Mushroom farm flourishing in niche

Posted: Thursday, February 15, 2001

SANTA ROSA, Calif. -- Behind the trees on a one-lane road north of Sebastopol, in two corrugated tin sheds with an indistinguishable sign, lies the largest medicinal mushroom farm in North America.

Malcolm Clark, 58, and David Law, 49, raise 36 kinds of exotic mushrooms, more varieties than anyone else in the world.

They started off in 1977 with shiitake and other culinary mushrooms but gradually evolved into a company that serves both the culinary and the medicinal markets.

Their 20-year journey is emblematic of the kinds of things small farmers in Sonoma County must do if they are to prosper in an era when land prices are rising and grapes are easier and more profitable to grow.

''It's all about finding niches -- a new product or a service that's not already in a surplus situation,'' said Desmond Jolly, director of the Small Farm Program at UC Davis.

''Small farms have to find a group of customers that want their product and some unique way to penetrate these markets. It takes very energetic, imaginative, innovative people,'' Jolly said.

The idea for Gourmet Mushrooms Inc. came in 1976, when Clark, who was writing scientific textbooks in Toronto, and Law, a graduate business student at the University of Wisconsin, met through a mutual friend.

Both men were enchanted by mushrooms because of their subtle and delicious taste and their potential for medicinal uses -- mushrooms naturally produce a type of antibiotic.

''The possibility that mushrooms could contribute to somebody's health and well-being, the possibility of medicinal uses, that really turned me on,'' Clark said. ''Nobody else was doing it.''

Clark had become interested in mushrooms after writing a textbook on them.

He became a pupil of Tsuneto Yoshii, one of Japan's foremost authorities on mushrooms, and a research biologist for a Canadian-Japanese mushroom company in Canada.

Building on Yoshii's techniques, he developed a new way of cultivating strains of wild mushrooms so they could be grown commercially and with consistent quality.

Law, on the other hand, grew up in Hong Kong, where people ate mushrooms daily. ''We love and treasure mushrooms, especially the shiitake, because of its flavor,'' he said.

The two immediately realized Law had the business acumen to complement Clark's scientific ability and decided to form their own company.

They started with the shiitake mushroom, which has both culinary and medicinal uses.

''We wanted to grow the best shiitake mushroom in the world, to set the standard,'' Clark said. ''We didn't know what we were getting into.''

Law and Clark chose Sonoma County because of its mild temperatures and proximity to the San Francisco market.

With $79,000 -- all the money they could raise -- they bought and converted an abandoned chicken farm.

Law went to work in San Francisco in commercial real estate, making money to support his family as well as the mushroom ranch. Clark gave up his job and lived on his savings while he was the farm's sole employee.

It wasn't until 1990 that Law also could quit his day job. ''Some days we had our nose above water financially and some days it was below water,'' Law said.

They began by cultivating culinary mushrooms because of the market they foresaw among upscale urban restaurants.

They now grow 10 varieties of culinary mushrooms, in colors ranging from gold to gun-metal blue, in flavors from garlicky to nutty.

They've developed and patented some of the varieties themselves.

''They're wild men,'' said Chef John Ash, founder of John Ash & Co. and culinary director of Fetzer Vineyards. ''They're continually finding wild mushrooms they then cultivate for people like me. They provide a quality and a variety of mushrooms that no one else has.''

But through the years they also continued to add medicinal mushrooms and now market some 26 varieties. Clark has started a company called MycoHerb, which produces 14 therapeutic products from mushroom extracts.

''The demand is really starting to happen. It's a very dynamic market,'' Clark said.

They expanded their original 5,000-square-foot facility to 18,000 square feet in the late 1980s and are expanding again this spring to a 43,000-square-foot office, research and growing facility with state-of-the-art production equipment.

The $2.5 million expansion will gradually allow them to triple their present production of 10,000 pounds a month to nearly 30,000 pounds a month, Clark said.

A residence, a demonstration garden and a guest house also are planned to accommodate visiting chefs such as Julia Child and Wolfgang Puck, who come to Gourmet Mushrooms Inc. to exchange ideas with Clark and Law.

After 20 years, the business has reached a turning point.

Several pharmaceutical companies are courting Clark and Law, hoping to use their consistently high-quality medicinal mushrooms in health supplements.

Clark also is helping a local winery with its grape waste disposal by offering them a mushroom that lives on and devours grape seeds and stems.

The next step for Clark and Law may be a franchise-type operation in which entrepreneurs could acquire everything needed to grow mushrooms on their own.

But the Frei Road ranch will always be there, Clark said.

''We'll always be providing mushrooms for culinary uses. It's still our passion. It's the romantic side of the business,'' Clark said.

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