Fungi – the undiscovered powerhouse of the future

Fungi have been part of human life for thousands of years. Ötzi, the iceman, is thought to have carried birch polypores with him as a remedy. Tinder fungus, which grows on trees, was collected as far back as the Stone Age to help start fires while shiitake mushrooms have been used in East Asia for cooking and medicine for centuries. Despite its importance, the fungal kingdom remains one of the least researched biological domains. Of an estimated two to four million species, only five to ten percent have been scientifically described so far.³ Fungi originated around 1.3 billion years ago, evolving from a common ancestor with animals. Their actual organism is the mostly invisible mycelium – a finely branched network of thin fungal threads known as hyphae. The visible fruiting bodies are the reproductive organs of this largely hidden organism. Fungi are prototypical networkers and their mycelia true all-rounders. They play a central role in natural material cycles, supplying plants with water and nutrients, strengthening their power of resistance and breaking down dead biomass. The honey fungus (armillaria ostoyae) demonstrates just how extensive the invisible network with its mycelium potentially extending over several square kilometres. 

Fermentation is one of the world's oldest biotechnological processes. Bread, beer, cheese and yoghurt would be inconceivable without microbial fermentation. “Fermentation has been part of our lives for more than 12,000 years,” says Benjamin Schramm-Völkening, Head of Business Development at Kynda, a biotech company based in Germany. “Fermentation is the happiest accidental discovery in human history,” he adds. Beer, i.e., fermented barley grains, is widely considered to mark the beginnings of agriculture and settled farming. The discovery of citric acid (the mould aspergillus niger) and penicillin (the fungus penicillium) following the advent of controlled fermentation represent major achievements in the 20th century. What is new now is the precision with which biological processes can be controlled and the way in which fungi are utilised in this context. At the heart of 21st century precision fermentation lies the mycelium – the fungus’s fine root-like network. Filamentous fungi grow in liquid fermentation bioreactors under precisely controlled conditions. Temperature, oxygen supply, pH and nutrient levels are set precisely so that protein-rich biomass can be harvested within a few hours. The natural fibre structure of the fungi binds water, giving foods a meat-like texture, and is rich in dietary fibre.⁴ Moreover, explains Benjamin Schramm-Völkening, the mycoproteins have a natural umami flavour, a flavour which is typical of meat and facilitates the development of foods that are sensorially appealing.

In the mid-1980s, Quorn™ became the first mycoprotein product to be marketed on an industrial scale. Following more than ten years of safety testing, it formed the basis for millions of tonnes of substitute-meat products. Today, the technology is making a giant leap forward with advances in fermentation technology, new fungal strains and improved processes expanding the range of potential applications. Companies are developing not only meat substitutes but also functional ingredients for plant-based milk alternatives, baked goods, hybrid foods and other applications. Schramm-Völkening sees a great potential for hybrid and alternative foods whereby fungal mycelium is specifically used to improve texture, flavour or nutritional value. This permits the optimisation of both plant-based and animal-based products, as well as combinations of the two. It is not a question of pitting animal, plant-based or alternative proteins against one another, says Kynda’s chief strategist. Rather, each protein source has specific functional properties. The key question in the future will no longer be ‘animal or plant-based’ but which protein best fulfils which function. 

Studies suggest that fungal mycelium has positive health effects in terms of appetite control – outperforming meat or soya – and in regulating cholesterol and blood sugar levels.⁵ At the same time, the production of mycoprotein results in significantly lower greenhouse gas emissions than the production of animal or plant-based proteins, while also requiring less land and water. 

The route from the laboratory to the market is a long and difficult one with key challenges including the selection of suitable fungal strains, ensuring their consistent quality during mass production and the still high costs of fermentation. Additional challenges include the regulatory requirements of the Novel Food Regulation (EU 2025/228)¹⁰ and the lengthy approval procedures of the European Food Safety Authority (EFSA), as well as limited fermentation capacity and high capital requirements during the growth phase of these companies.

A prime example of this is Kynda Biotech, a start-up founded in 2019. Based in the German state of Lower Saxony, the company cultivates fungal mycelium using food processing residues such as oat hulls, sour whey or sugar by-products, and converts these waste flows into mycoprotein at the point they are generated. This gives rise to decentralised production models that reduce transport costs and strengthen regional resilience. The decentralised use of plant-based by-products as fermentation substrates is a promising approach to a circular bioeconomy.⁴ Following successful funding rounds, Kynda Biotech is now investing in larger bioreactors to expand industrial production.

Market acceptance is crucial for the future of mycelium-based or fermented foods. Studies¹¹ show that this depends on consumer confidence in the technology, the perceived naturalness of the products and transparent communication regarding the manufacturing processes and benefits. Not everyone is familiar with the term ‘fungal protein’ and the public debate about ultra-highly processed foods is crucial. Pragmatically, Benjamin Schramm-Völkening says, “Price can be a good reason to buy a product.” Lasting market success occurs when economic competitiveness, compelling products and trust in the technology intersect.