Mushrooms: The Food That Keeps Giving

Originally printed in the April 2020 issue of Produce Business.

This versatile, healthy ingredient rides a five decade-winning streak.

Few items in the produce department can rival the sustained growth of mushrooms, which have enjoyed a steady increase in per capita consumption for nearly five decades.

Mushrooms have become a staple because of their ease of use in countless dishes eaten at all times of the day, as well as the increasing evidence that they are healthy. Sales seem likely to keep increasing.

“The category is going to keep growing,” says Kevin Donovan, national sales manager at Phillips Mushroom Farms, Kennett Square, PA. “More and more people see mushrooms as staple products they put in their grocery cart every week. The nutritional benefits of mushrooms are known by educated consumers.”

Phillips Mushroom Farms is a fourth-generation family company that is among the leaders in the country in specialty mushroom production and is among the leaders in total mushroom volume.

Consumption of this delectable fungus stood at .28 pounds per capita in 1970-1971, according to U.S. Department of Agriculture Economic Research Service statistics. Consumption rose to 1.19 pounds over the next decade; increased again to 1.98 pounds by 1990-1991; reached 2.57 pounds in 2000-2001; and at last tally stood at 2.94 pounds per capita in 2017-2018.

“Mushroom growers are entering 2020 with record sales volumes, increasing retail prices and solid demand for fresh mushrooms,” says Lori Harrison, director of communications at the American Mushroom Institute, Avondale, PA.

“The September shipment report from the [Redwood Shores, CA.-based] Mushroom Council shows domestic mushroom production set a new all-time high. This was the fourth consecutive new monthly high and reflects steady sales growth throughout the summer months. Both June and August volume this past year exceeded 80 million pounds for the first time.”

The American Mushroom Institute is a voluntary trade association that assists growers, processors and marketers with ag-related guidance and government policy/regulatory decisions.

Keep Them Fresh

The old adage — pile them high and watch them fly — does not apply to mushrooms, because too much stock on display can easily result in product that looks dry and unappetizing. Mushrooms are a delicate lot and require a dose of sensitivity when deciding how much space and how many pounds or packages to display.

“Make sure you don’t have too much on the shelf, because people are more likely to buy mushrooms that look fresher,” advises Thomas Leo, sales and procurement manager at Mother Earth Organic Mushrooms, West Grove, PA. “Make sure you have shelf space, but not so much that the product looks bad.”

Mother Earth Organic Mushrooms started as a dairy farm in 1919 and has grown to more than a dozen greenhouses, including the country’s pioneer organic operation.

The space needed to adequately display all the major mushroom SKUs, while still ensuring the turnover needed to keep the product fresh, depends on the store.

“What makes sense for one retailer would create excessive shrink at another retailer,” says Greg Sagan, executive vice president of sales and marketing at Giorgio Foods, Temple, PA. “Giorgio works with our customers to determine the ideal space to maximize sales and minimize shrink. From Giorgio’s viewpoint, some retailers are using space effectively as mushrooms are an in-demand category. However, Giorgio says a complete category review makes good strategic sense to determine the effectiveness of the use of shelf space. This would include looking at shrink, lost sales and other metrics, which will provide a more complete picture. Space allocation is extremely important in the mushroom category. The retailer should have a feel for what customers want.”

There is a minimum amount of space needed to display a credible mushroom program.

“The optimum amount of space to devote to mushrooms will vary depending on the size of the store, area demographics, and how many varieties are offered,” says Justin Reyes, national sales manager at Gourmet Mushrooms, Sebastopol, CA. “But typically, at least four feet should be dedicated to mushrooms. Be sure to keep an eye on product rotation and keep product in refrigeration whenever possible.”

According to Reyes, Gourmet Mushrooms grows more varieties of culinary and nutraceutical mushrooms than any other farm in the country.

“Understand your store’s mushroom volume and the demographics of that store,” advises Mike O’Brien, vice president of sales and marketing at Monterey Mushrooms, Watsonville, CA. “We want to maximize sales while optimizing the shrink that is part of the business. Carrying a lot of varieties at a low volume store in a price-sensitive neighborhood will result in a lot of shrink and can be prevented by having a variety and set for that store. On the other side, having the right variety at a high-volume upscale neighborhood store will result in great sales and profits.”

Monterey Mushrooms started on a single farm in 1971 and has since grown to include farms coast to coast in order to offer fresh local product everywhere in the country.

“Store sets are based on store volume and shelf capacity,” says O’Brien. “Category management tools are a must. Scanned data analysis and a plan for your stores will provide you with a direction. But measuring those results and tweaking will move you toward optimization.”

It may take a little more space to build a successful mushroom program than to maintain a program that is already established.

“If you want to create a destination, you need a larger space,” advises Donovan. “If you already have a destination, you still need enough space for all the products.”

Store personnel who know how to handle and cook with mushrooms are an indispensable part of the program.

“The training of produce store teammates is critical because they are the people who have the most contact with the consumer,” advises O’Brien. “Enlisting supply partners to teach about how mushrooms are grown and best practices for handling also helps them grow in their jobs.”

All The Right Products

As the mushroom category steadily grows in volume, sharp retailers stay on top of the many different products as they hit the mainstream.

“We have about a dozen mushroom SKUs,” says Jim Weber, produce director at Brillion, WI-based Tadych’s Markets, an independent chain with six full-service supermarkets in Michigan and Wisconsin. “We do an eight-ounce button and a sliced button, an eight-ounce baby Bella and a sliced baby Bella, oyster, shitake, and we just received a new one that’s a gourmet blend.”

Mushrooms are an important enough produce item that Weber carries, and regularly advertises, several products geared to specific uses.

“We have a stuffer that is a little bit bigger mushroom,” he says. “We promote the eight-ounce whole mushroom package to those making a healthier hamburger or meatloaf, and a 12-ounce thicker mushroom that we put out by the steaks because it grills well.”

Even retailers that are a little less ambitious with their mushroom programs would always do well to keep at least a half dozen or so SKUs on display.

“In addition to having sliced and whole mushrooms, a good display will have about five or six varieties – white, brown, Portabella, Shitake, and Oysters,” says Donovan. “I see shitakes becoming more important, especially sliced shitakes. The other ones are very expensive to grow.”

Some stores serve demographics that might be interested in experimenting with some of these more expensive varieties.

“I think the more varieties the better,” says Gourmet Mushrooms’ Reyes. “As a specialty mushroom grower, we’ve definitely seen an increased trend toward more varieties, including wilds, as mushrooms have undergone a significant category expansion in the last year or two,” adds Reyes.

In virtually every market in the country, however, the category has come to mean far more than the traditional, predominant white button mushroom.

“We think varieties are important, and we are seeing consumers expand their mushroom purchases beyond white mushrooms to brown and Portabella mushrooms, as well as specialty and organics,” says Harrison of the American Mushroom Institute.

One Pennsylvania shipper is introducing a product, called Mushroom Crumble, aimed at making use of mushrooms in blends more convenient by offering a container of multiple varieties already cut and ready to be folded into the meat.

“We have it in foodservice and institutions already, and everybody who tries it likes it,” says Alan Kleinman, sales manager at Gourmet’s Finest, Avondale, PA. “I think it has an appeal like cauliflower rice or vegetable noodles. You can combine it with beef or turkey to improve the taste, lower the cost, and add nutrients.”

Gourmet’s Finest is a fourth-generation, family-farming firm that recently developed the ability to deliver mushrooms chopped uniformly and ready to be included in blends.

“We are still fine-tuning the retail package for Mushroom Crumble and hope to have it finished by Easter,” says Kleinman. “It will be an eight-ounce cup. I would love to see it with the mushrooms, but also in the meat department.”

Gourmet’s Finest uses Portobellos, Criminis, buttons, and shitakes in Mushroom Crumble, but the company can also make custom blends, which could be a sign of times to come.

“All value-added produce is growing at retail,” advises O’Brien of Monterey Mushrooms. “It’s all about providing a convenient solution for the consumer. Retailers can take advantage of the mushroom growth by offering solutions to their customers, such as recipes and product information.”

Giorgio is having success with value-added products that offer a combination of convenience and flavor.

“Stuffed Mushrooms are very popular amongst consumers,” says Sagan. “We have a line of ovenable/microwaveable stuffed mushrooms in four delicious flavors: Fiesta Cheese Blend, Cheese and Imitation Bacon Bits Blend, and Artichoke, Spinach and Cheese Blend, and the Imitation Seafood flavor — all of which are offered in a convenient microwavable tray, as well as an RPET tray. These stuffed mushrooms take the prep work out of cooking and are perfect for all entertaining, tailgating and holiday needs.”

A Healthy Program

One of the reasons mushroom sales keep increasing is they can be merchandised as a healthy ingredient.

“For successful results, we encourage retailers to position mushrooms as a great meat alternative as well as a supplement to help extend meat while reducing fat, and saturated fat,” says Sagan. “We certainly think the health and nutritional story of mushrooms provides a great narrative for retailers, as consumers of all ages are looking for healthy food options, and mushrooms rank right there at the top.”

There is a trend toward having success at retail by promoting the nutritional benefits of mushrooms.

“We’re seeing that more and more retailers are touting the health benefits of mushrooms as well as having recipe ideas on the shelf,” says Reyes. “We work with a number of retailers that have increasingly been including recipe ideas on the shelf and on social media.”

Mushrooms are fat-, cholesterol-, and gluten free, low in calories, and they are very low in sodium. They are an excellent source of many nutrients including B-vitamins, vitamin D and potassium, according to the Mushroom Council.

“Produce is the answer for better health,” says O’Brien. “Mushrooms have a great opportunity when it comes to health. Although new benefits are being discovered and studied every day, vitamin D is well known as an essential component of bone health. By helping the body to absorb calcium, vitamin D may reduce the risk of osteoporosis and related bone fractures.”

This fungus grown in relative darkness, ironically, may help make up for the lack of sunshine in many modern daily routines.

“Vitamin D is produced by our bodies when our bare skin is exposed to sunlight,” says O’Brien. “Today, that’s not always possible. With modern indoor lifestyles, sunblock and climates that require skin to be covered up most of the year, it’s not always possible to get enough vitamin D from sunshine exposure alone. Mushrooms specially labeled as being high in vitamin D are the only food in the produce aisle that may help you to boost this important vitamin.”

The Mushroom Council was formed 27 years ago to carry out the mission of promoting mushrooms, helping with merchandising campaigns and disseminating information about their nutritional benefits.

You can use your imagination in how to entice consumers to increase use of mushrooms, because they can be used in dishes commonly served at all times of the day.

“Consumers are more aware of making healthy lifestyle choices,” says Leo of Mother Earth Organic Mushrooms. “A lot of people are buying conventional mushrooms, too, because of their nutritional value, and they are good for every meal. You can have them in scrambled eggs, salads, side dishes, or mixed in with ground meat.”

The versatility of mushrooms makes possible an almost endless variety of cross-merchandising opportunities.

“Cross merchandising is available in many ways because mushrooms are such a flexible ingredient in so many recipes,” says Sagan. “You are seeing mushrooms in meat sections for use in kabobs; located next to peppers, onions and other vegetables for sautés; positioned near the mixed greens and pre-made salads as an ideal complement.”

There are numerous shippers ready to help retailers design their merchandising program. In addition, the Mushroom Council is available to lend a hand.

“Mushrooms continue to be a sought-after item in the produce aisle, for their nutritional benefits along with their versatility in flavor and preparation that work with any kind of healthy eating plan,” says AMI’s Harrison. “Every company has their own relationships with their customers, and we’re not involved. I know the Mushroom Council has a series of initiatives throughout the year growers can use with their marketing plans.”

As a sign there is a growing trend, restaurants and college dining halls are serving more mushroom-blended meats as a healthier option.

“Mushrooms are also trending in the foodservice sector,” says Harrison from the AMI. “The National Restaurant Association named mushrooms the top produce item of 2020 with The Blend named as a trend for 2020. Colleges and universities are also embracing meat and mushroom blends on their menus, with 42% of college dining halls serving mushroom-blended products.”

The increasing awareness of mushrooms as a healthy ingredient in many dishes fueled another year of record-setting sales.

“The value of sales for the 2017-2018 United States mushroom crop was $1.23 billion, up 1% from the previous season,” according to a U.S. Department of Agriculture release in August 2018. “The number of growers, at 307, was down 10 from last season. The average reported price was $1.34 per pound, up three cents from the previous year’s price.”

Organic Mushrooms Growing Fastest

Organic mushrooms have continued to grow at a pace even faster than their conventional counterparts, and they have reached the point that most retailers would do well to consider them as a regular product.

“Growers produced 128 million pounds of mushrooms that were certified organic during the 2017-2018 growing season, 16% above 2016-2017,” according to a U.S. Department of Agriculture release in August 2018. “Sixty-eight percent of the total, or 87.4 million pounds, were sold as certified organic mushrooms. This is up 17 percentage points from the 2016-2017 crop year. Agaricus mushrooms accounted for 83% of the mushrooms sold as certified organic, while all specialty mushrooms made up the remainder.”

For the first time, the organic share of the market has reached double digits. And that number is still increasing.

“The total certified organic sales of all mushrooms represented 10% of the 2017-2018 total mushroom sales,” according to the release.

The pioneer among organic producers has come out with a line of specialty packs and varieties.

“We’ve been coming out with new products like organic medley, oyster and shitakes,” says Thomas Leo, sales and procurement manager at Mother Earth Organic Mushrooms, West Grove, PA. “Organic has been growing a little better than conventional the past 10 years. We were the first organic mushroom farm in the United States 26 years ago, and we’re seeing a good eight-percent growth in organics.”

Even the largest mainstream conventional producers are taking notice of the growing demand for organic mushrooms.

“We’re seeing organics grow quite a bit,” says Kevin Donovan, national sales manager at Phillips Mushroom Farms, Kennett Square, PA. “They’re up three to four percent, and that’s a consistent number.”

The greatest growth in mushrooms may be in products that were an afterthought not long ago.

“Whites and browns continue to dominate the category, but we are seeing double-digit growth in exotics and specialty mushrooms along with organics,” says Greg Sagan, executive vice president of sales and marketing at Giorgio Foods, Temple, PA.