Market for Fresh and Specialty

¶ … Market for Fresh and Specialty Mushrooms Humankind has enjoyed mushrooms for millennia for good reason. Besides their delicate flavors, researchers have confirmed that edible mushrooms typically possess a number of valuable nutritional qualities as well and global demand and consumption have steadily increased in recent years. Moreover, in an era when food shortages are becoming chronic in many countries of the world, some scientists have pointed to mushrooms as a potential sustainable food source for the future.

In this environment, an examination of current and future trends in mushroom production, consumption patterns and marketing considerations is a timely and valuable enterprise. To this end, this paper provides a review of the relevant literature to determine the evolution of the mushroom industry, recent consumption trends and the effects of the global economic downturn on the mushroom industry and what types of marketing efforts are being used. A summary of the research and important findings are presented in the conclusion.

Review and Analysis Evolution of the Mushroom Industry Generally speaking, approximately 10 to 20% of all varieties of mushroom are edible by humans, with around 5 to 10% being known to be poisonous for human consumption (Zamula, 1998). The other 70% to 85% of mushroom variety are not toxic; however, they are not edible because of various qualities such as foul tastes and smells or their textures (Zamula, 1998).

Although the cultivated market remains predominant, there is a significant domestic market, particularly in the United States, for wild varieties of mushrooms as well due in large part to their superior flavors (Zamula, 1998). According to this authority, "Connoisseurs say the taste of morels, sulphur polypores, shaggy manes, chanterelles, and elm, oyster and beefsteak mushrooms is far superior to the most common commercially grown mushrooms" (Zamula, p. 12).

Although a number of efforts were made over the years to cultivate mushrooms, commercial applications only became possible during the 18th century when a Frenchman began using limestone caves near Paris for mushroom cultivation. While a number of technological innovations have been introduced since that time to facilitate mushroom production, caves are still used in many regions because of their superior qualities for mushroom production (Zamula, 1998).

The American Mushroom Institute reports a similar beginning for the mushroom industry in the United States, with most authorities crediting the first efforts to cultivate mushroom commercially being made by growers in New York City and Long Island in 1880 who also used caves but also used cellars as well (Zamula, 1998).

Although efforts at growing mushrooms in greenhouses were also made during this period, it was not until the fin de siecle that successful applications were developed in Pennsylvania, innovations in greenhouse growth techniques for mushrooms that are responsible for the prevalence of the industry in the state today (Zamula, 1998).

Yet other boosts to mushroom production in Pennsylvania occurred in 1926 when a farmer discovered a patch of pure white mushrooms, Agaricus bisporus, that have become the progenitors of the majority of commercially grown mushrooms today; the introduction of air conditions and a reliable spawn used for starting mushrooms also contributed to increased mushroom production during the 1920s (Zamula, 1998). Although Pennsylvania still dominates the domestic mushroom market with fully half of the nation's production, California and Michigan are also important producers (Zamula, 1998).

In addition, it should be noted that Oregon's wild-mushroom industry is worth between $10 million and $100 million annually (Dietz, 2005). This wide-ranged estimate may be low as well, because Dietz points out that there are no reliable statistics available because the wild-mushroom industry is largely cash based. According to Dietz, "Nobody tracks it. Most of the actual purchases from mushroom harvesters are in cash. it's somewhat of a secretive industry. The delicate golden chanterelles are shipped to Europe and to fine restaurants all over the United States. Others go to Japan" (2005, p. 1).

Beyond the foregoing, there is a growing domestic and international market for commercially cultivated gourmet and connoisseur mushrooms as well. For instance, shiitake mushrooms (Lentinus edodes) and other varieties are being increasingly grown in the United States (Zamula, 1998).

Current and Future Trends As a result of increasing global population, humankind is being confronted with three fundamental problems that are especially pronounced in developing nations: (a) a shortage of food, (b) a reduction in the quality of health, and (c) environmental deterioration; however, the global mushroom industry can help address all three of these basic problems (Chang & Buswell, 2008). Not surprisingly, then, consumer demand for mushrooms has increased across the board in recent years.

In this regard, Iqbal, Rodriguez, Mahajan and Kerry (2009) report that, "The global mushroom industry is growing in size and popularity. Higher returns from mushrooms cultivation are noted for all world markets" (p. 298). A recent report from the Mushroom Business Information Center notes that, "A few more mushrooms were sold in the U.S. [in 2010], but because prices were slightly down, the value of those sales was lower. Production of the 2008/2009 U.S.

mushroom crop of 817 million pounds (371 million kilograms) was up 1% from 2007/2008's 813 million pounds (370 million kilograms)" (USA mushroom production increases slightly, 2010, para. 3). These statistics were released in late August 2010 by the U.S. Department of Agriculture's National Agricultural Statistics Service and also noted that because the price-per-pound of $1.17 was one cent less than in 2009, the total value of the mushroom crop, about $957 million, will be approximately $5.5 million less than in 2009 (USA mushroom production, 2010).

Interestingly, the effects of the global economic downturn have not affected the mushroom industry in the same fashion as other specialty food items. Although sales of processed (e.g., frozen, canned and marinated) mushrooms declined slightly during the period from 2009 to 2010, the overall demand for mushrooms continued to be strong, particularly fresh retail mushrooms (USA mushroom production, 2010). According to the report, "Sales of agaricus (white button) mushrooms totaled 802 million pounds (365 million kilograms), up slightly from last season, but 2% below 2006-07" (USA mushroom production, 2010, para. 4).

As noted above, Pennsylvania continues to dominate domestic production of mushrooms and the state was responsible for 65% of the production for 2009 compared to 15% for California (USA mushroom production, 2010). Although revenues for the white button crops declined slightly (1%) from 2009 to 2010, specialty mushrooms experienced strong gains (USA mushroom production, 2010). Other recent trends that indicate the direction of the mushroom market can be discerned from the results of the consumer panel research conducted by the Mushroom Council.

In this regard, the Council reports that the percentage of households that have purchased fresh mushrooms at some point during the previous year continues to increase as shown in Figure 1 below. Figure 1. Percentage of American households that purchased fresh mushrooms in the past year: 1994-2008 Source: Based on graphic in Mushroom consumer panel research, 2008. Although white mushrooms remain the most popular by far, their consumption rates decline slightly from 2007 to 2008 while demand for specialty mushrooms increased as shown in Figure 2 below. Figure 2.

Demand levels for white and specialty mushrooms: 2007-2008 Source: Based on graphic in Mushroom consumer panel research, 2008. Most American consumers tend to purchase between 8 and 10 ounces of mushroom per purchase as shown in Figure 3 below. Figure 3. Purchase levels for mushrooms: 2007-2008 Source: Based on graphic in Mushroom consumer panel research, 2008. Finally, American mushroom consumption has also increased compared to 2005, with almost 60% of consumers having eaten mushrooms within the past week as shown in Figure 4 below. Figure 4.

Percentage of American consumers eating patterns for mushrooms: 2005-2008 Source: Based on graphic in Mushroom consumer panel research, 2008. Marketing Considerations A study conducted by Rose Research (2008) also reports significant increase in demand for mushroom in the United States, but emphasizes that there is much room for additional growth. The study also points out that although mushroom penetration remains low across the country, the spend rate on mushrooms is relatively high, and the typical transaction level is among the highest for such products (Mushroom consumer panel research, 2008).

Although mushroom consumers are distributed evenly across the country, there are some significant regional differences in the types.