During the last decade, there has been a substantial increase in the number of consumers that are health conscious and live an active lifestyle. The trend has shown no signs of slowing down and has served as a significant catalyst for several emerging verticals within the health and wellness market.
According to a 2019 report from Grandview Research, Functional Foods Market Size, Share & Trends Analysis, the functional food market is $275 billion vertical, and we expect the industry to record strong growth on a going forward basis.
One of the verticals that have benefited from the trend is the functional mushroom market. In 2020, we recognized a massive increase in interest in companies that are levered to this burgeoning vertical and have been focused on identifying potential industry leaders.
Going forward, we expect to see increased interest in the functional mushroom market and believe that the trend is just getting started. Today, we want to highlight 3 functional mushroom brands that are executing on a differentiated growth strategy and will be closely monitoring these operators on a going-forward basis.
Rritual: A Pre-IPO Execution Story to be Aware of
Rritual is a leading functional mushroom company that is dedicated to creating effective plant-based health products that are designed to facilitate the practice of daily self-care. The company is backed by a leading team of scientists, doctors, nutritionists, and experts that have significant experience in the health and wellness market and find this to be an important aspect of the story.
Earlier this year, the company sent us three products to try and were impressed with the quality of the brand. From the packaging to the types of mushrooms and adaptogens that are used in the product line, the company’ has developed a premium functional mushroom brand and will monitor how it gains traction with consumers.
The functional mushroom company has been able to differentiate itself from other brands by adding strategic human capital to the leadership team and by creating a premium brand of functional mushroom and adaptogenic elixirs. Rritual has been executing on a multi-faceted growth strategy and we are favorable on the direction the management team is bringing the business.
Rritual has entered the functional mushroom market with their flagship collection of certified organic mushroom and adaptogen elixir mix powders, offering products in three key health categories. Over the next year, we expect Rritual to report significant developments as it relates to bringing products to market.
Rritual’s formulations team is led by Stacey Gillespie, a consumer health expert, and we are favorable on the growth prospects that are associated with the product line. The company will initially launch three products that are either an immune booster (Chaga), brain booster (Lion’s Mane), and stress support (Reishi), and we are favorable on the diversity of the product line.
Another key player on team is David Kerbel who has more than 30 years of senior experience in retail, brokerage, and consumer packaged goods (CPG). Through his experience, he has formed strategic relationships with large big box retailers, and we expect his connections to play an important role in how the business advances.
One of Kerbel’s biggest successes is Celsius, a pre-exercise supplement drink, and he played an important role in the growth of the brand. During the last few years, Celsius has been quickly gaining market share in the exercise supplement drink market and has become a leading brand in the space. We are favorable on the experience that Kerbel adds to Rritual and expect his experience with Celsius to support the advancement of the brand.
From the product line to the management team, we believe that Rritual represents an attractive play on the functional mushroom market and are favorable on how it has executed on a differentiated growth strategy. We believe that Rritual is in the early innings of a major growth cycle and will monitor how the management team is able to drive the story forward. In the near future, Rritual plans to complete a go-public transaction and this is an opportunity that we are excited about.
If you look at the success of a business-like Athletic Greens, we believe that Rritual can follow a similar path. The company’s products are focused on improving mental and physical health and we expect to see it become a part of peoples’ daily ritual. We are favorable on the strategy that the management team is using to advance the brand and believe that Rritual is a story to be aware of.
Psyched Wellness: A Multi-Faceted Growth Story
Psyched Wellness Ltd. (CSE: PSYC) (OTCQB: DCNPF) (FSE: 5U9) is another functional mushroom brand that have been focused on and want to issue an update on the opportunity.
Psyched is dedicated to the distribution of mushroom-derived products and associated consumer packaged goods (CPG) with the goal of becoming a leading brand of premium mushroom-derived products.
Psyched is in the process of developing a line of water-based extracts, teas and capsules that are designed to help with three key health objectives: promote stress relief, relaxation and assist with restful sleeping. We consider Psyched to be a differentiated opportunity and are favorable on the structure of the operation.
Since inception, Psyched has been highly focused on the intellectual property (IP) side of the business as it relates to the research it is conducting on muscimol. Through nerve derived immunity and neuroprotective modulation model, the company is conducting a study that is focused on identifying therapeutic values that are associated with muscimol for antioxidant and anti-inflammatory purposes.
Going forward, Psyched is planning on applying for its New Dietary Ingredients (NDI) and NHPN within a year and will be looking to commence sales of its flagship products. We believe that Psyched is executing on a multi-faceted growth strategy and are favorable on the risk-reward profile that is associated with it. In the near future, we expect to learn more about the company’s key growth initiatives and believe that the opportunity is flying under the radar.
Optimi Health: An Emerging Functional Mushroom Brand
Optimi Health Corp.is another private functional mushroom brand that we have be following and is a story that our readers need to be aware of. The company is developing a vertically integrated Canadian functional mushroom brand that focuses on the health and wellness sector. Optimi Health intends to cultivate, extract, process and distribute high quality strains of fungi products and grow and process functional mushrooms in order to develop and sell its product line.
Earlier this year, Optimi Health reported to have signed a lab services agreement with Numinus Wellness Inc. (TSXV: NUMI), which is creating an ecosystem of health solutions that are centered around the development of psychedelic-assisted psychotherapies (PAP) to further the research and development of Canadian-grown psilocybin-producing mushrooms.
Through this first-of-its-kind agreement, Optimi will utilize and leverage Numinus Bioscience’s laboratories, equipment, services and expertise, with the goal of developing products for the emerging psychedelic industry. Optimi has applied to Health Canada for a research exemption allowing it to conduct activities involving psychedelic compounds and, in advance of approval, will undertake a number of research and development projects with Numinus that are related to psychedelic compounds and formulations.
Optimi Health is in the early innings of a major growth cycle and operates out of two facilities that have 20,000 square feet in aggregate. In addition to a research exemption, the company has applied for a dealer’s license through its wholly owned subsidiary. We believe the granting of the license would prove to be a major growth catalyst and are monitoring this aspect of the story.
As it relates to the relationship, we are favorable on the potential value that can be created for both companies and will monitor how the story advances from here. We believe that Optimi Health has been executing on a differentiated growth strategy and are favorable on its potential catalyst for growth.
If you are interested in learning more about the functional mushroom market, please send an email to email@example.com with the subject “Functional Mushroom Companies” to be added to our distribution list.
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