Mushroom boom continues

The exotic mushroom industry is experiencing a period of dynamic growth, owing to this commodity’s ability to satisfy several trendy consumer desires simultaneously. However, pressures from the global exotic mushroom industry and potential changes to organic certification rules may signal challenges ahead for domestic organic mushrooms.

“It's been more than 40 years of growth for our farms,” said Louis Caputo, head of operations at Caputo & Guest, an exotic mushroom brand from Kennett Square, Pennsylvania, located in, “the heart of the white mushroom industry,” according to Caputo. The Caputo & Guest brand produces mushrooms from its Kennett Square Specialties farm, a business originally started by Lou Caputo Sr. and Herb Guest in 1977.

During its four decades of growth, the company has undergone significant advances, including adding 250,000 square feet of indoor grow space in 2018 and updating substrate facilities in 2023—a move Caputo said will triple production. “The infrastructure has been built. We are just waiting for consumers and retailers to catch up,” he added.

The boom of ‘shrooms’

These investments from Caputo & Guest come amid a wave of popularity for fungi, especially in the last few years. Converging trends have pushed this commodity to year-over-year growth in both volume and dollars. In the second quarter of 2024, organic mushrooms experienced a 13.5% increase in volume and an 8.2% dollar increase compared to the same period in 2023.

Over the last decade, grocery shoppers have picked up 20% more mushrooms in the last decade, according to data firm Circana and as published in The Guardian, while specialty mushrooms doubled in sales during that time. Experts attribute this surge to several factors, all illustrating the evolving priorities of consumers. Mushrooms are increasingly made into superfood coffees and organic snacks, while also serving in an array of plant-based alternatives to pricier and less-sustainable meat options.

Caputo’s sustained growth prompted the launch of the company’s exotic organic mushroom line, Caputo & Guest, in the fall of 2023—mere months after mushrooms were named the 2022 ingredient of the year by the New York Times. Caputo & Guest offers 4 oz. packs of royal trumpet, golden oyster, lion’s mane, pearl oyster and maitake mushrooms. The brand’s second product line, Chef’s Mixes, helps shoppers pair exotic mushrooms with a particular recipe or cuisine.

“Our current Caputo & Guest line is converting as many ‘non-mushroom’ or even ‘exotic mushroom-hesitant’ eaters as possible with recipe based packages,” Caputo said. “While exotic mushrooms may be foreign to many consumers, our packages highlighting pizza or steak recipes are our way to assist those feeling adventurous for dinner tonight, with something common such as pizza with the new twist of adding exotic mushrooms as a topping.”

Caputo & Guest exotic mushrooms growing on the company's proprietary substrate. Credit: Caputo & Guest

‘Exotics as a completely separate industry’

A focus on exotic mushrooms provides an avenue to reach “mushroom-hesitant” consumers, as this product both tastes and grows differently than a more traditional white button mushroom, Caputo said. “My entire life, people have expressed two main concerns if they did not like mushrooms: texture and manure,” he said. “We want non-mushroom eaters to know that not all mushrooms taste, feel or even grow the same way.”

Caputo said he views his product as “intertwined physically but completely different,” from traditional white mushrooms. This can present an awareness challenge for consumers and retailers alike. “Separating exotics on shelf from the traditional white and portobello industry is hard,” he said. “But we view exotics as a completely separate industry.  Most retailers we approach do not currently have the varieties we offer on shelves.”

Caputo & Guest uses a proprietary blend of organic oak, poplar sawdust and grain mixtures for its commercial cultivation of organic exotic mushrooms. “We create a blend of the perfect food source each species prefers, sterilize it and then introduce the mushroom spores,” Caputo said of his proprietary substrate. “It's a very clean but natural process that also keeps disease and insect control low as there is no manure on site to attract insects or other contaminants.”

Currently, organic mushrooms are certified based on the same standards as crops, livestock and handling—pending amendments proposed in May 2024 that would attempt to develop mushroom-specific rules. Similar amendments were explored in 1995 and 2001. As of June 2023, 272 organic mushroom operations were certified.

Supporters to these certification updates say the compost used to grow mushrooms needs greater scrutiny. Today, certified organic mushrooms can be grown in wood substrate or manure. Most exotic mushrooms thrive on wood, while white button mushrooms—an overwhelming segment of the mushroom sector—typically grow on manure. Monterey Mushrooms’ website, for example, describes its organic white and portabella mushrooms using “fresh (or dried) chicken fertilizer in part of the composting process.”

Global pressure on mushroom industry

The expanding mushroom industry has attracted increased global competition, including a soaring environmental impact and potential to obscure current organic certification rules, Caputo said.

Between 2021 and 2022, exports of fresh or chilled mushrooms grew the fastest in China, totaling $44.6 million. In 2022, China ranked third for mushroom exports globally, trailing Poland ($503 million) and Canada ($340 million).

Caputo expressed concern over imported substrate blocks, produced over three months in Asia before arriving via container ship and sprouting mushrooms on American soil after seven to 10 days—making them a U.S.-grown product. “This is a labeling violation in our opinion,” Caputo said, after detailing the cook logs and insurance records he provides for his substrate. “Do U.S. regulators travel to Asian mushroom farms and do these thorough inspections?”

As increased regulatory scrutiny appears on the horizon for mushrooms and sustainability surveys gain popularity, Caputo also cited the overall environmental impact from mushrooms shipped from overseas. He said imported mushrooms are priced similarly but do not share the same dedication to reducing plastic as Caputo & Guest, who have a “big aspiration” to develop mycelium, or mushroom root-based compostable packaging. “I believe an easier hurdle for the food supply chain to tackle is sourcing similarly priced products closer to their final destination,” Caputo said. “Getting exotic mushrooms to consumers is our number one goal.”