MUSHROOMING REVENUES

LIZA B. ZIMMERMAN

With portabellas leading the way, sales of many specialty mushrooms have taken off across the country, according to retailers and other industry sources.

The growth in mushroom sales generally is being tied to better availability and to the spread of interest and knowledge among consumers about the different varieties within the category and their uses in cooking.

"Mushroom sales are increasing due to changing eating habits," said Vince Conti, produce buyer for Food Emporium, based in New York. "People are eating more produce and less meat."

"Education and availability are driving mushroom sales," said Mark Mulcahy, president of Organic Options -- a produce consulting firm based in Glen Ellen, Calif., and also the produce buyer for Good Nature Grocery, Walnut Creek, Calif.

"Restaurants are using them more in cooking, which filters out to the local marketplace and there are starting to be more articles [about mushrooms] in the newspaper," said Mulcahy, echoing the sentiments of several retailers.

Tony First, produce manager at the Giant Eagle unit in Meadville, Pa., agreed the popularity of specialty mushrooms in supermarkets could be partially attributed to the fact that "people are reading more and more magazines that have exotic mushroom recipes."

Thus more and more mushrooms are popping up on store shelves, and some varieties continue to gain in popularity. However, some haven't had widespread success, because consumers are less familiar with them or are wary of their high price points.

The volume of sales for commercially grown specialty mushrooms from July 1996 to June 1997 increased to 10.5 million pounds, a 19% increase over the previous 12-month period, according to a report from the National Agricultural Statistics Service, part of the U.S. Department of Agriculture, Washington.

Agaricus, or button, mushrooms, the types traditionally offered by supermarkets before the current trend in exotics, showed a slight decrease in the same time period.

Retailers interviewed by SN said overall mushroom sales in fresh produce departments, and especially specialty mushroom sales, have shown big increases over the past year.

Giant Eagle's First said he had seen mushroom sales increase 15% to 20% over the last year.

Mulcahy of Organic Options said Good Nature Co.'s sales of oyster and shiitaki varieties had increased 25% over the past year.

David Bennett, an owner of Palo Alto, Calif.-based independent Mollie Stone's Markets, reported he had seen a 20% increase in specialty mushroom sales over the past three to four years.

Retailers also said they are carrying an ever-widening assortment of exotic mushrooms, to keep pace with the growth in consumer interest.

"People are going out on a limb with new varieties -- and liking it," said Peter Polivka, a produce clerk at Capers in Vancouver, British Columbia.

"Last year we carried 10 different varieties and now we carry 15 to 20," said First at Giant Eagle.

Michael Diedrick, produce manager at Andronico's, San Francisco, said the retailer's stores carried at least 15 different kinds of mushrooms.

Still, portabellas have continued to prove themselves the star of the exotic mushroom crop, most sources said.

Giant Eagle's First, for example, said portabellas were what was really driving the mushroom category. "They are phenomenal. Everyone loves them."

Andronico's Diedrick said he had seen at least a 15% increase at his store in portabella sales alone, and that variety accounted for one-third of his total mushroom sales.

Food Emporium's Conti said, "Maybe 9% [of our total mushroom sales] are portabella, and they are not cheap." He said his operation sold three kinds of portabellas.

While other relatively well-known specialty mushrooms, like shiitake and oyster, have been selling briskly, retailers said some of the wild and more obscure varieties have been harder to move because of lack of consumer familiarity.

"There probably needs to be more customer education given to the mushroom category," said Mollie Stone's Bennett.

And Giant Eagle's First concurred that a lack of familiarity with specialty mushrooms was an issue, and that the varieties needed aggressive support to move. "If I'm out there, they'll buy them, but if there's no one out there then it's hard to get them to buy it."

And, "Price is a big issue to the customers," he added.

"People don't want to take a chance if it's pricey," concurred Caper's Polivka.

Organic Options' Mulcahy said competitive pricing can, and does, help move less familiar types of mushrooms. "Instead of charging $5.99 or $6.99 for shiitake, I'll charge $3.99." Mulcahy suggested putting recipes out alongside the varieties "so people have something to work from" as another way to combat consumers' lack of knowledge about certain kinds of mushrooms.

Giant Eagle's First said he does offer literature about mushrooms in the produce department. Also, in order to teach consumers more about specialty mushrooms, he often does demonstrations with them when he has time.

Consumer research organization NPD Group, Rosemont, Ill., sees another obstacle mushrooms face as a category. "Its eggs are pretty much in one basket," said Michael Schiff, a project director at National Eating Trends, which is a service of NPD Group.

Twenty-five percent of mushrooms are used in salads, according to NPD Group panel data from 2,000 households that record their food purchases. "That dish isn't an easy dish to make," said NPD's Schiff. "Convenience is the biggest issue and making things from ingredients is not convenient."

Contrary to the positive sales figures reported by the retailers interviewed by SN, NPD data suggests mushroom consumption is slowly eroding. Per capita mushroom consumption decreased from 5.1 times annually in 1995 to 4.4 in 1997, according to NPD panel data.

Organic Options' Mulcahy said there is a remedy to that potential obstacle as well. "If people aren't going to use them [raw] then you create other avenues to use them cooked."

Despite the conclusions on overall consumption trends reached by NPD Group, other industry sources said new varieties of mushrooms are being marketed in different ways, which is leading to expanding methods of consumption, such as using mushrooms as meat substitutes and using them in a wider range of dishes.

Thirty-two percent of mushrooms are used in combination dishes, for example, such as Italian and Mexican recipes, according to NPD Group data on usage patterns. Six and a half percent are used on pizza and close to 13% are consumed raw.

Retailers said the merchandising flexibility of mushrooms affords them a variety of opportunities for cross merchandising.

Mollie Stone's Bennett said he cross promotes dry and fresh mushrooms and, in addition, "we put variety mushrooms in with regular mushrooms."

He said variety mushrooms also turned up on skewers in the meat department.

"We merchandise them in the meat department next to the steaks and put them in the salad bar," said Food Emporium's Conti.

"We sometimes cook up portabellas and tie in produce items," said Andronico's Diedrick. And the meat department uses "mushrooms to put on shish kebabs."

Canadian retailer Capers merchandises mushrooms adjacent to powdered dressings, and uses mushrooms in its deli soups, said Polivka.

Organic Options' Mulcahy said the deli and produce departments can effectively work together to promote mushrooms by offering some of the same items in both departments. "I'll say let's grill up some portabellas and then you have the recipe for doing the same thing in produce.

"Mushrooms could play a huge role in home-meal replacement because of the myriad flavors. They can accent anything," noted Mulcahy.

An ideal setting in which to introduce customers to mushrooms as a meal solution, according to Mulcahy, might be through "those departments where they'll prepare anything for you [while you shop]."

The retailers interviewed by SN said they ran a variety of mushroom specials.

Food Emporium's Conti said he advertised mushrooms eight times a year and had 10 varieties discounted on ad.

Most of the retailers interviewed by SN believed the mushroom category would only continue to grow.

"The popularity of mushrooms is going to continue to increase as people continue to be more cautious about what they eat as they cut out meats and get more vegetables," said Caper's Polivka.

"As people's palates become more sophisticated this has nowhere to go but up," concluded Organic Options' Mulcahy.

Fungi Fundamentals

More fresh mushrooms are being consumed whole and raw and less are being used in

salads, according to data from the NPD Group, Rosemont, Ill., that breaks down the different ways that mushrooms are consumed.