Retailers can ride the ‘Shroom Boom’ toward higher mushroom profit.
Originally printed in the January 2023 issue of Produce Business.
Mushrooms add versatility to a produce department and create significant sales opportunities.
“Mushrooms are a top 10 seller in fresh vegetables and an important contributor to the success of the produce department,” says Anne-Marie Roerink, principal and founder of 210 Analytics in San Antonio, TX, and retail consultant for The Mushroom Council.
Mushrooms are an item a store just has to have, according to Sam Marrogy, produce director at Harbortown Market, an upscale retailer in Detroit, MI. “Customers seek out mushrooms because they’re important to recipes,” he says.
Starting with the pandemic, fresh mushrooms have created what’s known as the “Shroom Boom,” explains Lawrence Tuck, director of category management for Monterey Mushrooms in Knoxville, TN. “This boom has resulted in fresh mushrooms being on top of several food trend lists,” he says. “Over the course of a year, the mushroom category generates more sales and profits than spinach, broccoli and asparagus categories.”
Brian Gibbons, produce director at Highland Park Market in Farmington, CT, with three stores, conveys mushrooms remain a mainstay in produce. “If you carry a good variety, you can draw some different clientele to shop at your produce department,” he says.
Consumer demand, household penetration, purchases and consumption for both conventional and organic mushrooms continue to increase year-over-year, states Mark Kreiner, outside sales coordinator for Mother Earth Mushrooms in Landenberg, PA. “With consumers gravitating to paleo, keto diets, plant-based and vegan diets, mushrooms are the perfect fit,” he says.
Mushrooms are poised to have a big year in 2023, projects Kevin Delaney, vice president sales and marketing at To-Jo Mushrooms in Avondale, PA. “Supply and quality are expected to be strong in quarter one, which will give retailers the chance to promote or showcase the category. Mushrooms are such a versatile item, giving retailers the opportunity to really get creative with merchandising.”
Pay Attention To Handling
Mushroom quality is impacted significantly by handling. “Mushrooms are 90% water, so if not handled properly they can lose shelf-life quickly,” says Garth McLean, vice president sales and marketing with Premier Mushrooms in Colusa, CA, a subsidiary of Farmers Fresh Mushrooms California.
The Giorgio CARE (Cool, Avoid, Rotate, Entice) program is a way to promote freshness and maximize shelf life, explains Bryan Shelton, vice president of sales and marketing for Giorgio Fresh in Blandon, PA. “Always store the product at 34 degrees,” he says. “Display mushrooms between 38 to 42 degrees. Always rotate, avoid over-stacking, and avoid spray misters.”
The number one focus for mushroom display should be the visual appearance of each package, emphasizes Sean Steller, director of business development for Phillips Mushroom Farms in Kennett Square, PA.
“Each package must be rotated within a few days of arrival,” he says. “Failure to properly rotate inventory effectively can leave visually unappealing mushrooms on the shelf, creating a spiral of decreasing sales, excess inventory in the warehouse, and a difficult situation to reverse.”
Tuck recommends utilizing “Best If Used By” dating from the supplier to simplify rotation for store team members. “Build store sets to hold two days of supply so stores can eliminate cooler inventory between deliveries.”
Think Through The Display
Success starts with a nicely stocked, attractive display. “Merchandise in a high traffic area with signage pointing out healthy lifestyle attributes and suggested usages,” says Kreiner. “Mushrooms should be merchandised optimally in a multi-deck case with good airflow. Cases with LED lights are preferred, as fluorescent lights tend to cause white mushrooms to prematurely grey and they also give off heat that contributes to premature degradation.”
Suppliers suggest formally evaluating the space allocated to fresh mushrooms. “As consumption increases and consumers demand more versions of mushrooms, shelf space must increase to meet these consumer-driven demands,” says Kreiner.
Have the correct number of linear feet to support weekly sales, advises Monterey’s Tuck. “Our rule of thumb is one linear foot for every fifty dollars in weekly sales,” he says. “And each item’s share of sales should equal its share of linear feet in the set.”
Secondary displays help add ring. “Merchandising sliced mushrooms in the meat department can boost sales,” says Fred Recchiuti, general manager at Basciani Foods in Avondale, PA.
Stores with more variety generally sell more mushrooms per location, states Phillips’ Steller. “Consumers can grab portabella packages for the grill and a package of shiitake for soup at the same time,” he says.
Shelton has seen increased sales in Giorgio’s cultivated exotic segment, both packaged and bulk, exotic blends and value-added sliced. “Varieties include shiitake, oyster, royal trumpet and beech mushrooms,” he says. “In addition to specialty exotics, we see increased interest in value-added stuffed baby bellas, portabella jerky and ‘plant-based’ and ‘meat substitute’ introductions to the category.”
Yet Tuck cautions consumers want variety but not at the expense of being out of stock on their favorite item. “During these inflationary times, consumers are sharing they would rather have their item on sale than try a new variety,” he says. “A good rule of thumb is variety in exotic mushrooms should not be more than five percent of the shelf space in your set.”
Organic mushrooms are a fast-growing segment, says Mother Earth’s Kreiner. “As more farms convert to organic growing, the price gap between organic and conventional produce has shrunk,” he says. “Organic mushroom promotion in print ad and in store continues to increase year-over-year.”
Premier will carry out a major expansion next year and a big part will be in organic mushrooms, describes McLean. “Five years ago, a grocery store might carry 95 percent conventional and five percent organic,” he says. “Now it’s more 60/40. People are looking for and asking for organic.”
When organic mushrooms are integrated into the overall mushroom set, data shows that units, sales and net profits increase two to three times what they would generate in an organic produce section, relays Monterey’s Tuck. “We did a case study to prove it and incorporate this logic in all sets we design.”
A little promotion goes a long way with mushrooms. Gibbons usually promotes mushrooms by price and type. “I might advertise 10-ounce whole white and 10-ounce baby bella together and do a sliced shitake and oyster mushroom together,” he says.
Mushroom promotions can be tied to seasonality. “Portabella caps are featured primarily in the summer months for grilling events and fall/winter holiday times for mushroom pizza,” says Kreiner.
“Events can be rotated throughout the calendar year. A retailer should have a quarterly promotion calendar that rotates varieties with an eye to peak mushroom consumption times of the year.”
Communicating the benefits of mushrooms speaks to today’s shopper. “Mushrooms provide a plethora of nutritional benefits retailers can use to create a narrative to pique consumers’ interest,” says Giorgio’s Shelton.
Today’s consumers want to know more about the food they purchase, reminds Roerink. “Many consumers have an awe and cool factor for mushrooms,” she says. “Additionally, mushrooms are highly nutritious and sustainable, two important attributes to today’s shopper.”
Retailers can count on industry suppliers for help with mushroom merchandising. The Mushroom Council provides intelligence supporting mutual growth of retailers and mushroom producers. “In a data-driven world, the council aims to provide insights into sales, the market, and a mushroom consumer,” says Roerink. “In the past year, the Council has made available insights into heavy, medium and light mushroom consumers, sales data, and best practices from around the world.”
Giorgio works with customers to determine ideal positioning and space to maximize sales. “Retailers can increase sales by understanding their customers’ shopping habits,” says Shelton.