Business Report: Mushroom disruptor?


TEAMWORK: Richard Hanley works with the mushrooms while his wife, Kate, prepares the spices for their company’s accidental Bacom Bits creation. (Don Kadair)

A mistake by the owners of Hanley's Foods leads to an opportunity to create a plant-based salad topper. BY MAGGIE HEYN RICHARDSON (Business Report)

BURNT MUSHROOMS, turns out, taste a lot like bacon, Baton Rouge-based salad dressing manufacturer Richard Hanley discovered by accident.

Last year, Hanley and his wife, Kate, had a eureka moment when they accidentally overcooked grilled mushrooms, discovering an unintentionally crisp texture and flavor that mimicked that of bacon. A successful salad dressing manufacturers, the Hanleys immediately began brainstorming about how to scale up the mistake into a salad topper that would fit into their Hanley's Foods portfolio of seven all-natural salad dressings along with croutons made from po-boy bread.

With plant-based food sales increasing exponentially, the idea felt timely, says Hanley. He and Kate spent the next few months testing ingredients and cooking methods at the LSU AgCenter Food Incubator, where they had also developed their other product and still bottle many of their salad dressings. Earlier this year, they finalized a proprietary recipe for a new product they named Bacom Bits, whose ingredient list includes mushrooms, oil and spices. The Hanleys won't reveal specifics about which types of mushroom are used, or how they're cooked. They were introduced in January and are now in all seven Whole Foods Markets in Louisiana. The product is sold in 2.5 oz. bags for $5.99 each.

"We believe it's the right product at the right time," Hanley says. "There's just nothing else like it in the space."

He could be right. For decades, the bacon bits market has been dominated by two types of products, artificially flavored imitation bacon bits like those popular on commercial salad bars, which are made with soy-based textured vegetable protein. And, real bacon bits made with dried and preserved actual bacon. Hanley is banking on creating a boutique brand that can muscle in and outpace both options with its short list of ingredients, promise of sustainability and association with that popular modern food descriptor, "plant-based."

"I think he's going to do very well with this," says Gaye Sandoz, LSU AgCenter Food Incubator director. "You just need to look at the Impossible Burger and ideas like that to see a real increase in interest in this type of product." The Impossible Burger, made by Impossible Foods, is a meat substitute burger sold at Burger King. Impossible Foods makes plant-based meat analogues that taste and look more like real meat. The company says it does this by using an additive made from the fermentation of genetically engineered yeast.

According to BIS market research, plant-based food and beverages alternatives are expected to reach $80.43 billion in sales by 2024, an anticipated 14% rise from 2019. The report adds that almost one-third of the U.S. population is following a so-called “flexitarian” diet, or the situational integration of vegetable- and grain-based meat alternatives. And while the growth of the plant-based food sector is still in its early stages, there's reason to believe that new products will continue to hit the market as consumers demand new options, flavors and texture, the report states.
Moreover, market research firm DSM conducted a global consumer survey in 2018 that confirmed the uptick in plant-based consumption among meat-eaters in the U.S. and many European countries. Consumer cited health conscious and climate change as motivating factors. It’s encouraging news for producers whose sales aren't reliant on the much smaller subset of vegetarian and vegan diners. 

However, the report also concluded that meat analogues need to improve on flavor. More than half of respondents rate the flavor of meat substitute as "just OK," and one in three say they'd pay more for products whose flavor better mimics the taste of real meat.

That gives Hanley confidence. “We think we have a superior product because we're using real mushroom, which already have a protein-like flavor," Hanley says, "Our plan in the next five years is to become the number one bacon bit in the country."

Hanley says the company will focus first on the natural food market, including additional Whole Foods Market throughout the region. He sees restaurant and hospitals as next-tier markets to target.

Hanley's Foods Inc. launched in 2012 with its signature Sensation Salad Dressing, placing the product in I0 stores by the end of that year. Now the company has seven dressings in more than 1,000 stores from Texas to the Carolinas, including a sizable number in Walmarts.

Currently, the Hanleys are self-financing the Bacom Bit product line, reinvesting profits from sale into production. It takes I00 pounds of fresh mushrooms to produce 30 pounds of product, Hanley says, and capacity at the LSU AgCenter Food Incubator can't exceed 1,000 pounds of fresh mushrooms at a time.

The next step, Hanley says, is to find an acceptable co-packer to produce the line for company. But many co-packers aren't used to working with mushrooms and, so far, have considered the production too risky to take on, Hanley says. The company is also looking at the long-term possibility of building a production facility of its own. It has actively sought investors this year, first through a Kickstarter campaign that unfolded over the summer. The company raised just one-third of its goal, and therefore had to return the money to participants. Hanley also put the product before BREW's BR Pitch Night in June, but lost out to the Block Lawncare app.

In the meantime, Hanley says the company will continue to chip away at growing sales to the extent the company can handle them. He anticipates Bacom Bits being sold through additional natural foods stores and through Amazon in the next few months. "We're going to keep our heads down and remain self-sustaining and profitable," Hanley says. ''We have sales, and sales cure all. I'd rather have sales and back orders, than to overproduce and not have sales."

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