The products we use in our everyday lives define us. From the shirts we wear to the cars we drive, brands are as much a part of our identities as our career and favorite hobbies.
This simple truth is the key to success behind some of today’s most valuable brands, including Apple, Tesla, NIKE, Starbucks, and many more. However, the long-term success of these companies depends on their ability to navigate changing consumer identities. Although consumer identities normally take years to evolve, sometimes all it takes is a single catalyst to change everything…
For companies and consumers today, that catalyst is Covid-19.
While the pandemic has affected virtually every industry in one way or another, perhaps its most significant impact has been on mental health. As a result, a new type of consumer identity is coming into focus – one that prioritizes well-being, vitality, and longevity above all else.
We believe the growth of this “wellness” identity presents one of the most transformative retail opportunities in a generation, and therefore a significant investment opportunity as well.
The World is in Dire Need of Innovative, Accessible Mental Health Solutions
Much of the available data suggests Covid-19 is kicking the mental health crisis into overdrive.
In 2018, a Lancet Commission report on global mental health and sustainable development was published by 28 global specialists in psychiatry, public health, and neuroscience. Reuters cites a startling forecast from the report,
“Mental health disorders are on the rise in every country in the world and could cost the global economy up to $16 trillion between 2010 and 2030 if a collective failure to respond is not addressed.”
Reuters goes on to quote Vikram Patel, a professor at Harvard Medical School and one of the authors of the report, who stated,
“No other health condition in humankind has been neglected as much as mental health has.”
Covid-19 appears to be exacerbating this neglect by making mental health services less accessible.
Covid-19 Wreaks Havoc on Mental Health Services
According to a recent WHO survey published in October 2020,
“The COVID-19 pandemic has disrupted or halted critical mental health services in 93% of countries worldwide while the demand for mental health is increasing…”
In many countries, people are on their own when it comes to mental health and wellness. As a result, some consumers are taking matters into their own hands, targeting functional foods that contain adaptogens and functional mushrooms (aka medicinal mushrooms) to attain health and well-being in a post-Covid-19 world.
But what exactly are adaptogens and functional mushrooms – and how do they work?
Adaptogens and Functional Mushrooms
While many of us know little about adaptogens, their use in natural medicine goes back thousands of years.
“…non-toxic herbs, roots, and fungi that work to increase or ‘adapt’ the body’s ability to resist stressors and restore the body to its normal physiological function.”
Functional mushrooms are a type of adaptogen. Oftentimes, these mushrooms are then combined with other adaptogens (e.g. ashwagandha, holy basil) and ingredients to create a functional drink.
A Time article features Dr. Brenda Powell, co-medical director of the Center for Integrative and Lifestyle Medicine at the Cleveland Clinic’s Wellness Institute, who says “adaptogens help your body handle stress” and that “they’re meant to bring us back to the middle.”
Powell goes on to say in the article,
“Adaptogens may tweak hormone production and physiological responses to stress to ensure that your body—from your mind to your immune system to your energy levels—functions as it should.”
Functional Mushrooms and Adaptogens Are More Than a Fad
Though the body of research to draw upon is small, various studies support the benefits of adaptogens.
“…in a 2010 study by the Swedish Herbal Institute Research & Development, researchers concluded that ‘Adaptogens have a significant, beneficial and specific effect on stress-induced symptoms under fatigue.'”
“The study showed the most convincing evidence of the efficacy of adaptogens were found in studies related to its effects on cognitive function and mental performance, and on its efficacy in asthenia and depression.”
VeryWellHealth provides a list of common adaptogens and their intended effect(s):
“Astragalus root: said to help reduce stress and aging by protecting the telomeres (structures linked with aging, located at the end of each chromosome)
Ashwagandha: used to help the body cope with daily stress, and as a general tonic
Siberian ginseng: may provide energy and help overcome exhaustion
Holy basil: said to promotes [sic] relaxation, relieve stress and anxiety
Rhodiola rosea: may lower anxiety, fatigue, and depression
Cordyceps: a specific type of mushroom which is said to fight stress and helps balance the hormones
Reishi: a specific type of mushroom which is said to help the body adapt to stress and promotes a healthy sleep pattern”
In addition to the myriad of potential benefits they offer, many of these herbs, roots, and fungi can be sustainably sourced, ground up, and mixed with other ingredients. While some products provide more optimal delivery than others, the ways in which one can consume adaptogens are nearly limitless.
Avalanche of Capital Coming for Functional Food and Adaptogen Markets
According to Grandview Research, the global functional foods market is projected to reach approximately US$275 billion by 2025 and expand at a CAGR of 7.9% during the forecast period.
Functional mushrooms are expected to make up a large chunk of this growth. According to Research and Markets, the global functional mushroom market is forecast to reach roughly US$34 billion by 2024 and is projected to grow at a CAGR of 8.04% during the forecast period of 2019 to 2024.
Fuelling this growth is a profound change in consumer habits — the building blocks of consumer identities.
A 2021 food trends report published by Whole Foods in mid-October highlights the recent dramatic change in consumer behaviour. In the report, Sonya Gafsi Oblisk, Chief Marketing Officer at Whole Foods Market, states,
“There have been radical shifts in consumer habits in 2020. For example, shoppers have found new passions for cooking, they’ve purchased more items related to health and wellness, and more are eating breakfast at home every day compared to pre-COVID . . . Food trends are a sign of the times, and our 2021 trends are no exception.”
The report goes on to say,
“Suppliers are incorporating functional ingredients like vitamin C, mushrooms and adaptogens to foster a calm headspace and support the immune system. For obvious reasons, people want this pronto.”
Adaptogens and Functional Mushrooms Attracting Consumers En Masse in 2021
Sparked by Covid-19, new health-conscious consumers are emerging by the millions. The gravitation towards wellness products that offer immune system support and stress relief will likely continue to increase, leading to soaring demand for functional food products that contain adaptogens and functional mushrooms.
This presents a generational opportunity for adaptogen and functional mushroom brands, which, if able to embed their products in the lives and identities of their consumers, could become leaders within the space.
Finally, much like the nascent psychedelics sector of 2020, we expect adaptogens and functional mushrooms to emerge as an exciting niche market for speculators in 2021.
May the best brand win…
All the best with your investments,
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