Nammex CEO on the ‘shroom boom: ‘I don’t think it’s going to end’
Pre-pandemic, demand for mushroom-based products had been increasing and then skyrocketed in 2020 and 2021. Data from the American Botanical Council’s Herb Market report (HerbalGram #131) showed that sales growth of mushroom supplements in the natural channel ranging from 23 to 40% depending on the mushroom.
Speaking with NutraIngredients-USA, Jeff Chilton, CEO of Nammex, said this ‘shroom boom is continuing, and is not going to end.
“When I started Nammex in 1989, there were literally no mushrooms in the supplements market,” he said. “It’s taken a long period of education. In 2015 mushrooms started trending in every way so our sales were really jumping, but in 2019 and 2020, sales of our products went up 80% both years.”
Chilton added that that has slowed down a little bit, but during the pandemic the company couldn’t keep up with demand and its inventory was depleted.
“I don’t think it’s going to end,” said Chilton. “I think we’re only at the beginning because there’s so much room for mushrooms, which have been used extensively in Asia and other parts of the world. We’re [the West is] just in catch-up mode right now.”
Much of the initial demand was driven by dietary supplements, but that is now changing with food and beverage companies getting in on the action.
“Right now, a lot of our new customers are in the food and beverage space. There are many companies right now, large and small, that are putting out mushroom-based drinks,” said Chilton. “That’s a category that’s growing.”
Growing the team
As a sign of the company’s growth, Bill Chioffi recently joined the company’s management team as Chief Strategy and Innovation Officer. Chioffi is well known to many in the industry having served a 21-year tenure with Gaia Herbs in various roles, concluding with his responsibilities as Vice President of Global Sourcing and Sustainability. Most recently, he was the Vice President of Strategic Partnerships and Business Development for the Ric Scalzo Institute for Botanical Research at Sonoran University of Health Sciences (formerly SCNM).
“I’m no stranger to growth in the herbal category,” said Chioffi. “I managed a supply chain for Gaia Herbs that saw year over year growth for many years. And I think the mushroom category is now experiencing many of the same things that the herbal category experienced with both labeling and the way extracts are made and characterized. And the way they’re characterized for research, oftentimes not well characterized.
“In the innovation category, it’s looking at how we can work with beverage and food companies to make the products mix well, to get some of the dosing correct, to inform them on translatable amounts of extract to whole mushrooms that have been consumed for centuries. There’s many things that will come up as we encounter more customers,” said Chioffi.
Lab build-out and capacity expansions
As reported by NutraIngredients-USA, Nammex brought online a new extraction facility last year to keep up with demand. The company produced around 100 tons of our products in 2021, said Chilton, and the facility can reach a capacity of five times that.
Chilton also noted that the company is also expanding its analytical capabilities.
“Our company is really based around analysis,” he said. “We introduced to the industry beta-glucan testing – nobody was testing beta-glucans until we brought that in and that’s become an industry standard. We test for ergosterol, ergothioneine, which is a very interesting compound. And now we’re bringing in HPTLC into the lab.
“We’re creating the standards for the industry, and that’s something I feel is really important. There are lots of products out there masquerading as mushrooms that really aren’t and that’s something we’ve had to deal with all these years.”
