B Corp Smallhold Sets New Standards For Farming

In 2017, Smallhold was born in a shipping container in Brooklyn that housed mushrooms grown by Andrew Carter and Adam DeMartino. They launched with one mission in mind: feed more Americans mushrooms. Six years later, Smallhold has macrofarms around the country, can be found at major grocery stores and well known restaurants, and they just announced their B Corporation certification.

I recently spoke with Andrew Carter, CEO and Co-Founder of Smallhold, to discuss the market challenges and opportunities, Smallhold’s growth and what’s ahead. Andrew shares Smallhold’s mission to make specialty, organic mushrooms more accessible and more understood, the importance of this certification, and why mushrooms are here to stay.

Christopher Marquis: Where/when did you get the idea to create Smallhold and what was your first actionable step you took to make the idea come to life?

Andrew Carter: I’ve always been obsessed with the idea of growing food indoors. Our climate is changing rapidly and the crops our society relies on for sustenance are not evolving fast enough to be a reliable source of nutrition for future generations. It’s inevitable that we will be growing some of our food indoors, and I want to help make that a reality. I spent a decade of my life growing and working on various leafy green and tomato projects, and eventually found my way to mushrooms. They grow indoors, can grow on waste streams, and can be one of the most sustainable sources of calories on the planet. At the same time, we felt that incumbent mushroom growers weren’t doing enough innovation with technology, varieties, quality, and environmental impact. In 2017, my cofounder, Adam DeMartino and I quit our jobs, started growing mushrooms out of a shipping container in Brooklyn, and began figuring out the backbone of what Smallhold is today. We started supplying mushrooms to restaurants and grocery stores in New York, and quickly expanded with Minifarms that could be placed in hotels and restaurants for our partners to grow their own mushrooms. Like everyone else, we did everything we could to survive the pandemic, including offering mushroom grow kits so that people could grow their own mushrooms at home. At a time of uncertainty, our mushrooms offered levity: customers became entranced with the unique shapes and colors of their mushrooms as they grew, and then had fun experimenting with recipes and new flavors in the kitchen. It was a great way for people to learn about mushrooms and their benefits. Once people started going back to the grocery store, there was more interest in healthy food than ever, and retailers were looking for innovative farms to provide new varieties of mushrooms to their customers. We started building our farms in 2020, and now have farms across the country and are feeding millions of people annually with our mushrooms.

Marquis: Why mushrooms? Why did you choose this over other sustainable foods, such as indoor leafy greens farms or processed meat alternatives?

Carter: I spent more of my career growing leafy greens than mushrooms. A lot of innovation is necessary in leafy greens, but mushrooms lend themselves to growing indoors. They don’t need a ton of light, are traditionally grown vertically, and require much tighter environmental controls which makes growing outdoors difficult. This allows us to be much more competitive than leafy green producers competing with outdoor growers. Regarding alternative meat – Cultivating mushrooms is far more sustainable than creating meat alternatives. There’s an advantage in using what the earth already grows (an entire kingdom of fungi)— we’re just perfecting the process. Our technology across our distributed farming network produces higher yields and quality as compared to conventional practices, it’s a key element in mitigating crop loss and overproduction, cutting off the potential for waste from the start. At Smallhold, we’re able to produce millions of pounds of mushrooms each year and meet the growing demand across the country. It’s our belief that consumers also want something simple and natural. Why eat a veggie burger with a ton of inputs when you can eat a savory, nutritious, tasty mushroom that scratches the same itc?

There’s so much nutritional value in mushrooms that many people don’t know about, like fiber, potassium, and the lesser known ergothioneine. We don’t offer the typical mushrooms found in a grocery store. Our specialty mushrooms are organic, and naturally loaded with protein, vitamins, minerals and antioxidants – we are introducing people to a new realm of flavor, texture, and nutrition.

In addition to all this, there is an intriguing mystery behind the fungi kingdom – fungi is its own biological kingdom separate from plants and animals – that draws you in and inspires obsession. We believe mushrooms can play a huge role in a better food system and a better planet.

Marquis: Can you say a bit about the trends in mushroom consumption and how Smallhold is helping shape that?

Carter: Relatively recently, the food industry noticed an increase in mushroom consumption, particularly with the specialty mushrooms that Smallhold grows. Americans are slowly but surely becoming more familiar with the sustainability and culinary value of the fungi kingdom. We’re meeting consumer demand, and increasing the diversity of foods Americans eat. Not only are mushrooms able to shape peoples’ diets, but mushrooms can help with communities and other plants. We’ve even collaborated with researchers on a mycoremediation project— using waste streams from our farms to help break down oil issues like hydrocarbons and uptake of heavy metals— thus cleaning up polluted environments. Food needs to be sustainable, but it also needs to be tasty and fun. We absolutely need to change the future of food, but it’s only going to work if people like how it tastes. That’s why quality and experience is so important to us.

Marquis: What sets Smallhold apart from other mushroom competitors?

Carter: Our farms are distributed throughout the US, rather than centralized like general mushroom farms. We also grow varieties that most large scale mushroom farms are not growing. Our farms are Certified Organic and equipped with cutting-edge technology, which creates the best possible conditions for the specific needs of all different types of gourmet mushrooms. We’ve built hyperclean, efficient farms with less water and energy usage than typical in the industry. All this allows us to have our mushrooms on the shelf faster than other mushroom companies, pack in sustainable, compostable packaging, and pay a living wage. All these factors are table stakes for us, but consumers are now resonating with it as well.

We also don’t just offer mushrooms that most American consumers are used to seeing. When people say they don’t like mushrooms, it’s usually because they’ve only had a soggy button mushroom from a can or on a pizza. At Smallhold we offer over 10 varieties of mushrooms, each with their own distinct flavor, texture and nutritional benefits.

Becoming a B Corporation also really sets the standard for our industry. While keeping the future health of our planet at mind, we’re creating more access to mushrooms and better food choices.

Marquis: As the CEO of a B Corp, can you discuss the challenges and rewards of running a B Corp business, and how do you balance the financial needs of a growing business with a commitment to sustainability?

Carter: We barely changed anything about Smallhold to become a B Corp. We were doing all of these things already. Paying living wage, energy efficiency, circularity, sustainability, it is in the DNA of what we do, it always has been. The B Corp process has allowed us to quantify it, explain it to the public, and find ways to improve in the years to come.

Becoming a certified B Corporation is an ongoing journey. We’re continuously working to hold ourselves accountable, which means there’s a constant need of evaluation, adaptation and collaboration— and it’s a path worth pursuing.