SnaxShot #03: Magic Mushrooms
life's better on shrooms
A newsletter on upcoming food and beverage trends that offers a curation of brands and aesthetics written by Andrea Hernández.
🔮 Peek into the future:
What’s driving the shroom boom.
Snaxshot of market + who’s making moves.
Favorite brands in the space.
Market challenges + opportunities.
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Deep Rooted Trend 🍄
From being worshipped as totems of immortality, to being known as “holy children” our obsession with mushrooms is as old as civilization itself. Interest around functional mushrooms has sprouted over eons and in the spirit of the “commodification of wellness” the global mushroom market is projected to reach $69.3 billion by the end of 2024 as more consumers re-discover the idea of functional foods and food as medicine.
Shroom Boom 💥
The US mushroom market produced $5 billion in revenue in 2018, this number is expected to hit $7.4 billion by end of 2020.
According to Market Research Future the mushroom extract market will experience a 8% CAGR until 2024.
From jerky to drink mixes, the ingredient is being incorporated into more products by CPG companies wanting to tap into its numerous health benefits and meat-like qualities.
Another key driver behind “shroom boom” has been the legalization of psychedelics for use in medicine across the US. As Denver, Colorado, Oakland and Santa Cruz, California, have decriminalized the use of psilocybin, the psychedelic molecule found in various mushrooms —movements for legalization are gaining ground in other states.
Mushroom to Market (M2M) 🚚
Mushrooms have increasingly attracted interest of BigFood™ in recent years as well as a myriad of well known investors:
In 2017, Kellogg invested in MycoTechnology, a Colorado firm making vegan shiitake mushroom-based protein, through its VC arm.
General Mills has invested $3 million in Purely Elizabeth, which uses functional mushroom powder in its wellness bars.
Johns Hopkins, one of America's most prestigious research universities, has established a new psychedelic research center focused on examining the potential of such chemicals, largely funded through the efforts of angel investor Tim Ferriss.
Bruce Linton and Kevin O'Leary are seed investors in MindMed.
Peter Thiel invested in Compass Pathways, a British biotech company developing a psilocybin-based therapy for depression and is looking to IPO.
Skincare brand ‘For the Biome’ partnered with Om Mushroom Superfood, a significant producer of functional and organic mushroom powder, to launch health & wellness products.
The Yield Growth Corp. announced back in 2019 that it completed initial development of a formula for mushroom coffee to launch a new line of mushroom infused coffee mixes through its wholly owned subsidiary Flourish Mushroom Labs Inc.
Growing Mushrooms 📈
Leading companies operating in the mushroom market:
Bloomin’ Brands ✨
Earth and Star: From the founders of BluePrint (who helped pioneer the cold pressed juice movement as well as the DTC bev trend) these are canned lattes with 1000mg of adaptogenic mushroom extract and are plant-based, as they use oat milk.
Rainbo: Canadian brand focusing on functional mushroom tinctures and they also created a mushroom maple syrup! I’m pretty obsessed with their branding not to mention they’re planning on doing Forays as part of their community building (like literal foraging) which sounds like an ideal millennial activity.
Shroomshot: A mushroom wellness shot crafted by two brothers in California, what I like about this is that it’s the new version of wheatgrass shots, remember those? (The things we did for wellness!)
Black Magic: Though they offer an array of products they’re known for their wild harvested, Chaga mushroom, rootbeer elixir. The bottle comes in a variety of sizes, their branding has got this alchemy theme going on which I’ve seen before (hello ThreeSpirits) and in true DTC spirit, they offer a subscription service!
Üphoric Urth: Premium mushroom tinctures that offer an array of “functions” from detox, to focus, to immunity boosting, this brand also offers a subscription service. Their key differentiator from other brands I’ve seen is their transparency behind what goes in their products —no myceliated grains, no unnatural additives, or unnecessary ingredients.
FUNGTN: Mushroom based, adaptogenic alcohol-free beer. (Yes, you read that right)
MUD/WTR: Based in Venice, CA they’re a coffee alternative that contains several kinds of mushroom. They established in 2018, six months after that, they reportedly began making upwards of “six figures in revenue” —they have seed investment from M13. (According to this article, around $1 million)
Pan’s Jerky: Based in Vancouver, they’re jerky is made of shiitake mushrooms with a delicious umami taste and a meaty texture. They were part of Built Oregon’s accelerator program, they’re now an investor in the brand.
Butterfly: They call themselves a superfood butter brand, their chocolate reishi mushroom butter is their top seller. Think of it as a functional Nutella.
Four Sigmatic: So far I would consider them the most known CPG mushroom-based brand in the industry along with OM (see below) The founder is Finnish, founded the company in 2012 and recently moved the company HQ to LA (for obvious reasons) —he's raised over $5.4 million, while his company reportedly is making “8-figures” in revenue. They sell more than 30 mushroom products including coffee-replacement beverages, wellness elixirs, protein supplements and beauty products.
OM Mushroom: Based in San Diego, they use around 10 species of mushrooms in single species powders and powder blends —think drink mixes, broth powders, and latte mixes. They’ve raised $$ though an undisclosed amount from two firms —Avrio Capital and White Road Investments.
Moon Juice: Another "darling” of the industry, founded by Amanda Chantal, they offer an array of supplements, “Moon Dust” being one of their most recognizable and popular items. They’ve raised over $7 million in the past 9 years and are preparing to raise again this year. Founded in 2011 it was reportedly making $20 million in sales by 2018.
Kindroot: Their unique plant lozenges are known as “adaptogems” think of this as candy supplements —I really wanted to hate it but it’s sheer genius. They come in four flavors at the moment, the company is based in LA and is led by a female founder.
Bright Future: Based in Canada, they offer an array of products but their capsules are what drew my attention most. The branding is amazing because it combines both minimalism and psychedelic inspired prints inside their box.
Mushy Business 😵
The challenge lies in pending FDA approval —for now most brands have disclaimers and unless you have incredible branding does cast doubt in terms of the veracity of product claims —other wellness CPG businesses have had this backfire (think Health Ade lawsuits).
If looking for an omni channel strategy —buyers like WholeFoods have very strict measures in terms of accepting just any mushroom based products because mushrooms themselves are very representative of their environment and as consumers look for more clean labels, a good sourcing of mushrooms is extremely important.
Sprouting Opportunity 🌱
The market is highly fragmented which is a competitive advantage for CPG brands looking to get into segment, whether big or small.
Supplements continue to be the market favorite and the most growing trend in this space.
Decriminalization of psilocybin in some states has created demand for psychedelic mushrooms opening the door for a whole new wave of products in this space. The demand is sprouting across the country and it’s expected to be on various state ballots come November.
See you again next week, different future, same place.
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