Mighty Mycelium

Broadly speaking – and this is ignoring the pharmaceutical and psychoactive application of fungal metabolism products – fungi are used for two main innovative avenues; first to create novel feed, food or food additives highly efficiently, and second to create biodegradable materials that can replace resource-inefficient or fossil-based products such as textile or plastics.

Fantastic fungal foods

In the 1960’s, among fears that the world wouldn’t be able to produce enough protein to feed humans and the animals that we eat, interest in mycoproteins, or proteins produced by fungi, surged. This interest delivered some curious results, and some results we know (and eat) to this very day.

One of the first mycoproteins was developed by researchers at British Petroleum (BP), who discovered a by-product of oil refining could be transformed into protein thanks to a strain of yeast. This “food from oil” became quite popular for producing animal feed throughout the 70s and 80s, and even earned its inventor Alfred Champagnat the 1976 UNESCO Science Prize.

More or less at the same time, the Finnish pulp and paper industry invested in the discovery and industrial deployment of a different type of fungus, which would transform that waste into protein for animal feed. The effort led to the opening of two industrial plants in the mid 1980’s, capable of producing ten of thousands of kilograms of its trademark PEKILO protein per year. The mycoprotein was used as pig and poultry feed for over a decade, until changes to the paper and pulp production process eliminated the waste that fed the fungus.

Another more well-known example from this time-period is Quorn. It was developed by a partnership of British companies based on a strain of Fusarium venenatum, a fungus that could be cultivated in enormous fermenters to create biomass which would then be processed into meat-like shapes. After a decade of regulatory purgatory, the company started selling their product in the late 80s.

The protein crunch did not happen, but Quorn still exists, having found a market and jumping the regulatory hurdles to be one of the very few mycoprotein products that can be sold legally in Western markets to vegetarians and other meat-avoiders.

The ambitions of a new wave of mycoprotein startups aim somewhat higher than just targeting vegetarians though. Meat and its production are not only very resource-inefficient, it’s also a significant source of greenhouse gas emissions. These startups are aiming to replace meat altogether. Or offer a viable alternative that fits into the dietary patterns of humans at large.

Over the past few years, dozens of startups have risen to the challenge, using fungi to produce everything from meat alternatives to food additives to egg and milk protein replacements. A Swedish startup, Mycorena, is even using fungi to recreate fat, which adds the meaty juiciness missing in so many meat alternatives. 

Another company, Finnish eniferBIO, has been working to revive the PEKILO process to produce mycoproteins for both animal feed and eventually human consumption. In April 2023, the company raised a €11m Series A to scale production up from 5 kilograms per day to over 5,000 kilograms.

“The fungal kingdom represents a huge untapped source of protein that we believe will rise to rival the volumes of plant- and animal-based proteins we consume today. The PEKILO mycoprotein process – having seen 15 years of industrial use since the 1970s, now being revived by eniferBio, is uniquely positioned to lead the field in providing cost-competitive, long shelf life, drop-in mycoprotein ingredients to the feed and food industries,” CEO of eniferBIO told ECBF.

Most of these startups are still early-stage, although some, such as US-based MycoTechnologies and Meati Foods, have picked up considerable investment rounds, of respectively $207,6m and $150m and are producing at industrial levels.

Taking note of the holomycote

Investors are starting to take note of the potential of using fungi for the production of food ingredients. Dutch mycoprotein startup The Protein Brewery’s CTO Wim de Laat, who spoke to ECBF on the deep dive, claims the production of their mycoprotein Fermotein produces 40 times as much protein per hectare than pigs, and 4 times more than soy beans - which has some of the highest protein content among plants.

Corporations are also jumping on the fungi bandwagon – most notably some of the world’s largest brewers, who naturally already have extensive experience with fermentation. AB InBev announced last year they’re experimenting with the production of fermented protein for food through their innovationlab Gitec.

Regulatory challenges

That last bit is a real hindrance to the industry. The European food regulatory body EFSA takes up to five years to determine if a novel food is safe for consumption and sale, and sometimes longer.

With a typical venture horizon of six to ten years, this is a major impediment for investment in startups working on foods that fall under the novel category – a category that is determined by both the type of fungus used and the production process that follows.

On top of this, toxicological studies needed for EFSA approval for fungal food products can run into the hundreds of thousands of Euros, which smaller, innovative companies might not have readily available.

As regulatory changes, especially in the EU, are slow to happen, it’s perhaps good to know that a dedicated trade association, the Fungi Protein Association was founded late in 2022 to represent the interest of the industry to policy makers.

Also in 2023 the EU has launched a project called Like-a-pro, which aims to develop alternative proteins with a number of different sources, including mushrooms and fermented fungal protein, while also researching consumer preferences and regulatory improvements.

Then again, EFSA states that currently they’re only evaluating a single fungal product labeled as a mycoprotein, which in the application is described to be similar to the fungus used to produce Quorn.