Case Study 3: Mushrooms and Sprouts
About the farm
Sarah got interested in sprouts and mushrooms from experimenting in her own kitchen at home. She enjoys eating and cooking sprouts and mushrooms, and felt that there was room in the marketplace for a local supplier. She apprenticed under a few other commercial growers before setting up her own operation in some outbuildings and a greenhouse at her parents' farm. She has renovated these buildings to suit the specialized growing conditions of her products. Her business now occupies 1800 sq ft of heated, vented space, two shipping containers, an 18 x 36 ft greenhouse, and an 11 x 14 ft commercial kitchen that serves as a packing room for the sprouts and mushrooms. She has been growing the business slowly over the past five years.
There is a great deal of specialized knowledge in cultivating her eight varieties of edible fungi. She emphasizes that there has been a lot of trial and error. The mushroom cultivation is done in bags filled with a grain and woodchip mixture that she sterilizes herself in an autoclave. She inoculates this medium with her own seed spawn. This is done in her "clean room" that is free of contaminants and competing strains of fungi. From here, the bags are moved into the shipping containers where they grow for eight months under special conditions.
The sprouts are grown in nursery flats, some indoors and some in the greenhouse. Since sprouts are live foods, they require special handling and sterilized conditions. It is for this reason that Sarah had to invest in a commercial kitchen that is certified by the local health authority.
Farm Marketing
Sarah sells her mushrooms and sprouts at several farmers markets, and to restaurants. She has been very consistent with her supply, and is looking to sell to a few distributors this year. She enjoys the job of marketing because she feels very proud of her products, and she feels she serves an important role in the food system. She feels her high standard of quality does the promotion for her. Freshness and consistent supply are also key in her business. She commits to being at the farmers market every Saturday for the entire nine-month season. She also commits to a regular delivery schedule for her restaurant customers.
Seasonal Workload
Sarah spends about seven hours a day, six days a week on her business. This includes growing, packing, selling and delivering. She gets help from her husband, and she has two full-time interns. Every season brings its challenges that take some extra time. In the winter, it's freezing waterlines and temperature regulation. In the summer, it's excess heat and venting. She continues to innovate and to build infrastructure, for the mushrooms in particular, to help her emulate forest under-story conditions that make mushrooms thrive. She dreams of getting enough money together to build a metal building so she can contain everything under a single roof.
Limitations
Sarah has had multiple barriers to selling her products, but she is proactive and assertive about promoting her business. She says her triumphs over these barriers is what separates her from everyone else. Firstly, she learned that her local health authority deemed it illegal to sell mushrooms at the farmers market out of fears that they might be mixed up with poisonous mushrooms. She found an ally at the Ministry of Agriculture who called the health authority and cleared the way for her.
Sprouts are prone to contamination issues, so Sarah had to build a commercial kitchen that could be certified by the health authority in order to pack her sprouts for commercial sales. She has to get regular water testing, and she had to redesign her washing system so that everything could be well cleaned. Selling at the market is challenging because she has to maintain her products under set temperature parameters. However, she didn't feel any of these restrictions were unduly taxing. She is well monitored by the health authority, and she hasn't had any problems with her quality.
Farm Finances
Sarah pays herself and her employees a modest wage from the proceeds of the business, but has reinvested everything else and has received some family help to cover the $150,000 in costs that her business has generated. She has been very frugal by doing most of the building herself out of largely recycled materials, and she has sourced used equipment for her commercial kitchen, but it has still been very expensive. She is confident that the investment will pay itself off and she will be able to grow her business slowly over many years. She feels that although she may have saturated the market in her small rural area, she has access to larger markets in nearby urban centres.
She doesn't have any one biggest cost, but substrate, heating, and rent are all significant expenses each month. Pricing is a challenge for her. She sets her prices by estimating what she and her friends would feel comfortable paying for products of a similar quality. She has been told that her prices aren't high enough, but she has some strong views about food being accessible. She feels the only obstacle to making more money is her energy, and how much time she has to devote to the business. She has sporadic off-farm work - which works out to an average of a weekend a month.
Assets
Sarah has built up some significant assets in her business. Her commercial kitchen has some income generation capacity, and is also a community resource. All the stainless steel equipment (tables, sinks and shelves as well as the mushroom equipment) are durable and will hold their value. The modifications she has done on the family outbuildings are less tangible because she is outgrowing these facilities, but her building experience will be very transferable to the next incarnation of her business.
Why this business works
Sarah is in two specialized markets with her mushrooms and sprouts. The balance of the two product lines give her access to greater markets than she would have with either one on its own. Her tenacity with the health authorities, and her willingness to comply with regulations have enabled her to flourish in a niche that has been inaccessible to many amateurs.
Sarah has secure tenure on her family land that has made it possible for her to invest with confidence. Her devotion to regular supply and to high quality products has given her a good reputation in the community.
written by Robin Tunnicliffe, edited by Barbara Joughin
Last Modified: September 23, 2014