Cultivating Trust: How Risk Management Strengthens the Functional Mushroom Industry

The cannabis industry reignited interest in plant medicine, and functional mushrooms are riding the boom. But, this nascent industry still faces many risks, none more important than customer safety.

Transparency in the supply chain of functional mushrooms goes a long way toward building a positive reputation and consumer trust. People need to know that they’re consuming safe, legal, tested products that can help them optimize their health.

It only takes one issue to erode years’ worth of customer trust – and trust is the cornerstone to success as a plant medicine business. A brand that is seen as untrustworthy will have decreased sales, lower engagement, and less momentum to build toward future success. And once gone, consumer trust is hard to get back.

Having the proper safeguards in place can help keep your brand on track, and save a small mistake from turning into a big disaster. Rigorous quality control practices, adequate insurance policies, and a robust risk management plan are all important security measures.

How can risk management help functional mushroom brands build consumer confidence? By showing that consumer safety is kept at the forefront of every stage of the supply chain process.

Transparency in Sourcing and Cultivation

Where are your mushrooms coming from? Who cultivates and harvests them? Who cleans, processes, and packages them? Which lab tested them? Having all of this information available to the consumer creates transparency in the supply chain, which fosters trust. Customers want to know if you’re using organic or sustainable cultivation practices, if the mushrooms are being grown in a controlled environment, and even if your staff wears PPE in the cultivation room (as they should.)

It’s not enough to tell your customers that you have safe practices – it is necessary to show them again and again. Consider exploring relevant certifications that demonstrate your commitment to customer safety and quality products, like USDA organic, B-corp, or sustainability.

Mitigate Contamination Risks

Growing mushrooms, like growing cannabis, is a delicate process easily upset by external contaminants. Keeping the cultivation room sanitary and free of bacteria or germs needs to be a top priority in keeping functional mushroom products safe. Growers know the challenge of keeping “contam” out – adhering to industry best practices can help mitigate this.

Rigorous sanitation protocols are necessary in grow rooms, from gloves, hairnet, and a face mask to full-body PPE. This significantly reduces the chances of contam reaching the mushrooms. Following best practices for pest control to keep bugs out goes hand in hand with this. Strict testing procedures are also a part of mitigating contamination risks.

Standardized Processing and Packaging

When you go to the store to get a bag of chips, you expect brands to look a certain way each time. The same is true for people buying functional mushroom products. Having standardized processing and packing procedures helps your team maintain a consistent quality of product, minimize the risk of errors, and provide a repeatable experience to customers.

In plant medicine, creating repeatability is crucial for customer trust, because outlier experiences can cause a bad experience or create a reputation of inconsistency for brands.

Open Communication about Research and Claims

Businesses in the plant medicine industry must walk a fine line, between legal restrictions on making “medical claims” and highlighting success stories from happy customers. There is much education needed for people to understand how functional medicines may help them, but brands should be cautious about sharing any and all research studies.

Most people don’t understand research lingo, but scientists know that not every study is created equally. A retroactive survey that includes 25 people, 20 of them men, holds far less scientific validity than a double-blind, peer-reviewed study of 500 people divided evenly along gender lines. It’s your job as the brand to translate complex scientific findings into clear communication for your audience.

Starting a business, especially in the functional mushrooms industry, is a big investment rife with risk. But only businesses that innovate to meet evolving customer needs and set themselves apart from the rest succeed.

So how does risk management help support the industry and foster innovation? By providing clear guidelines for operation and a safety net for trying new things. With the proper umbrella of insurance coverage, your team can innovate freely knowing that your bottom line is secure.

Managing Research and Development Risks

Insurance policies can help mitigate the financial risks that come with product R&D. Innovating new product lines or consumption methods can be an expensive endeavor that involves new equipment, machines, PPE, and developing new procedures. Having a safety net beneath your investment allows your team to explore new frontiers with greater confidence, knowing that your money is protected.

Protecting Against Product Liability Concerns

The functional mushroom industry parallels the cannabis industry in many ways, including the risk of product liability that supply chain businesses assume. Due to the lack of federal oversight or guidelines, a lawsuit stemming from a contaminated or mislabeled product could fall back onto every business that touched it along the way. Product liability insurance protects your team against crippling financial repercussions from someone else’s mistake.

Business Continuity Planning

Unexpected events can devastate a fledging business. A risk management plan helps you identify potential risks, determine their likelihood, and take steps to mitigate those risks. Having plans in place helps you weather stormy seas when they do arise, rather than being entirely caught off guard.

No one can plan for a massive tornado in the off-season, but you can have incitement weather emergency plans, based on your location. A strike at the manufacturing plant where your mushrooms are processed can’t be foreseen, but you can have a backup plan if part of your supply chain is disrupted. Addressing potentially disrupting scenarios in advance ensures you’re prepared if and when the worst happens.

Risk management isn’t the most exciting part of a functional mushroom business, but it is a vital piece of the puzzle for success. Take the proper precautions, explore potential risks, and create a safety net to help your team innovate freely, knowing you’re protected.

Protecting your holistic wellness company can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help! Please reach out to us today by email [email protected] or calling 646-854-1093 for a customized letter or learning more about your holistic wellness insurance options.