Applied Food Sciences, KÄÄPÄ Biotech form strategic partnership

21-Aug-2023 - Last updated on 21-Aug-2023 at 13:12 GMT

Getty Images / Anna Grigorjeva

The collaboration paves the way for the launch of organic Nordic mushroom extracts while bringing greater access to the market.

Applied Food Sciences Inc. (AFS) recently announced its equity investment and partnership with Finland-based KÄÄPÄ Biotech, a firm specializing in fungi cultivation and research. With the functional mushroom market booming worldwide, AFS aims to capitalize on this surging demand by partnering with a high quality mycology supplier.

Loretta Zapp, CEO of Applied Food Sciences, told NutraIngredients-USA that AFS has spent a significant investment studying and exploring functional mushrooms in its Bio Venture Center.

“We see a great opportunity to bring some unique ingredients to the market. However, the most important first step was to find the right sourcing partner that could align with the standards of quality, traceability, and sustainability that our customers have grown to expect in AFS. I truly believe we found that and more through Eric [Puro] and KÄÄPÄ, and together we are looking to raise the bar on fungi cultivation, research, and ingredient development,” said Zapp.

She added that the alliance will add value to KÄÄPÄ's unique functional mushroom supply chain as AFS works on enhancing functionality as well as bringing greater awareness and access to the market.

Portfolio expansion

The strategic partnership will expand AFS' primarily botanical portfolio with the addition of Nordic grown, functional mushroom extracts for use in food, beverages, and supplements. The launch will include six organic powdered mushroom extracts: Lion's Mane, Reishi, Cordyceps, Chaga, Shiitake and Maitake. Each species contains a variety of adaptogenic, antioxidant, nootropic, or other benefits–a move that aligns with AFS' commitment to innovating functional, organic ingredients.

“As a company specializing in unique organic ingredients with a focus on science and quality, we knew that KÄÄPÄ was a great fit with AFS and that we could immediately add value to their existing mushroom ingredient solutions. AFS' reputation in the industry is based on quality, testing, and consistency, along with unique customer service related to product development. To add value, AFS will not only bring our technical sales and marketing team on board, but also contribute an investment in science and innovation as it relates to ingredient applications through our team at the AFS Bio Venture Center. As our potential and existing customers have taught us, this is becoming more and more expected as they hope to realize new product potential. Given the current interest in mushroom ingredients, we look forward to introducing Nordic mushrooms to the US market,” explained Zapp.

Growing concerns

The company said it grows its organic mushrooms using local birch wood, the national tree in Finland, with the extracts made from mushroom fruiting bodies, free from excipients and grain fillers, and standardized to primary active compounds for optimal bioavailability.

Eric Puro, CEO and co-founder of KÄÄPÄ Biotech, noted that the quality of growing conditions has been a major issue in the market. "Mushrooms are strong bio-accumulators, so when we grow them, it's very important that their environment is clean,” said Puro. “Finland has the cleanest air and cleanest water ever measured in the world.”

Another concern for the market is chaga overharvesting. KÄÄPÄ Biotech adheres to Finland's tight regulations through progressive sustainability initiatives such as sourcing from its own managed forests near the Arctic Circle, responsibly becoming the world's largest supplier of wild-grown chaga, according to Puro.

KÄÄPÄ Biotech grows its organic mushrooms using local birch wood, the national tree in Finland, rather than grain alternatives that are often used. Chaga overharvesting is another specific concern in the industry, but Puro said KÄÄPÄ adheres to Finland's strict regulations through progressive sustainability initiatives.

AFS is working with KÄÄPÄ to supply mushroom ingredients that are USDA-certified organic, GRAS for safe use in approved food and beverage applications, and third-party tested for purity, ensuring they are free from contaminants and pathogens while improving validation methods.

Tracing from spore to extract

"Testing with third-party labs is key to many of our customers. Building trust starts with verifying the product's safety, efficacy, and purity. In addition to quality, a lot of the allure for AFS to KÄÄPÄ is their transparency and ability to tell the whole story,” said Zapp.

Zapp added that another key to gaining trust was KÄÄPÄ winning the 2021 NutraIngredients Start-up Award.

“With the full support and backing of NutraIngredients, we were able to bring on new global partners in South Korea, the UK, and others across the EU and North America. KÄÄPÄ has been scaling operations and vertically integrating our business to provide the highest quality products controlled from spore to shipment. We are now closing our Series A investment round, which will further establish KÄÄPÄ as an industry leader in the functional mushroom space.”

Up next, AFS anticipates a full launch at the SupplySide West this fall in Las Vegas.