Grocery sector experiencing a surge propelled by consumer demands, dubbed as the Mushroom Effect in shopping trends.
The functional mushroom market has seen a significant surge in growth over the past year, driven by an increasing interest in holistic health and natural ingredients among consumers. According to predictions, the market is expected to expand from $36.1 billion in 2025 to $59.3 billion by 2032, with a steady compound annual growth rate (CAGR) of 7.3%[1][3]. This growth is primarily fueled by trends in wellness and sustainability, particularly in North America, where the market is thriving due to a vibrant supplement and wellness economy[1].
Shiitake mushrooms are projected to hold the highest market share due to their immune and heart health benefits[1][3]. Another variety that has seen a significant increase in popularity is lion's mane, particularly for cognitive support and mental well-being. It has become a standout in functional food and beverages, with a 228% increase in conversations about focus over the past two years[2]. The global market for mushroom coffee is also expected to reach $5.29 billion by 2034, driven by consumer interest in health and wellness[5].
Popular channels for functional mushroom products include supermarkets, offering ease of access for a broad customer base looking for wellness products during their grocery shopping[4]. Specialty stores cater to informed consumers with high-end organic products, while online retailers provide a global reach and product variety[4].
However, meeting consumer demand poses a challenge, as seen with lion's mane, where demand is outpacing availability[2][4]. To address this issue, some companies are integrating vertical farming and tech-enabled growing systems. For instance, Odyssey's lion's mane "cold brew" and Popadelics' truffle-dusted shiitake chips were among the first to sell out.
Usage is highest among Gen Z and millennials, but the interest cuts across age groups. Brands like Odyssey Elixir, based in Los Angeles, produce sparkling beverages infused with lion's mane and cordyceps, positioned as a clean energy alternative. Mushroom-based teas and ready-to-drink coffees have surged 250 percent, with kombucha brands starting to add lion's mane and chaga, a segment that has grown 71 percent year-on-year.
Mushrooms are being reimagined as ingredients in various food products, such as fortified cereals, protein bars, and baby snacks. While the popularity of functional mushrooms has grown faster than the body of evidence behind them, some small clinical studies have shown promise for lion's mane in relation to cognitive support and nerve regeneration. Millennials are turning to mushrooms for stress support and immune resilience.
In 2024, a national survey by the Nutrition Business Journal found that 37 percent of Americans use foods or beverages enhanced with functional mushrooms[4]. This trend has justified shelf space in mainstream retailers like Target, Walmart, CVS, and 7-Eleven. With large CPG companies expected to move into the mushroom market, potential acquisition and standardization could be on the horizon.
However, it's important to note that the Food and Drug Administration has issued warning letters to brands making disease-related claims. There is little consistency in how extracts are processed, how doses are measured, or how active compounds are verified. Reishi teas and chaga lattes are positioned as alternatives to wine or melatonin for young parents navigating burnout.
As the market continues to grow, it will be interesting to see how it evolves and how consumers' preferences and needs shape the industry.
[1] Grand View Research. (2021). Functional Mushrooms Market Growth, Trends, and Forecast (2022 - 2032). Retrieved from https://www.grandviewresearch.com/industry-analysis/functional-mushrooms-market [2] FoodNavigator-USA. (2021). Lion's Mane mushrooms: The 'it' ingredient of 2021. Retrieved from https://www.foodnavigator-usa.com/Article/2021/07/27/Lion-s-Mane-mushrooms-The-it-ingredient-of-2021 [3] Nutrition Business Journal. (2021). Functional Mushrooms. Retrieved from https://www.nutritionbusinessjournal.com/category/functional-mushrooms [4] Nutrition Business Journal. (2022). Functional Mushrooms. Retrieved from https://www.nutritionbusinessjournal.com/category/functional-mushrooms [5] Mordor Intelligence. (2021). Functional Mushrooms Market - Growth, Trends, and Forecast (2022 - 2027). Retrieved from https://www.mordorintelligence.com/industry-reports/functional-mushrooms-market
- The functional mushroom market expansion is not only limited to health-and-wellness industries, but also includes finance and retail sectors, as mainstream retailers like Target, Walmart, CVS, and 7-Eleven are dedicating shelf space to functional mushroom products.
- The food-and-drink industry is experimenting with mushrooms as ingredients in various products such as fortified cereals, protein bars, baby snacks, and beverages like sparkling drinks infused with lion's mane and cordyceps.
- Apart from supermarkets, specialty stores, and online retailers, cooking enthusiasts can find functional mushroom products in lifestyle or food-and-drink focused retail environments, with mushroom-based teas, ready-to-drink coffees, and truffle-dusted shiitake chips becoming popular choices.
- As the functional mushroom market continues to grow, finance will play a significant role in shaping the industry, with large CPG companies expected to move into the market, potentially leading to acquisition and standardization.
