Speaking at the recent NutraIngredients editorial webinar on Mind Health Modulation, Eric Puro, CEO of biotechnology company KÄÄPÄ Biotech, said that functional mushrooms represent one of the fastest-growing segments in the nutraceutical market, achieving a compound annual growth rate (CAGR) of 30% in the United States in 2023.
He noted that the category has become the fourth-largest in the ingredient space, a growth attributed to consumer demand for cognitive health products. Notably, brands like PepsiCo’s Rockstar Energy are integrating mushrooms like lion’s mane into products, based on consumer feedback.
And as Puro explained, social media platforms, particularly TikTok, continue to amplify consumer interest, with influencers and grassroots discussions raising awareness about their benefits.
What does the science say?
As mushrooms gain attention for their cognitive, neurological and overall health benefits, the science must match the growing consumer interest, Puro said.
Lion’s mane is known for its ability to promote neurogenesis, enhance cognition and boost mood. Short-term human trials have highlighted immediate improvements in memory and focus, making it a potential alternative to caffeine for mental performance.
Furthermore, long-term studies have demonstrated increased brain nerve cells, showing promise in applications for chronic conditions like Alzheimer’s and Parkinson’s.
While lion’s mane is the best known in the cognitive health space, other species are now garnering scientific attention.
Reishi has been found to improve sleep quality and neurological recovery, chaga has been linked to longevity and cellular health, and maitake may balance hormones and support metabolic health.
These dual forces—customer demand and robust science—create a powerful recipe for success, Puro said.
Challenges and opportunities
Despite their popularity, functional mushrooms face significant challenges, one of which is product authenticity.
A recent study from authors in Italy found that several top-selling functional mushroom products on Amazon did not meet DNA authenticity standards, and another found that 25% of specimens had no detectable quantities of the stated substances.
Additionally, quality control remains an issue, with heavy metal contamination and inconsistent potency raising safety concerns.
Finally, there are regulatory gaps, as clear benchmarks and testing standards continue to evolve. As Puro explained, he and other industry leaders are collaborating with regulatory bodies like the FDA in the United States and EFSA in Europe to establish transparent quality standards.
“Companies with reliable, transparent supply chains and adherence to scientific integrity are expected to thrive long-term,” Puro said. “Conversely, brands relying on misleading claims and unverified sourcing are likely to fade as the market matures.”
He added that KÄÄPÄ Biotech will next be exploring how to incorporate mushrooms into entirely new product categories.
However, several things are needed to make it work: lower effective doses, improved bioavailability, enhanced extraction technology and making mushrooms more soluble for food and beverages.
“Once we perfect packaging, I expect this market to explode with diverse delivery methods,” Puro said.
Future directions
As functional mushrooms move from niche markets to mainstream wellness, the focus will be on innovation and accessibility, Puro noted.
“I’m particularly excited about expanding beyond the mushroom species commonly used in traditional medicine,” he said. “These species have been popular for 3,000 years, but they’re not necessarily the best or most suitable.
“There are thousands of fungal species to explore, and I’m eager to hunt for new strains, develop growing and extraction protocols, and bring fresh species to market each year.”
He stressed that safety and toxicity trials are crucial for these new species. Establishing that these mushrooms will not interfere with cell lines is a difficult but necessary process, involving regulatory approvals like novel food applications and FDA-approved GRAS (Generally Recognized As Safe) status.
“Developing clinical evidence will take time and money, but it’s our responsibility to keep moving forward and not stagnate,” Puro said.