, sees significant unmet demand for meat alternatives. The company’s Mega Ranch production facility can produce “tens of millions of pounds” of Meati products, he said.

“We can grow hundreds of cows’ worth of product in just a few days from a teaspoon of spores, water, and sugar,” Huggins said. “This offers a sustainable, affordable, and versatile protein option that provides other significant nutritional benefits — including but not limited to high fiber content.”

 A Meati chicken cutlet is pictured on a cutting board. A woman's hand is shown slicing the cutlet into strips.

Meati Foods has been a pioneer in the “whole muscle meat replacement” category using its proprietary Mushroom Root to create products such as Crispy Cutlets. — Meati Inc.

Meati’s product line includes four stock-keeping units (SKUs), including two that mimic chicken cutlets, one that mimics beef steak, and another that is positioned as a replacement for carne asada, or seasoned, grilled beef strips. The products are carried by several major retailers, including Whole Foods, Target, and Meijer. These retailers have grown their animal-free meat category by as much as 1,200 basis points thanks in part to the addition of the Meati products, Huggins said.

“Working to quickly scale our production facility to full capacity, we have learned much about the kind of machinery we need,” said Huggins. “We have had to adapt and in some cases create our own to fit our needs.”

Consumers try Meati’s products for many reasons, including health goals and environmental consciousness, as well as to evaluate their flavor and versatility.

“If something doesn’t taste good, consumers won’t buy it again,” said Huggins. “In the same vein, something that easily incorporates into a weekly diet is far more likely to reappear in a customer’s shopping cart.”

When Meati first launched in 2023, up to 40% of its product sales came from consumers purchasing animal-free meat for the first time, and repurchase rates were as high as 60%, Huggins said.

“It’s clear that we are meeting a need for consumers who are ready to expand their protein options,” he said.

In the short term, Meati is focused on achieving positive EBITDA (earnings before interest, taxes, depreciation, and amortization) over the next 12 months.

The company is also focused on ongoing retail expansion, targeting 10,000 stores by year-end.

“Our retail sales are critical for exposing more people to Meati for the first time and driving growth,” Huggins said. “In the long-term, we believe we have what it takes to be a major player in the animal-free meat industry.”

Renude delivers mushroom-based ‘Chagaccinos’ via coffee shops

Coffee is another key category where food companies have leveraged mushrooms as an ingredient.

Among the many companies that have emerged in this space is Renude Beverage Co., maker of the Chagaccino line of coffee mix-ins that are made using extracts from Chaga mushrooms.

Founder and CEO Brandon Mizrahie said he launched the company in 2018 in an effort to address his health issues, which included digestive problems and attention deficit hyperactivity disorder.

 Product shot of Renude Chagaccino drink mixed in a glass with ice cubes and a straw. Pictured next to the glass of Chagaccino is the product container.

Renude has rolled out its Chagaccino beverage mix, which is made with Chaga mushrooms, to coffee shops across the country. — Renude Beverage Co.

Renude uses wild-foraged Chaga mushrooms, which only grow on birch trees in cold climates.

The company has grown through a nationwide rollout of the Chagaccino mix in coffee shops, where point-of-sale promotional displays explain how it’s made and its purported nutrient-dense health benefits.

“If you’ve had a mushroom coffee from a coffee shop anywhere in the U.S., there is about a 99% chance it was the Chagaccino,” Mizrahie said.

Other mushroom coffee companies that have touted the health benefits of their products include Four Sigmatic, one of the pioneers in the space, which offers a range of coffees, teas, and supplements made from mushrooms.

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Published

Mark Hamstra

This post was originally published on this site

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