Exploring Mushrooms as an Emerging Sector for CEA

“We’re seeing innovation in the white and brown mushroom space, where standard farming approaches are being implemented, and where robots are being used,” said Sean O’Connor, CEO of 4AG Robotics. Sean sees the wooden farms as a lost cause right now because it’s hard to bring new innovation into those spaces. “Whereas the aluminum Dutch rack units, if companies like us can scale, we’re going to see the next wave of innovation in terms of technology adoption and the cost base that’s changing in the mushroom space.”

Let’s move on to aluminum
What’s the difference between the “new style of mushroom farming” now coming to CEA? The key differentiators are the shelving and the way the farms are built, Sean explains. The American style is wooden, while others opt for Dutch aluminum shelving that creates uniformity in every room. Building its first V1 robot in 2019, 4AG Robotics spent $19 million more and four years longer to get its ultimate mushroom-picking robot.

Highlighting the changes in the mushroom sector, Alex Corbacho, Partner at Paine Schwartz Partners, said, “These things print money if they have the resources,” referring to mushrooms. The lack of understanding of how mushrooms are made led John to explain how various mushroom growers ended up at the CEA high-tech event. The panel was joined by Joe Weber, Founder and President of Four Star Mushrooms, Sean O’Connor, CEO of 4AG Robotics, John James Staniszewski, Founder and Co-Owner of Windy City Mushrooms, and Amir Karian, CEO of Monterey Mushrooms.

Mushroom products are on the rise, from mushroom leathers to mycelium-based alternative foods to the classic portobello mushroom. But Alex emphasizes that mushrooms were one of the original vertical farming systems. “Mushrooms are a very sustainable protein source to grow, because you need about 1 gallon of water per pound of mushrooms. From the perspective of time and cultivation, there doesn’t seem to be a more sustainable food product on the market,” says John James Staniszewski, founder and co-owner of Windy City Mushrooms.

“From a facility utilization standpoint, the number of cycles you get in a year compared to tomatoes or cucumbers is pretty fascinating because they cycle quickly. That also means that if something goes wrong, it goes very quickly,” Alex said with a laugh.

Development of alternative uses for mushrooms
“The industry has basically scientifically engineered mushroom seeds. The innovation that’s happening on the genetic side, we’re always looking for ways to improve yield, flavor profile, density, weight (given that they’re sold by the pound). The foundation of building IP around genetics, breeding better mushrooms,” Amir says. Nutraceuticals in mushrooms are food that can be used as medicine, which is more common in space.

There is an explosion of functional benefits in food, and in this case, mushroom species. Consider mushroom coffee, which is seeing a huge surge in interest because of the convenience of consuming essential nutrients via mushroom compounds. “The big opportunity in North America is growing specialty mushrooms,” Joe adds.

Growing retail presence
“Will the mushroom aisle in the supermarket look different in five to 10 years, given the innovations that are happening now?” Alex poses. Joe sees Chicago supermarkets selling sixteen servings of two mushrooms, while specialty mushrooms are all about exotics. “But the quality ingredient that is supported by local cultivation, which leads to a longer shelf life, will allow supermarkets to feel more comfortable introducing more exotic mushrooms. But taking on the burden is a challenge.”

Does that mean they’re charging a premium for the higher value? John thinks so. Because it brings in a new customer. Windy City Mushrooms focuses on oyster mushrooms and maned mushrooms because those are the “most socially acceptable” mushrooms right now. Then, after that, they’ll add more varieties because they “don’t want to overwhelm the customer because they often don’t know how to prepare them.”

“The plant-based industry is using highly processed foods that are not good for anyone. I think the real growth market is products like fungi foods, lion’s mane patties, or alternatives that can be stored on the shelf or frozen, which allows people to add them as functional plant-based alternatives,” John noted.

For more information:
Four Star Mushrooms
https://fourstarmushrooms.com

Windy City Mushroom
https://windycitymushroom.com

Robotics 4Ag
https://4ag.ai