After 24 consecutive months of solid growth, mushrooms have become the superstar of the produce department.
While sales of other produce were flat in 2009, fresh mushrooms were the best performing vegetable among the top 20 retail categories, with sales up 6%, according to FreshLook Marketing data.
This strong showing helped propel retail sales nationwide by nearly $800 million, excluding club stores and supercenters. In pounds, mushrooms were up nearly 8%.
And the good news continues, with sales up by 6.4% in pounds in the first five months of 2010, accounting for more than $400 million in fresh mushroom sales, said Tom DeMott, chief operating officer for Encore Associates, a research firm based in San Ramon, Calif.
“Even in the depths of a recession, this continued growth has been phenomenal,” DeMott said.
The only segment that hasn’t grown is organic mushrooms, he said, which are down slightly from last year, from a 3.1% to a 2.9% share of the market.
A vitamin superpower
The researcher thinks the mushroom’s new status as a nutrition powerhouse and one of the few natural sources of vitamin D has contributed to its success. And mushrooms, particularly portabellas, have been promoted as a healthy substitute for meat.
“We’re in the middle of a long-term process to reposition mushrooms,” said Gary Schroeder, director of Dole Mushrooms at Oakshire Mushroom Farm in Kennett Square, Penn.
“We’re no longer something that tastes good on steak but there’s nothing in it.”
Vitamin D’s much touted benefits, from helping people absorb more calcium to helping prevent disease, have prompted many companies to highlight the vitamin on their package even if they’re not yet using technology to enhance their mushrooms.
“Changing the label does give us more of a marketing edge,” said James Sweatt, director of sales for Kitchen Pride Mushroom Farms in Gonzales, Texas.
Strong retail sales
The fragile economy may be hard on foodservice sales, but it’s keeping more consumers preparing food and eating at home, where they’re discovering the versatility of mushrooms.
“Mushrooms continue to be an impulse item,” said Paul Frederic, senior vice president of sales and marketing for To-Jo Mushrooms, Avondale, Penn., “but with all the cooking shows they’re more top of mind, and people are aware of their different flavors and textures.”
Retailers, in turn, are promoting mushrooms more heavily because fungi are almost three times the price of other produce per pound, DeMott said. Since they’re usually served with other ingredients, mushrooms in a shopping basket are almost guaranteed to generate sales of other items.
Whether farms can continue meeting this growing demand remains to be seen, said Kevin Donovan, national sales manager for Phillips Mushroom Farms in Kennett Square, Penn.
“The market’s in a bit of flux now,” Donovan said.
“In the last few years we’ve lost farms in Pennsylvania and Florida. We may see an increase in demand for the fall that will leave us with not enough product.”
On the bright side, he said Phillips’ new Dutch-style facility is providing mushrooms of better quality than expected, with a longer shelf life.
Growers are facing higher costs across the board, Sweatt said.
“Corrugated boxes went up 8%, tills went up 6% and film went up 10%,” he said.
“We’re containing costs and trying to make ourselves more efficient to increase our bottom line.”
Pennsylvania growers, who produce 65% of the nation’s mushrooms, are bracing for Jan. 1, when state rate caps on electricity are set to expire, forcing owners of climate-controlled mushroom houses to shop around for the best rate.
“It means everybody and his brother becomes an energy supplier or broker,” said Fred Recchiuti, general manager of Basciani Mushroom farms, Avondale.
“We’re navigating a new frontier — it’s challenging to learn the process, choose a supplier then time the market.”
Exotic mushroom growers and distributors, meanwhile, face their own challenge from a flood of inexpensive Asian imports.
“Our competitors are the imports, which are normally a lot larger in summer,” said Dylan Anderson, president of Oceanside, Calif.-based shipper Kinoko Co., which distributes maitakes, beech and king trumpet mushrooms.