Medicinal, but not necessarily medicine—the makers of plant-derived products like CBD and functional mushrooms claim that this is the crux of their popularity. Balancing natural supplements and super-potent wellness products, superfood companies are building out a consumer base they hope to outlast the passing trends and fads that have long characterized the industry. And as the pandemic has worn on people’s mental and physical states, consumers have become more willing to try a variety of solutions.
The wellness industry has boomed over the last few years. Market indicators suggest that the industry (including spa services) was worth $18 billion in 2020, even with many brick-and-mortar locations forced to close their doors. People turned to all kinds of plant-derived substances to help take the edge off of quarantine, evident in the incredible growth of the cannabis industry, where jobs shot up 32%.
Superfoods are nothing new. Before there were CBD extracts and functional mushroom powders, there were turmeric supplements, chia seeds, quinoa, matcha, spirulina, apple cider vinegar, and countless other products promising to solve age-old and modern health problems. Over the last few decades, the way we address health problems has moved past purely physical issues toward the pursuit of personal optimization, along with an increased emphasis on wellness. New innovations are buoyed by younger generations, interested in lifestyle shifts and skeptical of pharmaceutical approaches. And for those with disposable income, plant-derived supplements have been a welcome answer to screen fatigue, chronic pain, and the incessant distractions of daily life.
But, beyond the hype and obvious industry explosion, plant-based alternative medicines and CBD products are often met with one common concern: “How do I know if it’s working?” While studies have proven a multitude of health benefits, many consumers have complained that results are too spotty, too subtle, or too pricey. So, how are the markets for CBD and functional mushrooms growing, even as skeptics continue to question their integrity?
The accessible anti-drug drug
The wellness industry, and specifically plant-derived supplements, promise approachable solutions, cultivating a niche market between herbal remedies and medicinal benefits. Danielle Ryan Broida, the registered herbalist behind Four Sigmatic’s brand of mushroom-based protein powders and coffee, insists these products are a convenient solution to modern life, for people “looking to improve their wellbeing from the inside-out with minimal effort.”
Gabe Kennedy, the co-founder of CBD-focused company Plant People, reasons that the growing interest comes from a broader shift in priorities, access, and social norms. Kennedy suggests that “the wellness industry is having a moment because people are taking ownership over their own health in ways that they have not been privy to before. The idea of investing in health and wellness is now a social marker and an identity.”
According to a survey from SingleCare, 33% of Americans have used CBD, (up from a self-reported 19% in a 2019 Gallup poll) citing its usage for everything from pain, inflammation, sleep, and focus problems. CBD is known to promote general wellness and calm—cue the global pandemic, during which 45% of current CBD users have increased their doses.
The pandemic has only accelerated the demand for products that promise everything from immune system fortification to mental clarity. And for new converts seeking an antidote to physical and psychological malaise, CBD offers a quasi-medical, but reassuringly approachable, fix.
CBD, short for Cannabidiols, are a THC-free, hemp-based plant product most commonly available in an oil-based extract. First developed in 1940, CBD has made a slow approach towards mass consumer products. But in the last decade, CBD has boomed in popularity, as innovators clamored to offer CBD products in niche formats like drinks, candy, soaps, teas, face serums, and many other forms. The largest CBD-focused company is Gaia Herbs, with an annual revenue of $45 million, and still growing, profiting off their diverse herbal remedies and vast production of CBD extract.
Competition multiples in the CBD space, as the mushroom market sees signs of growth
Far from a monopoly, the CBD industry is home to literally hundreds of companies extracting and delivering CBD in new, inventive ways. But the pandemic accelerated competition by provoking what market expert Bethany Gomez called an “extinction event” for many small CBD businesses, which might otherwise thrive in a competitive wellness market, emphasizing that “it's a healthy consolidation of the market.”
As of 2020, the industry is worth $9.5 billion, spanning consumer demographics from career-focused young people to health-oriented hippies. Specialty producers like Recess, an aesthetically delightful CBD-infused seltzer offering an “antidote to modern times,” are in a race to find a niche and expand it. Generic CBD producers are battling against each other in the quest for purity and quality extract, organizing their own regulatory bodies in the absence of FDA rules.
"The idea of investing in health and wellness is now a social marker and an identity.”
The CBD industry’s robust development makes the functional mushroom market look like a fledgling industry, operating without external regulation or industry standards. For a long time, herbal and medicinal mushrooms could be ordered from small suppliers around the world who would forage and process them independently. And while there are still many niche producers, companies like Four Sigmatic are the cornerstone of a new market, bringing in a $20 million revenue stream and $5.4 million in VC funding. They’ve established themselves in part because they’ve undertaken the task of both lowering the knowledge barrier to their consumers (with their Mushroom Academy), and pioneering mainstream product development.
Functional mushrooms, distinct from more commonplace edible mushrooms (think porcini, shiitake, portobello, etc.), draw from thousands of years of herbalism, informed by Indigenous knowledge, cultural tradition, and more recently, hard scientific evidence to fortify health claims. With thousands of medicinal mushroom varieties — like anti-inflammatory Chaga fungus, immune-supporting Reishi mushroom, or brain-boosting Lion’s Mane — there’s room for innovation in the market. These varietals all make appearances in Four Sigmatic’s product wheel as coffee, cocoa, chai, or the standard plant-based protein powder. And it’s working: searches for “mushroom coffee” (a Four Sigmatic staple) have grown over 400% in the last 5 years.
The interest in functional mushrooms has been commensurate with the heightened interest in alternative wellness solutions. Kennedy insists that the popularity of both CBD and functional mushrooms is driven by people “revisiting the way we’re approaching our lifestyles.” He emphasizes that consumer interest should be met by quality and education, suggesting that there’s a lot of room to grow. “Many people have not heard of CBD, Maitake or Cordyceps but a lot of people have heard of vitamin C.”
Both CBD and functional mushrooms are plant-derived, medicinal supplements designed for a consumer demographic skeptical of pharmaceutical-grade medicine, but not necessarily interested in traditional herbal medicines. The companies that have met this demand best offer something accessible and health-focused, in favor of holistic wellness products.
For people looking to focus or chill, manage pain or stress, CBD and functional mushrooms promise you can have it all. Whether the product delivers on this promise, of course, varies as much by brand as it does by consumer. But for now, there are enough people benefiting from these products, and newcomers looking to solve whatever ails them, to keep the business booming.