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Magic mushrooms: the next big thing in beverages?

The shroom boom is in full effect. Many US consumers have readily embraced adaptogenic mushrooms – known for boosting immunity, relieving stress and other health benefits. Now these functional fungi are sprouting up across the beverage category, which is in the midst of an innovation explosion. Here’s why a mushroom-based beverage just might end up in your refrigerator soon.

The beverage category is becoming a veritable forest full of mushroom lattes, coffees, seltzers and energy shots. Adaptogenic mushrooms are in vogue right now. So is beverage innovation and exploration. The younger generations’ willingness to seek out and try functional, non-alcoholic beverages (including those laced with CBD) is driving the creation of a flurry of new products, all vying to become the next big thing.

The shroom boom in the beverage category is reaping the benefits of all of these macro trends.

Adaptogenic mushrooms most certainly aren’t new. Ancient cultures have long touted the benefits of mushrooms, be it chaga (boosts immunity), lion’s mane (improves cognitive ability) or reishi (relieves stress). These species are not to be confused with psychedelic mushrooms, which are banned in the US. That being said, the benefits of magic mushrooms’ active ingredient, psilocybin, is currently being studied for the treatment of depression and addiction to alcohol.

The mushroom market could reach an estimated $3.5bn in the US by 2027. The legal fungus is now a featured ingredient in jerky, butter, chocolate, protein bars, powders and capsules, as well as beverage products.

Beverages, in particular, may prove to be an area of rapid growth. The beverage marketplace, known for wild experimentation, is the midst of an innovation renaissance. Many colorful entrepreneurs, and their investors, are looking to be the next Vita Coco, Vitaminwater or Red Bull. They hope their concoctions will catch not only consumers’ eyes, but also those of Coca-Cola and PepsiCo. The goal for most beverage upstarts: score a hit and get bought.

That’s why you’re now seeing mushroom beverages now available from Califia Farms, Curious Elixirs, Earth and Star, Four Sigmatic, FreshCap, Health-Ade, Rebbl, Rowdy Mermaid and Woke Up energy shot, with many more likely on the horizon.

Meanwhile, other new categories, like nootropics (Breinfuel, Goat Fuel by Jerry Rice) and a flurry of low- and zero-alcoholic brands (such as Seedlip and Kin), have exploded on to the scene as well.

And then there is the coming of cannabis-infused beverages. As the US accelerates the legalization of marijuana, cannabis brands have been experimenting with delivery mechanisms including candy, cookies and drinks. CBD beverages – the sale and use of which have been legal in all US states since 2018 – have proven especially popular for consumers looking to take the edge off, with Recess sparkling water, Kickback lemonade and Mary Joe Coffee all arriving on the scene.

“There’s so much going on right now. It’s a functional beverage gold rush,” says Duane Stanford, editor of Beverage Digest. “What got mushrooms quickly moving up the chain is the fact they get around a lot of the hurdles you see with CBD. They don’t have the same regulatory overhang. Mushrooms are generally recognized as safe under FDA guidelines. As long as you aren’t saying it’s going to cure cancer, you can make claims like, ‘It assists with anxiety and reduces inflammation.’”

Two brands taking opposite tacks

Earth and Star co-founders Zoe Sakoutis and Erica Huss are hoping to repeat history. They’ve succeeded in beverages before, having sold their cold-pressed juice product, BluePrint, to Hain Celestial. Now they’re touting their coffee as ‘everyday adaptogens’.

The brand’s strategy isn’t to create a new category but rather to enhance an existing one. “We’re focusing on habits people already have, versus creating new ones. That’s why we started with canned lattes and coffee,” says Sakoutis. “It tastes great, and people don’t have to step outside of their daily routines to reap the benefits.”

Earth and Star comes in four flavors – black, cacao, matcha and turmeric – and offers a ‘true therapeutic dose’ of 2000 milligrams of functional mushrooms including chaga, cordyceps, lion’s mane and reishi (see the sidebar for more on mushroom functionalities).

“Functional mushrooms have been around for a millennium, but they had been very fringe. Now we’re putting them in a format that’s very convenient. There’s nothing more convenient than cracking open a can,” says Sakoutis. Its optimistic tagline: “The future is fungi.”

Earth and Star is sold direct-to-consumer and will be available on Amazon within the month. It can also be found at select natural retailers in parts of California and New York as well as Chicago, Dallas and Washington, DC. Additionally, the brand will be hosting pop-up experiential retail opportunities in key cities throughout the summer.

Rowdy Mermaid, which launched its mushroom-based line on March 31, is taking a different approach. It has created a line of four ‘adaptonics’: strawberry holy basil, chamomile lime, ashwagandha blackberry and matcha vizu. Each contains high concentrations of beta-glucans derived from reishi mushrooms, without actually tasting like mushrooms – so you don’t need to be a mycophile to enjoy.

Rowdy Mermaid debuted in Whole Foods in the Rocky Mountain region last week. It is hoping the product will achieve national Whole Foods distribution like its kombucha drinks. The beverages will also be available at Sprouts Farmers Market stores beginning May 17 and can be purchased online.

“It’s a sparkling immunity tonic made with reishi mushrooms, but you’d never know,” says Rowdy Mermaid’s director of marketing Sheila Rosen. “Mushrooms can be polarizing to some people – they either love them or hate them. This product is pleasing to everyone’s palate. We are leveraging ancient wisdom with modern delights.”

The brand will be relying on paid and organic social media and an influencer marketing campaign to get its “big on immunity, delicious by design” message out to the marketplace.

Millennial and Gen Z habits brings hope

There are plenty of trends working in favor of mushroom beverages and other elixirs, especially when it comes to millennials and gen Zers. The first is the fact that many aren’t looking to alcohol for answers. Instead they are exploring other avenues for refreshment and efficacy.

“Many millennials don’t like to drink, but they are social. So you’re seeing a sprawling agglomeration of sometimes conflicting subsegments,” says Gerry Khermouch, editor of Beverage Business Insights. “Some are an alcohol alternative suitable for sipping at a bar, while others claim to offer an array of benefits – which may be bullshit or not – and then there’s CBD and THC in the background, which are tried-and-true ways of getting stimulated.”

What do adaptogenic mushrooms do?

There are many mushrooms that possess their own ’superpowers’. Here are some of the more common fungi and what they are known for, according to experts:

Chaga: Immunity balancer, anti-inflammatory

Cordyceps: Stamina, endurance, libido

Lion’s mane: Concentration, focus, cognitive function

Maitake ’Hen of the woods’: Immunity booster, anti-inflammatory

Reishi: Stress and anxiety relief, immunity booster

Shitake: Immunity booster, skin enhancement

Tremella ’Snow mushroom’: Benefits for hair, skin and nails

Turkey tail: Immunity booster, anti-cancer properties

Younger consumers are also big on discovery – especially when it comes to finding new brands on social. “You can call consumers fickle or exploratory, but they are just all over the place. They want to find the next cool thing, share it on social and tell their friends about it,” says Stanford. “Although there’s only a handful of these products that will go on to be something meaningful.”

As the world (and wallets) open up, one would think that more opportunities will abound for these eager upstarts. However, Ken “beverage whisperer” Sadowsky, US beverages adviser to Verlinvest, says there will be a reckoning.

“There are so many different things going on right now. The pendulum that swings back and forth between fear of investing and greed is on the greed side right now. Tiny brands with a smart idea and DTC plan can get a bit of funding and then you see them on Instagram or TikTok. This short-attention-span theater will be downfall of brands that are ‘fake it ‘til you make it’. There will be no more faking it when the real world comes back.”

At the same time, the brands that end up leading the pack could receive lucrative payouts. “Coke and Pepsi absolutely have people paying attention to functional mushrooms and the potential there,” says Stanford. “They’ll want to have a relationship with someone who has built meaningful enough distribution and can show they have staying power.”

No matter what, this space will be a fun one to sit back, have a relaxation beverage of your choice, and watch.

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