July 7, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Instar Asset Management, a private equity firm focused on North American middle-market infrastructure and alternative real asset categories, partnered with company management to acquire a majority stake in Canada’s Greenwood Mushrooms from Novocap for an undisclosed amount.

Novocap initially invested in the company in May 2016. Over the course of its partnership with Greenwood Mushrooms, the company expanded its Manchester farm resulting in a nearly doubling of production, to become a leading North American supplier of mushrooms to the U.S. and Canada. 

Headquartered in Ashburn, Ontario, Greenwood Mushrooms controls a vertically integrated operation that includes the only fully enclosed composting facility in North America, and two state-of-the-art indoor mushroom production facilities with an approximate output of 29 million pounds per year.

“When we invest in industry-leading businesses, we are fundamentally investing in people,” said Morty White, managing partner, Instar. “The high-quality service and long-term customer relationships are truly a testament to the strength of Greenwood’s experienced team. We are delighted to welcome Greenwood to the Instar family as we work together to shape the future of agriculture.”

The mushroom market in North America is expected to grow at a CAGR of 7.7 percent to reach a value of $3.51 billion by 2027 – up from a value of $1.85 billion in 2018, according to Research and Markets. 

This growth is being driven by a confluence of factors including increasing consumer awareness about the health benefits of mushrooms; a growing acceptance of dried foods (dried mushrooms have no added preservatives and are a good source of vitamin D); and a rise in vegan diets and the suitability of mushrooms as a meat substitute playing into the overarching shift toward plant-based products and ingredients.

The potential of mushrooms extends beyond its properties as a food ingredient. Colorado-based MycoTechnology has pioneered the development of a variety of innovative organic food processing platforms using the natural power of mushroom roots (mycelium). Although the full range of possibilities for their technology is still being discovered, the company has used their technology to solve some of the toughest challenges faced by the food and beverage industries.

The company explains on its website, “In nature, mushroom mycelium act as the clean-up crew for the forest – pulling toxins out of the soil and giving back nutrients to plants. We harness this natural phenomenon through fermentation to eliminate ingredient drawbacks, boost functionality and deliver greater nutrition to foods, beverages and supplement products.”

With Instar’s investment, Greenwood Mushrooms will be well situated to continue expanding and pursuing its growth strategies in order to capitalize upon these market conditions and windows of opportunity. 

“One of the biggest challenges to the sustainability of our communities is the safety and security of our agricultural ecosystem,” said Stephen Simpson, partner, Instar. “Particularly in today’s climate, with growing populations, increasing urbanization and a changing environment, we are excited to partner with Greenwood, a controlled environment agricultural business that is innovating to optimize growing systems and support local food security. The team’s strong record of growth and focus on environmental impact makes them a perfect partner for Instar.”

Clay Taylor, CEO, Greenwood Mushrooms, added, “Since the 1960s, Greenwood has partnered with industry leaders to integrate the best technology, develop best-in-class facilities, and produce the best product. Innovation and people are at the heart of what we do, and we are excited to welcome Instar as our new financial partner to support the next phase of growth for Greenwood.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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