Functional Mushroom Market Size And Share Report, 2030

Functional Mushroom Market Size & Trends

The global functional mushroom market size was valued at USD 31.71 billion and is anticipated to experience a compound annual growth rate (CAGR) of 11.2% through 2030. This growth is largely influenced by the rising recognition of functional mushrooms as superfoods, thanks to their extensive health benefits. These mushrooms have found their place in healthcare and pharmaceutical products, leading to a projected increase in demand over the forecast period. Additionally, their broadened application in the pharmaceutical sector as health supplements further propels industry advancement.

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However, the pandemic disrupted the industry’s supply chain. The temporary closure of food manufacturing and processing facilities to ensure worker safety impacted production capabilities. Furthermore, the global lockdown created hurdles in raw material procurement, due to restrictions on international trading activities. Shipment delays resulted from movement restrictions, leading to a shortage of raw materials and increased prices, which ultimately raised the cost of functional mushrooms. Nonetheless, pandemic-induced health concerns accelerated demand for functional mushrooms due to their immune-boosting properties, positively influencing the global sector.

Recently, there has been a growing trend towards high-protein diets as consumers become more health-conscious. The increase in packaged food consumption, driven by busy lifestyles, is expected to support industry growth. To capture health-focused consumers, manufacturers are fortifying food products with nutritious ingredients, such as functional mushroom extracts or powders. The current protein production from livestock is harming our planet's ecosystems. The alarming rise in livestock production leads to significant greenhouse gas emissions, creating urgent sustainability challenges.

Breaking away from traditional protein sources has gained momentum, expected to encourage industry growth in the years to come. Plant-based diets are becoming increasingly popular, especially among young individuals passionate about animal welfare and environmental considerations. According to research conducted by the Alliance for Science and Kansas State University, about 10% of Americans aged 18 and over identified as vegetarian or vegan as of January 2023. The future anticipates functional mushrooms being integrated into various medicinal and health products, expanding their applications within the food and beverage sectors. Additionally, their incorporation as functional ingredients in the pharmaceutical and nutraceutical fields continues to drive industry expansion.

In recent years, the trend of functional mushroom extracts has surged, fueled by interest in natural health alternatives. More consumers are gravitating towards concentrated and potent forms of functional mushrooms, such as Reishi, Lion's Mane, and Cordyceps available as extracts. This trend is discernible in diverse offerings, including tinctures, powders, and liquid extracts, with their convenience and versatility making it easy to integrate into daily routines, via beverages, smoothies, and other culinary applications.

Numerous scientific studies suggest that consuming functional mushrooms and mushroom-derived products enhances immune system performance, contributing to market expansion. However, the challenge arises due to the short shelf life of functional mushrooms, typically lasting one to three days, attributed to their high water content. Therefore, handling post-harvest transportation and storage is vital for maintaining a functional mushroom value chain. Even superior quality mushrooms can suffer when transportation practices falter, diminishing the product's end value. Notably, various mushroom types, including paddy straw mushrooms, have an extremely short lifespan of a few hours, necessitating prompt processing, preservation, or refrigeration post-harvest to mitigate losses. This may impact market growth.

The medicinal mushroom market has been gaining traction due to its myriad health benefits. Some advantages of functional mushrooms include immune support, particularly from varieties such as Reishi, Shiitake, and Turkey Tail that demonstrate immunomodulatory effects. Lion's Mane is linked to cognitive enhancement, potentially improving memory and focus. Meanwhile, Cordyceps is recognized for its potential in enhancing energy and endurance, making it attractive to athletes. Furthermore, various functional mushrooms, like Chaga and Maitake, are rich sources of antioxidants, aiding protection against oxidative stress, whereas Reishi is commonly associated with stress relief and relaxation.

Market Concentration & Characteristics

The functional mushroom market exhibits considerable innovation and diverse product offerings aimed at catering to evolving consumer needs. Companies have been extending beyond traditional supplement formats, introducing functional mushrooms in convenient forms such as capsules, powders, tinctures, and infused products like coffee and teas. The rise of mushroom blends, expertly tailored to address specific health concerns, showcases a trend towards personalized wellness solutions. Integrating functional mushrooms into everyday products like coffee and snacks provides consumers with accessible methods to incorporate these health-enhancing ingredients into their routines. Emphasizing sustainability and organic sourcing caters to the increasing demand for ethical practices.

Many companies are strategically acquiring smaller and medium-sized firms to strengthen their market position and broaden their international reach. Over the next few years, established companies are likely to target acquisitions of smaller entities operating in this industry to facilitate regional expansion.

Regulations play a crucial role in shaping the functional mushroom supplements market, influencing key aspects of the industry. Establishing rigorous quality and safety standards ensures products adhere to specific criteria, upholding consumer health and confidence. Strict regulations regarding labeling and marketing claims facilitate transparent information dissemination and prevent misleading practices, empowering consumers with accurate product details. Adhering to Good Manufacturing Practices (GMP) is essential for maintaining consistent quality, fostering trust and reliability. Where applicable, product registration and approval processes underscore the necessity of safety and efficacy evaluations before market entry. The varying regulatory environments impact international trade and market accessibility, necessitating compliance with diverse standards.

Product Insights

The shiitake product segment has maintained dominance, capturing nearly 34% of the market revenue. This can be attributed to increasing demand for its nutritional and medicinal properties, including immune-strengthening, cardiovascular health promotion, weight loss support, and energy enhancement. Shiitake mushrooms are widely used in both the food and dietary supplements industry. Their umami-rich flavor makes dried shiitake mushrooms particularly popular among global consumers, as both fresh and dried forms find usage in stir-fries, soups, stews, and various Asian cuisines.

Conversely, the reishi segment is projected to achieve the highest CAGR in the forecast period. Reishi mushrooms are lauded for boosting the immune system, impacting white blood cells, and enhancing overall immune function. Beyond immune benefits, reishi mushrooms can reduce fatigue and address depression. Additional potential health benefits encompass improved heart health, blood sugar regulation, and antioxidant properties in food and dietary supplement applications. Such factors are anticipated to catalyze segment growth in the years ahead.

Application Insights

Based on applications, the industry is segmented into food & beverage, dietary supplements, pharmaceuticals, and other sectors. The food and beverage segment led the global market in 2022, contributing 41.9% of overall revenue. Changing consumer lifestyles, increasing urban populations, and rising disposable incomes prompt consumers to pursue healthier eating habits. Consequently, the global demand for functional mushroom-infused foods and beverages continues to rise.

As a result, the global food processing sector is capitalizing on this trend, positively impacting the demand for functional mushrooms in the coming period. The pharmaceutical application sector is expected to register the fastest CAGR from 2023 to 2030. Functional mushrooms are rich in numerous bioactive compounds, including antioxidants, flavonoids, quercetin, baicalein, polyphenols, polysaccharides, triterpenes, proteins, amino acids, and organic germanium. Therefore, functional mushroom extracts are key ingredients in formulating medicinal or supplement products aimed at addressing diabetes, hypertension, insomnia, vitality, cancer, and hypercholesterolemia. Such attributes will likely drive segment growth during the anticipated timeframe.

Functional mushroom supplements have gained immense popularity, stemming from heightened consumer awareness surrounding their health benefits. Recognized for their adaptogenic properties, functional mushrooms such as Reishi, Chaga, Cordyceps, Lion's Mane, and Shiitake are being seamlessly integrated into various wellness routines, with blended varieties offering a wider array of health advantages.

Regional Insights

The North America functional mushroom market is projected to grow at a CAGR over 12% through 2030, driven by the increased popularity of these mushrooms as superfoods. Functional mushrooms are gaining traction in developed regions as they present a superior alternative to numerous nutritious food options. Additionally, the state's growing consumer awareness regarding overall health and wellness will further bolster the region's growth.

The rising inclination towards vegan diets is also set to surge demand for functional mushrooms in North America. The Asia Pacific region dominated the market in 2022, primarily due to high mushroom cultivation in China. The significant demand for functional foods in this region is based on the mushrooms' health-providing potential. Furthermore, there is a great appetite for functional mushrooms in the Asia Pacific food and beverage sector due to their integration into daily diets as a nutritious food source.

The Europe functional mushroom market is anticipated to experience a CAGR of 11.4% during the same timeline. The global shift towards holistic wellness and the exploration of traditional remedies are contributing to the acceptance of functional mushrooms within preventive health practices. The functional mushroom market in the UK is expected to witness a CAGR of 11.5% through 2030.

India Functional Mushroom Market

The functional mushroom sector in India is set to grow at a CAGR of 10.9% through 2030, fueled by the traditional use of mushrooms in Ayurvedic medicine, fostering awareness and acceptance among the local population.

U.S. Functional Mushroom Market

Growth in the U.S. functional mushroom sector is driven by scientific validations of mushrooms' traditional uses and the exploration of their therapeutic properties. Innovations in product formulations, including mushroom-infused supplements, beverages, and food products, have been vital in broadening accessibility to functional mushrooms for American consumers.

Germany Functional Mushroom Market

The German functional mushroom market is currently experiencing growth, bolstered by an escalating focus on health and wellness, with consumers gravitating towards natural and plant-based solutions to support their well-being.

Key Functional Mushroom Company Insights

Leading players are heavily investing in research and development to foster new product creation while extending their distribution networks.

Recent Developments

• In November 2022, South Mill Champs, a North American grower of fresh and functional mushrooms, completed the acquisition of World Fresh Produce, a worldwide firm focused on sourcing fresh produce. This strategic acquisition enhances South Mill Champs' visibility in the market, leveraging its mushroom expertise alongside World Fresh Produce's specialty in unique produce items.

• In September 2022, American rapper and singer Wiz Khalifa launched MISTERCAP'S, in collaboration with Red Light Holland, promoting healthy living through the incorporation of mushrooms. The brand is characterized as a "mushroom-centric brand promoting health through natural organic mushrooms."

• In August 2022, Applied Food Sciences Inc. (AFS) announced a strategic partnership with K&P Biotech, a Finnish firm renowned for its expertise in fungi cultivation and research. This venture includes AFS making an equity investment and aims to diversify AFS' primarily botanical lineup by adding functional mushroom extracts sourced from Nordic cultivation. The goal is to meet the growing demand in the functional mushroom industry through collaboration with a mycology-focused company, thereby ensuring top-quality ingredient supply for product formulators.

Functional Mushroom Market Report Scope

Global Functional Mushroom Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels while offering insights into the latest industry trends and opportunities in each sub-segment from 2023 to 2030. For this study, Grand View Research has categorized the global functional mushroom market report based on product, application, and region: