Esca Bona Supplier Hero: M2 Ingredients

Mushrooms are more than meets the eye. The below-ground mycelium might be where most of the action is at. And they have found their moment as a trending functional ingredient.

Todd Runestad, Content Director,

March 28, 2018

7 Min Read
Esca Bona Supplier Hero: M2 Ingredients

When you think mushrooms, you probably think the fruiting body growing above ground. And you might think of their historic use as immune-modulating substances (when you’re not thinking portobello burgers).

But mushrooms are more than that. Most of the action may reside in the below-ground mycelium—a wispy root system that links all mushrooms together. In fact, a few years ago, biologists around the world got in a contest to decide which was the largest living organism on earth. First it was the whale. Then the sequoia tree. Then it was a Colorado aspen grove (aspens grow by roots throwing up shoots which grow into other trees so an entire grove is linked by one root system). The final winner, however, was an Oregon mushroom patch that was connected by mycelium, and all of them in a vast acreage were found to be genetically identical.

Mycelium is the dynamic and enduring vegetative stage of the mushroom life cycle that can form the above-ground sexual fruit body stage of the mushroom life cycle when it has accumulated sufficient energy and nutrition and when environmental conditions favor and trigger fruit body development. Most of the life cycle of a mushroom and most of the total biomass of a mushroom is as mycelium.

In addition, the powders produced from the biomass contain the extra-cellular enzymes and secondary metabolites that diffuse into the cultured substrate it is grown upon. The cultured, fermented remnants of the organic substrate—myceliated organic oats, in the case of M2—is not an inert filler material, but is a functional ingredient. It contains oat beta-glucans, silica and silicic acid that happen to be deficient in many people’s diets. Thus, mushroom mycelian biomass products contain the entire life cycle of the mushroom and are truly a “whole food.”

The Mushroom Moment is Here

“We believe that the word about the amazing capabilities and properties of mushroom mycelium and mushroom mycelial biomass products is getting out,” said mycologist Steve Farrar, M2 Ingredients’ chief technical officer. “A wider audience now knows not only what the term ‘mycelium’ means, but they also have an understanding of the role mycelium plays in the health of ourselves when we consume mushroom mycelial products.”

M2 is unique in that it started as strictly an ingredient supplier, but wanted to elevate consumer awareness of mushrooms and drive its ingredient business so Carter decided to roll out some finished products under the Om Organic Mushroom Nutrition brand.

“Just in 2015 we were about 80/20, mostly ingredient sales,” said Sandra Carter, Ph.D., the two companies’ CEO. “Right now, we’re 50/50. We went through a lot of expansion in 2015 and ’16, and 2018 will outdo 2017 considerably.”

Most commercial mushroom-growing operations grow their mushrooms indoors in controlled environments. The great advantage of growing mushrooms in controlled environments is that mushrooms are bio-accumulators, so those grown outdoors are liable to soak up heavy metals. M2’s mushrooms are grown in a pristine indoor environment in specially designed bags for the mycelium to engulf the organic oat substrate. The entire biomass becomes inseparable. It all gets dried and used.

“We grow ours indoors in a 15,000-square-foot clean room, and that’s a big differentiator,” Carter said. “What you grow mushrooms on is really important because it becomes part of the finished product. The substrate really matters. And growing indoors, we don’t have the issue of toxicity. In fact, the accumulate nutritional components from the organic oats, like B vitamins and beta-glucans.” 

Carter said Farrar led the work on evaluating different substrates. Rice, which is often used, both has GMO (genetically modified organism) issues and also can get sticky. “Mycelium have trouble running through that dense, sticky matter,” Carter said. “Oats give them that tough cellulose to digest. They digest the oat matter, and that gives them a great nutritional piece.”

Formulation Considerations

Because mushroom mycelian biomass powders contain more of the milder tasting mycelian stage of the mushroom life cycle and lesser amounts of the stronger, sometimes bitter flavor of the fruit body, the flavor of mycelian biomass powders does not overpower the flavor of other ingredients. 

“In general, all of the species of medicinal mushroom mycelial biomass powder that we produce have an earthy, somewhat nutty flavor profile,” Carter said. “It does not overpower the flavor of other ingredients in a super food powder blend or when incorporated into food items such as energy bars.”

She said that species like reishi and turkey tail have a slightly bitter flavor, while others such as maitake have a sweet taste component. 

“There are different aspects of different species that improve cognitive health, immune function, or help with sports,” said Carter. “They are really transformational. You can create a really enormous amount of different products using different mushrooms.”

Lion’s mane, for example, is being used in cognitive products.1 Chaga is an antioxidant with a folklore-type following.2 Cordyceps are used for endurance.3 And reishi is for immunity.4

Mushroom powders can be consumed without additional heat treatment straight out of the container in fruit juices, fruit smoothies, green mixes, protein shakes and other food items. They can also be steeped in hot water to make a tea with other flavorings, or mixed in coffee, or cooked in soups, stews, sauces, oatmeal and more.

These mushroom powders are soluble, making them good in beverage formats. Carter said they have the ability to tweak powders to improve solubility even more, things like changing particle size to make it bigger or denser so it dissolves. 

“Almond milk with mushrooms binds and makes a nice, silky taste and flavor,” she said. 

Brands getting on board

In the case of Suja Juice, they turbocharged their line of kombucha drinks with different adaptogens such as M2’s reishi mushrooms. They plan on expanding their mushroom-infused beverages in the next year. 

“It was a natural fit to incorporate reishi in our kombucha for bolstered functionality,” said Bryan Riblett, Suja’s vice president of commercialization/chief innovation officer. “We felt lucky and fortunate to source from a team producing superior quality, organic products. I think we are just beginning to tap into the possibilities of these amazing ingredients.”

M2 occasionally does concept testing work and works with brands to ensure they get the most appropriate mushroom for what the brand is marketing. They stay in touch with brands throughout the product development process.

“Often customers will send us a product so we can do benchtop work ourselves,” Carter said. “We might say that this species will be better depending on your product and what you’re looking to do.”

She said the next generation of mushroom finished product inclusion is foods.

“Brands are starting to approach us and are realizing that if they’re going to make a veggie burger, let’s put in reishi or lion’s mane,” Carter said. “For consumers, it’s let’s eat a veggie burger and have the benefit of supplements without eating a capsule.”


Editor’s Note: The Esca Bona Supplier Heroes is a reoccurring feature of suppliers that fuel innovation in the good food supply chain. These features explore the brand story, innovation, supply chain investment, research and partnerships that these companies undertake to improve the food system and consumer health. We select suppliers based on their commitment to the good food movement, their story, their sustainability initiatives, their focus on safe and efficacious ingredients, and their partnerships with their finished product customers.

Esca Bona is an event and brand spearheaded by New Hope Network that champions the good food movement by helping finished product brands improve their supply chain, support the people who create food, and best harness technology and innovation.

If you know of—or are—a supplier with a story to tell, email Sandy Almendarez, editor in chief, Natural Products INSIDER at [email protected].



  1. Mori K et al. “Improving effects of the mushroom Yamabushitake (Hericium erinaceus) on mild cognitive impairment: a double-blind placebo-controlled clinical trial.” Phytother Res. 2009 Mar;23(3):367-72. DOI: 10.1002/ptr.2634.

  2. Haibo Mu et al. “Antioxidative Properties of Crude Polysaccharides from Inonotus obliquus.” Int J Mol Sci. 2012; 13(7): 9194–9206. DOI:  10.3390/ijms13079194

  3. Tuli H, Sandhu S, Sharma A. “Pharmacological and therapeutic potential of Cordyceps with special reference to Cordycepin” 3 Biotech. 2014 Feb; 4(1): 1–12. DOI:  10.1007/s13205-013-0121-9

  4. Chan W. “Ganoderma lucidum polysaccharides can induce human monocytic leukemia cells into dendritic cells with immuno-stimulatory function.” J Hematol Oncol. 2008; 1: 9. DOI:  10.1186/1756-8722-1-9


About the Author(s)

Todd Runestad

Content Director,, Natural Products Insider

Todd Runestad has been writing on nutrition science news since 1997. He is content director for and Natural Products Insider digital magazines. Other incarnations: supplements editor for, Delicious Living!, and Natural Foods Merchandiser. Former editor-in-chief of Functional Ingredients magazine and still covers raw material innovations and ingredient science.

Connect with me here on LinkedIn.


Todd writes about nutrition science news such as this story on mitochondrial nutrients, innovative ingredients such as this story about 12 trendy new ingredient launches from SupplySide West 2023, and is a judge for the NEXTY awards honoring innovation, integrity and inspiration in natural products including his specialty — dietary supplements. He extensively covered the rise and rise and rise and fall of cannabis hemp CBD. He helps produce in-person events at SupplySide West and SupplySide East trade shows and conferences, including the wildly popular Ingredient Idol game show, as well as Natural Products Expo West and Natural Products Expo East and the NBJ Summit. He was a board member for the Hemp Industries Association.

Education / Past Lives

In previous lives Todd was on the other side of nature from natural products — natural history — as managing editor at the Denver Museum of Nature & Science. He's sojourned to Burning Man and Mount Everest. He graduated many moons ago from the State University of New York College at Oneonta.


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