(Bloomberg) -- In a warehouse outside Oakland, California, the air smells like decaying trees. Workers toss microorganisms onto sawdust to grow mushroom roots into a leathery material. A few hundred yards away in a separate building, a competitor cultivates its own fungi fabric.
These firms, MycoWorks and Bolt Threads, are leading a burgeoning industry to make materials that mimic the feel, durability and smell of leather, but without the animal hides. It’s taken years to get close to the real thing, but now they say their fabrics made with the whitish root of mushrooms, called mycelium, are on the cusp of breaking into a global luxury leather goods market that according to Euromonitor International will hit $78 billion this year.
“We basically have nonstop interest,” said Sophia Wang, co-founder and chief of culture of MycoWorks, which has raised nearly $200 million and counts Natalie Portman and John Legend as investors.
The industry’s first targets have been high-end brands because mushroom leather is pricier than the real thing, and these firms can better afford it with their healthy profit margins.
Earlier this month, Stella McCartney, which has never used animal hides, partnered with Bolt Threads on a limited run of 100 mycelium-crafted bags that sell for $2,950.
Meanwhile, Hermes is working with MycoWorks on a handbag. Lululemon has dabbled in mycelium. Gucci, Kering and Adidas are testing the waters, too.
“The conversation is really being driven by the consumers, particularly the younger generation,” Stella McCartney, who started her own brand in 2001, said in an email.
Producers of mushroom leather pitch their products as better for the planet and easier for designers to customize. They also say there is plenty of demand, especially with goods made from so-called “vegan leather” gaining popularity. But that animal-free material is often made mostly from plastic, giving mycelium an edge, according to Dan Widmaier, co-founder and chief executive officer of Bolt Threads.
“There’s a bunch of consumers who want to make a switch to not plastic, not animals and to plant-based materials,” said Widmaier, who has two PhDs and raised almost $500 million since founding Bolt Threads in 2009.
Widmaier said Bolt Threads still uses some petroleum-based materials to hold mycelium together, but is working on a way to eliminate them. Meanwhile, MycoWorks can make its mushroom leather without plastic, according to the company.
Mycelium, which is fungi and not a plant, could also help ease a looming supply shortage. Calfskins are used to make luxury handbags because they are softer. The hides come from young cows that have been slaughtered when they are about five months old to make cuts of veal. But consumption of the meat has been falling for decades, including declining by two-thirds in the US this century.
“It’s difficult to find top quality hides,” said Patrick Thomas, the former CEO of Hermes and now a MycoWorks board member.
Harvesting mycelium is part of a boom in developing green alternatives that spans hamburgers to plastics. Mushroom roots are promising because they bind with other things. (In nature, they hold the forest floor together like an organic glue.) It also grows quickly — hitting production quality in as fast as two weeks. Other use cases include steak, Styrofoam-like packaging, lamp shades and building materials.
The goal for these mycelium companies is to win more customers and increase production, which they hope will lower the cost below traditional leather. Bolt Threads said its fabric costs about $25 a square foot, which according to the company puts it on par with premium calf leather.
To boost supply, Bolt Threads is finishing a facility in the Netherlands this year that will be able to process one million square feet a year. MycoWorks is building a plant in South Carolina that will eventually be able to produce several million square feet of mycelium annually.
Kiersten Stead, a MycoWorks board member who has a PhD in molecular biology, mentions mycelium in the same breath as Lycra and Gore-Tex, two of the 20th century’s most successful materials. The industry is attempting to create brands in the same vein with trademarks like Mylo (Bolt Threads) and Fine Mycelium (MycoWorks).
“The Holy Grail in material engineering is lightweight, super-strong materials,” said Stead, who is a general partner at venture capital firm DCVC Bio, which has invested in companies developing cancer treatments and autonomous farming equipment. “We’ve been chasing that for a really long time.”
But not everyone is convinced that mycelium will make a dent in the leather market.
Leather can last half a century. However, the durability of these new materials is untested, according to Joanne Crevoiserat, CEO of Tapestry, owner of the Coach and Kate Spade brands.
It’s not clear how easy it will be to manufacture and sell it in large volumes, Crevoiserat said. The expanded production to a couple million square feet of mushroom leather a year would be a rounding error in the luxury leather industry.
“They’re not at scale,” she said.
Crevoiserat also questions the argument that fabrics made from fungi or plants are indisputably more sustainable than leather. Cows and calves are slaughtered for their meat, and the hides are a byproduct. If companies such as Tapestry didn’t buy cowhides, many would end up in landfills, she said.
The mycelium companies counter that not only is cattle ranching a big source of carbon emissions, but that the leather tanning process produces lots of chemical waste. While mushroom leather is also tanned, executives say it uses fewer chemicals and less water because they don’t have to remove hair and fat from the hides.
Another question is how many consumers actually want a leather replacement?
There’s a small niche of shoppers who highly consider environmental impact when making purchases, but lots of green alternatives have struggled to expand beyond that. Many of the mycelium products also use plastics to bind the material together, which might undercut their sustainability claims.
Much of the marketing around mycelium goods pitches them as new technology with a vague message on sustainability. Lululemon, which has used it in yoga mat bags, described mushroom leather as an “innovative material made from renewable mycelium.”
At the MycoWorks warehouse in Emeryville, a biotech hub along San Francisco Bay, microorganisms in metal trays feed on a concoction of sawdust and a few ingredients that the company won’t disclose. They are stacked in a climate-controlled room that resembles a vertical farm. Once the mixture begins transforming into a whitish root structure, workers wearing protective gear to reduce contamination risk add sheets of fabric made from cotton or other materials.
The mycelium envelops the fabric and strengthens it into what looks like a bleached cowhide. In a final step, it’s sent to tanning houses in Europe, where it’s treated with chemicals to give it the same smell as finished leather.
In a nearby conference room, MycoWorks CEO Matt Scullin sits at a table perusing more than a dozen pieces of fabric in various textures and colors, including blue and yellow. They mimic sheepskin, calfskin and alligator leather, but they’re all made from mushroom roots. To the untrained eye, the fabrics bend, drape and smell a lot like real leather.
Scullin, who has a PhD in materials science, said one of the reasons he’s so bullish on fungi fabric is that it’s more adaptable than leather. He then holds up a piece of Kevlar that’s been encompassed by mycelium.
“This,” he said, “is a bulletproof leather.”
Editor’s note: For more on how consumer sectors are being disrupted by sustainable alternatives, read: Plant Milk Is Coming for Your Kids, The Battle for Your Toilet Paper Is On and Recycling Isn’t Going to Solve Plastic Waste. Enter Windex
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