The uneven process of appropriation by industry of basic mushroom inputs (I): mushroom spawn Introduction This is the first chapter of a series on the Irish mushroom industry by Francisco Arqueros. The completed sequence will hopefully give readers a full overview of the industry in an unique fashion - a view of the history and actuality of the industry from inception to present day. This work comes from an anthropological perspective which will include many strands of economics, psychology, social relationships and beliefs (overt and covert). It will deal with the industry as whole broken down in, chiefly, spawn and compost (the first parts of production process that acquired an industry character), production systems, marketing and consumption, and labour market and labour relations.
The work before you is the product of a three year research project funded by the Irish Research Council for the Humanities and the Social Sciences. It is also the preparatory material for a doctoral dissertation. Therefore, it is still an open document, and its author would be glad to receive and incorporate any suggestion or input from the readers email: francisco.arqueros@nuim.ie
The first chapter is on mushroom spawn, the first off-farm input in the history of the industry. It deals with the Irish industry and its connection with the global mushroom industry. In particular, it pays attention to the rise of Sylvan, the largest spawn manufacturer corporation in the World.
Mushroom Spawn Mushroom farming in Europe started in the seventeenth century in the region of Paris, in France. Some French farmers discovered to their surprise that mushrooms were growing spontaneously on spent compost of hot beds used in the cultivation of melons. By experimenting they also learnt that mushrooms could grow if they spread donkey and mule manure with water in which they had previously rinsed mushrooms. But that only happened with the particular variety of mushrooms from the melon beds. They were not able to grow mushrooms from the meadow in the same way. The whole process was a mystery to them.
Until 1588, when Giambattista Porta published his Phytognomican, the academic community in Europe knew very little about the biology of the mushrooms apart from the fact that they did not have leaves, roots, or buds. Porta was the first to see and describe how mushrooms produce spores, which later germinate and develop into mushrooms .
In 1707, De Tournerfort, a French botanist, came up with an explanation to the mystery of the origins of mushroom spores in the melon beds. In his opinion, the spores were naturally present in horse manure. Horses had passed them. He did not tell, though, how the spores got into the horses stomachs. According to De Tournerfort, once inoculated, the bed of horse manure had to be covered with a layer of soil and mushrooms eventually appeared. In 1731, Miller introduced to England the French method for the cultivation of mushrooms when he described it in his Gardener Dictionary (van Griensven 1988: 13).
In spite of not having any control over the generation, selection and germination of mushroom spores, for a long time growers managed to inoculate fresh horse manure with mycelium from old, spent horse manure on which mushrooms had previously grown (van Griensven 1988: 13). This method, however, had its problems. Viral and fungal diseases, for example, carried over from one crop to next. Growers fought these diseases back by constantly shifting the growing areas. Another problem was that the spores of malformed or poor quality mushrooms could not be separated off to improve the varieties of cultivated mushrooms. Therefore, these spores also carried over to the next crop.
At that time, as well as today, the most important input to grow mushrooms successfully was good compost inoculated with good mushroom spawn. Without a doubt, a suitable growing environment and good crop management are also very important factors for growing mushroom commercially. But it is not possible to talk about everything at the same time. A description of a particular mushroom production system should also include a description of the labour it mobilises to keep the system going (work process and labour market) as well as of the market for produce (competition). These will be done in other chapters.
The fact is that mushroom spawn was to become the first input in mushroom farming that was produced off farm. Industry appropriated it, and transformed it into a commodity, but that only happened around two centuries and a half after the beginning of cultivation of mushrooms in Europe. It is not difficult to understand why spawn was the first off farm input. To produce good spawn require a specialised knowledge in biology, particularly hygienic conditions to avoid contamination, and economic resources that are normally beyond the means of growers, unless they are very big ones. As we will see, however, this is truer in Europe than in the USA. In the US, some of the big spawn makers are also very large growers. Nevertheless, the task of uncovering the secrets of, and controlling, the germination of spores, then, did not fall to the growers, but to biologists working in laboratories. This process, on the other hand, took over two centuries because that was the slow pace of development in the biotechnological knowledge and its application to agriculture in the seventeenth and eighteenth centuries.
In 1894, the French Constantin and Matruchot were able to achieve a controlled germination of spores from mushroom tissue and spores. This mycelium, known as 'pure culture'[4], was then inoculated in sterilised horse manure, which acted as carrier and nutrient base. Subsequently, this substance was bottled and left to settle until the mycelium spread and colonised the sterilised horse manure. Later, growers bought this substance, in theory free of disease. The final product (planting material) sold to growers was mushroom spawn. The process in which growers (or compost manufacturers) planted the spawn in compost and left it to colonise this compost was called spawning. Laboratory operators could achieve a superior spawn quality by selecting spores from the best quality mushrooms. Since sterilised horse manure was the initial carrier of the mushroom mycelium, the first varieties of commercial spawn were called manure spawn (Vedder 1978: 21, 228-231, 240).
Constantin and Matruchot managed to keep their method secret until 1902, when Ferguson, an American, published a description of the conditions in which a controlled germination of spores and the growth of mycelium could be achieved. This meant the end of the monopoly of the Institute Pasteur of France as the leading institution in the spawn world market (van Griensven 1988: 13-14). In 1903, Louis F. Lambert, an immigrant from Belgium, created the Lambert's pure culture spawn in his laboratory of St. Paul, Minnesota. Until then, US growers had been importing from England compost bricks inoculated with a mixture of mushroom strains. By 1907, Lambert's American Spawn Company was marketing at least seven different pure strains of mushrooms (Agaricus bisporus) to growers around the US[5].
In 1932, James W. Sinden, then head of the Pennsylvania State University's mushroom research programme, patented grain spawn (van Griensven 1988: 15). The carriers of mycelium were, in this case, grains. According to Vedder (1978: 231), by the 1970s grain spawn had completely displaced manure spawn in most countries. For Vedder, the advantage of grain spawn is that it offers more initial growing points, work can be handled more quickly and it can be distributed more easily and evenly over the compost. At present, rye and millet are the most common grains used to carry mycelium, but wheat and sorghum have been used (Fritsche 1988: 91).
The current variety of white Agaricus bisporus, commonly found in supermarket shelves world-wide, comes from a single cluster of white mushrooms that an American grower named Downing, from Chester County (Pennsylvania), found in a bed of cream (brown) mushrooms in his farm in 1926. Until then all mushrooms had been brown. As with the mushrooms growing spontaneously in spent compost from melon beds in seventeenth century France, these white mushrooms appeared unexpectedly.
The first thing that Downing did was to call Louis F. Lambert from whom he had bought the spawn[6]. Lambert, who had moved his laboratory from Minnesota to Chester County in 1915, propagated the spores of this cluster in his laboratory by mixing them with spores of other cultivated mushrooms (multi-spore culture). After three generations of multi-spore culture in which he kept selecting the mycelium that produced the whitest mushrooms, Lambert managed to achieve a pure white strain (Fritsche and Sonnenberg 1988: 102). That strain was then used to prepare commercial spawn.[7] By the 1970s, mushroom spawn companies world-wide were producing over 50 strains of mushrooms developed in research laboratories, mainly of the Agaricus bisporus type (Vedder: 232). According to Fritsche and Sonnenberg (1988: 101), the different strains of Agaricus bisporus can be grouped in "white", "off-white", "hybrid"[8] and"brown".
The process of developing Mushroom strains and its consequences for growers Mike Walton (1987: 4) [9] has said that the new techniques of hybridisation allow spawn makers to manipulate the genetic constitution of mushroom strains in such a way that mushroom growing has developed from a risky adventure to a predictable and controllable industrial procedure. This statement must be taken carefully. While it is true that growing mushrooms is much more predictable than it was, and is resembling more and more an industrial activity, as we will see in other chapters, growing mushrooms is still more risky, unpredictable and less capital intensive than producing spawn or compost. To have a look at the process of developing mushroom strains, I will draw mainly from an article published in The Mushroom People by Mike Walton (July 1993: 8).
The first step to develop a mushroom strain consists in producing an isolate made of mycelium grown from carefully selected spores. According to Walton, the Sylvan group had produced over 20,000 isolated between 1983 and 1993[10], but only a reduced number of the most promising had been selected for intensive pre-commercial testing. During these tests, the strains selected are compared to existing commercial strains. Once the company considers a strain to be satisfactory and gives the go ahead, the laboratory staff mass produces batches of inoculum by vegetative transfer, which means that the original DNA copies itself as many times as needed. According to Walton, random errors can occur during the replication of the DNA, and the only way to detect them is to keep performing test of samples of inoculum before the laboratory finally dispatches it to the spawn factories. The quality control sections of the spawn plants also perform tests before they put the spawn for sale. At the time Walton was speaking, 1993, Sylvan was yielding 500 tonnes of mushrooms per year from all these tests. Since different strains need different environmental conditions, tests for each strain might also need to be performed in different growing rooms. The scale of these quality-control tests gives an idea of the resources needed to compete in the spawn world market. On the other hand, different strains will have different effects in the way in which work is organised in a mushroom farm. Some strains produce larger fruit bodies than others, and are easier to pick but slower to grow, etc. Growers can also influence the percentages of pinning per mushroom bed, to retard or accelerate the growth of mycelium and mushrooms, etc., by playing with environmental factors such as temperature, humidity, and ventilation (Fritsche and Sonnenberg 1988: 112-13).
In this section, I will deal only with the effect that the development of mushroom strains has on the work process in mushroom farms from the point of view of spawn manufacturers. In relation to farm management, Walton said (1987: 4-5): "Hybrid strains are far less forgiving and have narrower bands of acceptancy than their parent types and the first rule of management must be to respect that fact and to attend to every detail throughout the crop cycle hybrid strains are extremely reactive to the climatic environment each strain has its own specific requirements and so does each farm.
The right way to grow a mushroom crop of a given strain is actually established during the pre-commercial tests that spawn makers perform. As Fritsche and Sonnenberg (1988: 112) explain: "The selection of new mushroom strains is complicated by a number of factors. If a number of strains are cultured together in one room, it is impossible to provide the optimum climate for each one. If for example, strains with a mycelium that grows quickly into the casing soil are to be selected, then ventilation must be started as soon as the mycelium of the most rapidly growing strains has penetrated the casing soil sufficiently. Later ventilation would place these strains at a disadvantage since their mycelia would have grown too far into the casing soil. This harms pinheading."
Social scientists have studied how the application of biotechnology in agriculture takes the cultivation knowledge away from the farmer. Lewontin (1998) and Boyd and Watts (1997), for example, maintain that new hybrids leave farmers little room to control the work process in their farms; they force them to follow a pre-designed plan of crop management. By creating and developing mushroom strains, particularly hybrids ones, spawn manufactures play an important role in the determination of the work process in mushroom farms. It makes sense then that they include technical advice within the price of their spawn.
The role of these advisers is to tell growers how to grow different strains of mushrooms[11]. They also act as liaison officers reporting back to the spawn manufacturers the problems that growers find with their crop. In the normal run of things, if there are problems with a crop, such as mushrooms turning brown unexpectedly, or patches without mushrooms in a bed of compost, mushroom growers will tend blame the compost and the compost producer; compost makers will blame either the spawn and the spawn manufacturer from which they received it, or the inability of the grower to grow mushrooms; and the spawn manufacturers will blame either the compost maker or the growers. Although there have been cases in which spawn makers have recognised viral infections in their spawn which have originated in the spawn plant. But since growers are smaller and more fragmented down the mushroom commodity chain, they are normally the ones who take the blame and also the ones that absorb any losses. This also happens because farming is the most risky link in the mushroom chain. The spawn advisory team to growers will be in any case in a very good position to determine whose the fault is when (paraphrasing Walton in the inverse way) mushroom growing develops from a predictable and controllable industrial procedure to a risky adventure.
The increasing relationship between mushroom strains and quality standards in the consumer markets also takes power away from growers. When working on a new mushroom strain, inoculum labs generally want to develop a strain more resistant to diseases. The new hybrids can offer the best solution to this problem. Some strains have been derived from crossing spores of Agaricus bisporus with Agaricus bitorquis, a close species mostly grown in Holland. The reason is that bitorquis is more resistant to diseases (Fritsche and Sonnenberg 1988). A hybrid can have the shape and taste of a bisporus and the resistance to diseases of a bitorquis. Since bitorquis can grow at higher temperatures, it can be also more suitable for growers in warmer climates. But inoculum labs keep in mind, more normally, the quality requirements of the distribution markets for mushrooms.
Walton (1987: 4) has defined a good quality mushroom as a smooth, firm tissued, white, closed mushroom, with the ability to remain closed during the growing and develop only slowly after the harvest. Research at Teagasc Research Centre in Kinsealy, Dublin, found that the capacity of a mushroom strain to remain closed as long as possible was the most difficult factor to get right (Gormley 1987: 12).
Researchers found that under similar environmental and growing techniques, handling, packaging and transport of different strains performed differently according to the idea of mushroom quality Walton had argued for. Four days after being harvested and stored at 15-20 C the strain Horst U1 (a hybrid from Darmycel) performed better than others. 75 per cent of mushrooms from this strain remained white; 69 per cent, closed. The next best strain was A5.1 (Hauser) with percentages of 76 and 43 per cent; while the worst was X13 (a hybrid from Le Lion Mushroom Spawn), with percentages of 75 and 20 per cent.
In social science, Goodman and Watts (1997: 28) use the term precision farming to define the larger process by which science and information technologies are harnessed through private means (processors, retailers, consulting and service companies) to ensure quality demands. The right way to grow a mushroom crop and to manage a mushroom farm, therefore, is somehow in-built in the genes of the mushroom strain. This, however, does not mean that spawn companies determine also which production system (ie. growing in bags, trays or shelves) is the best. The price of labour, the structure of the industry, the structure of the market for mushrooms, the degree of technological development, etc. are factors that determine which production system is more viable.
By producing strains with ever more resistance to diseases and suited to particular climates, particular consumer marker requirements, etc., spawn makers are, nevertheless, increasingly dictating how growers must carry out their work. Growers lose control over the work process in their farms proportionally to their dependency on outside knowledge. The other side is that uncertainty, a major handicap for commercial agriculture, is greatly reduced. And growers must sell. So they have to fully adapt to the requirements of the markets for consumption, requirements over which they do not have control either.
Growers always have had to adapt their growing techniques to the genetic peculiarities of the varieties they have grown. What is new, however, is that spawn laboratories are determining now these peculiarities. That is where the power of spawn companies lies. The role of spawn makers in the development of the mushroom industry world-wide, in turn, is proportional to the concentration of the production of mushroom spawn among ever fewer corporations. To this process of concentration is where I turn now.
The Irish spawn market and its international connections Since the days of Matruchot, Ferguson, Lambert, and Sinden the quasi family-based small spawn laboratories have developed into a few multinational corporations that control most of the world spawn market for commercial growing. Making competitive spawn, as I have said, requires knowledge and equipment that is beyond the means of mushroom growers. Although Vedder (1978: 228) mentions that some large farms were still producing, in the 1970s, their own mycelium and compost. In this section I will deal with the development of spawn production in Ireland[13].
In the next section, I will place Ireland in the global context with the account of the rise of Sylvan, the largest spawn producer in the world.
Ireland's only spawn plant, Sylvan Ireland, is located in Navan town and was set up in 1987 as International Spawn Ltd. It produced its first batch of spawn in March 1988, and Joe Mulligan, a grower from Mullahoran, Co. Cavan, was the first to harvest mushrooms with spawn produced by this company in May 1989. He had bought compost inoculated with that spawn from Monaghan Mushrooms Ltd., an Irish company specialised in making compost and marketing mushrooms of which he was a satellite grower (O'Rourke 1990: 4). Until then Irish compost producers had been importing all mushroom spawns from European suppliers.
Mel O'Rourke, one of the founders of this plant, and its general manager at present, saw the market opportunity around 1985. He believed, after doing some market research, that the Irish mushroom industry was expanding and growers would buy mushroom spawn to produce good quality and quantity of closed white cups. But he also found out that to develop a functional mushroom strain could take years, a lot of scientific knowledge and expertise, and, ultimately, a lot of money. "Developing a new strain could be compared to breeding a Derby winner", he wrote (O'Rourke 1990: 4). Therefore, he ended up contacting L.F. Lambert Spawn Co., located in Kennett Square, Pennsylvania. He had had negotiations as well with Campbell Soups, another U.S. spawn manufacturer. After testing several Lambert strains in Kinsealy horticultural Research Institute in Dublin, O'Rourke chose the strain which he considered the most adequate for the Irish market, and signed an agreement with L.F. Lambert to access their expertise and get the license to use their mushroom strains.
Still, O'Rourke needed a high capital investment to build the plant, acquire the necessary equipment and expertise to make spawn. He sent a microbiologist from Cork, Frank Cogan, to Kennet Square to get some training in how to manipulate Lambert inoculum. Cogan became the first Technical Director of the company. O'Rourke also made an application for the initial capital investment to the Industrial Development Agency (IDA) (O'Rourke 1989: 32).
The agreement was that the inoculum would be sent to Navan from Lambert laboratories in the States. Staff in Navan then had to regenerate and grow this inoculum onto a nutrient base before they transferred it onto millet grains, which acted as mycelium carriers and nutritional sources. The grains had been previously boiled, cooled and mixed with gypsum to increase the PH and prevent the grains adhering to each other. Then the mixture had to be put into glass bottles, sealed and sterilised. Vedder (1978: 229) considers that the bottles had to be sterilised at about 120 C for over an hour[14].
Once the bottles had cooled down, the next stage consisted in inoculating them with pure mycelium and allowing it to colonise the grains at 23 C. The bottles had to be turned to facilitate colonisation and checked for infections at regular intervals. On completion of that process, which according to Vedder (1978: 229) lasted 2-3 weeks, the bottles went into a cold room (2C). There, the spawn was packed into plastic bags, and remained until it was distributed to compost producers.
Mel O'Rourke set up the spawn plant in Navan as International Spawn Ltd, but Sylvan Inc, the principal competitor of Lambert Spawn in the USA, acquired it in 1998 and modernised it in 1999[15]. The company then changed its name to Sylvan Ireland, and became a subsidiary of Sylvan Inc as a part of its European division.
I visited the plant in Navan in May 2005 and took the guided tour. We started in the "dirty" room, from where chalk, rye grains, and hot water are pumped up to a 300 cubic feet, V-shaped blender in a different room. I noticed that the room was spotless clean and tidy, and inquired why they called it "dirty". My two guides smiled, and I thought that most visitors asked, with surprise, the same question: "We call it the "dirty" room because it really is if you compare it to the rooms we are going to show you in a few minutes. As we move from one compartment to another, hygienic conditions increase to ensure that no fungus or bacteria interfere with the mycelium."
The blender in Sylvan Ireland:
In the next room, the mixture is heated and sterilised at 120 degrees for a couple of hours in the blender. The guides said that when the mixture had cooled down, the staff plugged to the blender a little tank with the inoculum. For the next twenty four hours the blender rotated, mixing the inoculum with the mixture of chalk and grains. In the next stage of the production cycle, the staff have to connect a drop-tube to the blender and transfer the spawn to the "clean area".
According to my guides, the blender produces in one cycle of 24 hours a batch of spawn capable of filling 72 mushroom houses. Since they also said that the blender has a capacity to produce 360 nine-litre boxes of spawn, and each box can fertilise 4 tonnes of spawn, I later thought that Sylvan must reckon that the average mushroom house in Ireland has a capacity for 20 tonnes of compost. But I also made more calculations. If the blender worked at full capacity, it could produce spawn to fertilise around 525,600 tonnes of compost. That is a lot considering that growers from the Republic of Ireland had consumed only 274,548 tonnes of compost in 2004 (Teagasc mushroom census). Sylvan, according to my guides, had a 70 per cent share of the Irish market for spawn in 2004.
Taking into consideration that the total staff in the plant amounted to only 18 workers, the productivity per worker was really high if we compared it to production of compost, or, at the lower end, to harvesting. Spawn manufacturing is a very high capital intensive activity. Conversely, mushroom farming is very labour intensive.
After admiring the blender, the main innovation that Sylvan introduced in the plant in Navan, we went down to see the "clean" area through thick glasses. This is a sterilised compartment in which only personnel in sterile clothing are allowed, including shoe and sleeve covers, gloves, and head and face protection. There they fill nine litre bags with the spawn. The bags are later stored at 24-25 C to allow the mycelium to colonise the grains. After two weeks, the grains acquire a white colour and look puffed. Then they are moved to a cold room where they can remain up to 6 months at 2-3 C, until they are delivered to compost producers. At that low temperature, the mycelium stops growing. The last part of visit was to the laboratory for quality controls, where other staff performed tests on the spawn.
Concentration in Spawn manufacturing: the birth of a Transnational Corporation When International Mushroom Ltd was set up, it had to compete with representatives of other spawn producers in Ireland such as Darmycel UK (a division of Darlington Mushroom Laboratories Limited), Hauser England, and Le Lion. A couple of years later, the number of competitors increased with the entry into the Irish market for spawn by representatives of Italspawn, Euro-Semy Spawn, Le Champion, and Sylvan.[16]
In September 1998, a publicity report in The Mushroom People (p. 7) said that Sylvan and International Spawn had joined forces by establishing an alliance. The main reasons given were "an ever increasing demand for improved quality mushrooms", the "ability to maintain a competitive edge", "to avoid duplication of research effort and to combine the resources of the two organisations."
The "alliance" was in fact an acquisition that had taken place in May 1998, and the new company "Sylvan Ireland" became a subsidiary wholly owned by Sylvan Inc[17]. This acquisition in fact increased the range of mushroom strains, as well as the level of technical advice, that the plant in Navan offered to growers. Before the acquisition Sylvan had three technical advisors in Ireland for mushroom growers using Sylvan spawn. They joined the combined team of both companies. Sylvan also modernised the plant in Navan between 1999 and 2000 with an investment of $3 million, and introduced the blender technology as described above.[18]
The reasons for the acquisition, according to the publicity article were actually very close to the reality of the spawn market in Ireland. As we will see in other chapters, the expansion of the Irish mushroom industry had reached its peak in the mid 1990s, and by 1998 a process of consolidation was under way. With the stabilisation of total output of mushrooms in Ireland, competition for clients became more intense. Sylvan, an US spawn firm, had entered the European market in 1991. The company had started to sell its spawn in Ireland and in Holland. After acquiring two major spawn producers in Europe, Hauser and Somycel, Sylvan set up a product distribution centre in Co. Armagh to distribute Somycel, Hauser and Sylvan spawns in Ireland (The Mushroom People, June 1993). It would have been difficult for International Spawn to survive on its own, let alone to keep its market share. Competition had become definitely tighter. Only transnational corporations (TNCs) can put into circulation the volume of capital needed to compete in the world spawn market.
Sylvan Inc. claims to be the world's larger producer of mushroom spawn with a share of between 55 and 60 per cent of the world spawn market in 2004.[19] Its origins, however, were more modest. They can be traced back to 1937 with the establishment of Butler County Mushroom, Inc. in West Winfield, Pennsylvania. It was an underground enterprise in a limestone mine. In 1966, the company acquired a larger limestone mine in Worthington, Pennsylvania, to produce mushrooms. This expansion made Butler the largest producer of fresh mushrooms in the US.[20]
Strong competition in the 1970s in the North American mushroom market led the company to expand production but also to diversify its commercial activities. In 1981, Butler acquired an above-ground large farm in Northern Florida, which it named Quince Corporation. It was kept as a separate operation. In the same year, the company also patented its spawn production and built a modern spawn plant near Kittanning, Pennsylvania, which was reorganised in 1984 as an independent subsidiary, Sylvan Spawn Laboratory. By the end of the 1980s, Sylvan Spawn Laboratory had become the second largest producer of Spawn in the US.
The growing division, however, was not doing that well. First Butler decided to close the farm in West Winfield, and next changed the company name to Moonlight Mushroom, Inc. The underground farm in Worthington was yielding annually over 22,000 tonnes of mushrooms at the end of the 1980s and employed 1,000 workers (The Republic of Ireland produced only 22,000 tonnes in 1988). Quince Corporation was producing over 8,000 tonnes per year. Together, the two farms produced over 9 per cent of all mushrooms in the US. But while Quince could modernise its production system and increase its production by 25 per cent, Moonlight production remained static.
Finally, a labour dispute ended up with the closing down of Moonlight Mushrooms in 1993. The firm wanted a wage cut for pickers of 50 cents per hour, and to limit the company's contribution for their health care. The workers and their union, The United Steelworkers, rejected the proposal and the company decided to close the farm. By that time the group had been reorganised as a public company, Sylvan Foods. The new company decided to concentrate its resources on their more profitable farm group in Florida and on their booming spawn division. In 1994, Sylvan Food sold the assets of Moonlight Mushrooms to Snyder Associated Companies Inc. The new owners reopened the mine as a non-union farm.
The expansion of the spawn division took place chiefly in the 1990s with the construction or acquisition of two spawn production plants in North America, five in Europe, one in Australia, and one in South Africa. In Europe alone, Sylvan started its expansion with the acquisition of Somycel S.A in 1991 (France), the largest spawn company in Europe at the time, and Darlington Mushroom Laboratories Ltd (England), of which Darmycel was a division. The operation cost $18 million. In 1992, Sylvan acquired for $3.8 million the Swiss based company Hauser Champignonkulturen AG. Hauser had also production in England (Hauser UK). [21]
By 1994, spawn production had become the chief commercial activity of Sylvan and the company changed its name to Sylvan, Inc. because, in the words of its Chairman, Dennis C. Zensen, "our research and production activities now focus on spawn and other technological oriented fungal products." While mushroom net sales were about $65 million in 1990, they went down to $29.3 million in 1996[22], and accounted for $29.5 million in 2003[23]. On the other hand, while spawn net sales were worth $5 million in 1990, they went up to $49.8 million in 1996, and to $66.8 million in 2003.
It looks, according to these figures, that concentration in the production of spawn is far easier and quicker than in the production of mushrooms. In fact, while a high level of investment in updating the production system in Quince farms yielded new records in productivity, crop yields, and product quality in 1995, the company could not improve the profitability of the previous year. I will look into this question in another chapter in relation to the mushroom industry in Ireland. For the moment, I will say that concentration in spawn production allows for higher levels of investment in product development, the production of higher quality mushroom spawn and a higher control of the market. And it is less risky to invest money in the production of spawn than in growing mushrooms.
At present, research, improvement of strains, and production of inoculum, is a separate division in Sylvan. It takes place in two inoculum production and research centres, one in Kittanning, Pennsylvania, and the other one in Langeais, France. These two inoculum production centres supply Sylvan's ten spawn production plants in the world. The company was able to invest in Research and Development alone $1.5 million in 2003, and $2.0 million in 2002[24]. This high level of investment has allowed Sylvan "to maintain the genetic stability of its mushrooms strains to withstand bacterial, fungal, and viral contamination that can wipe out a grower's crop."[25] If we add to this crop predictability the competitive advantage of an economy of scale, we can understand the reasons for Sylvan expansion drive and market success.
The latest victim of Sylvan's rapid growth, however, has been Sylvan itself. Sylvan's expansion in Europe did not stop in the mid 1990s. An increasing market demand for Sylvan spawn at that time preceded the inauguration of a spawn plant in Horst, Holland; the modernisation and expansion of the spawn plant in Yaxley, England; and the construction of a new plant in Budapest. By the end of the 1990s, they also owned the spawn plant in Navan, Ireland. In 2002, however, Sylvan hired the services of a Boston investment banking firm to help them explore options to increase shareholder value. Later (18th Nov. 2003) a local publication in Pennsylvannia revealed that the company was in fact looking for a buyer[26].
Sylvan Chairman and Chief Executive Officer, Dennis Zensen, said in a statement to the media on 15th May 2002[27]: "We have been committed to optimizing shareholder value since Sylvan was formed in 1989. However, we do not believe our accomplishments are adequately reflected in Sylvan's share price."
In fact, Sylvan's common stock on the Nasdaq Stock Market for 2002 and 2003 showed a steady decline in the value of shares, as we can see below[28]: SeeTable Below
2002
2002
2003
2003
high price $
low price $
high price $
low price $
1sttrimester
12.30
11.05
10.65
8.85
2nd trimester
13.26
11.21
11.50
9.37
3rd trimester
14.00
11.69
10.61
9.85
4th trimester
12.23
10.18
12.25
9.75
The company had also entered into a steady decline of annual operating income, net income, and net income per share. Net sales had gone down in 2000 and 2001, but started to rise again in 2002: see table below
n million dollars
2003
2002
2001
2000
1999
Net Sales
95.0
88.2
85.9
85.9
89.8
Operating income
5.7
9.1
11.0
11.5
10.6
Net income
2.8
4.7
5.8
6.7
6.1
Net income per share (not in millions)
0.55
0.86
1.06
1.18
1.00
I cannot go into the details of why Sylvan was experiencing this crisis, or consolidation, after its extraordinary growth. The company has made public only a small amount of information. According to company sources, margins were narrower in the mushroom and spawn segments mainly because selling and administrative expenses increased. But also the sales of spawn products, Sylvan's most important operation, were down 4.6% in 2003 in relation to 2002 because of farm closures in the UK and a reduction of sales because of competition in France. In 2002, sales of spawn products had gone down 3.7% in relation to 2001[29]. More was going to be revealed when another corporation acquired Sylvan.
In June 2004 Snyder Associated Companies Inc (based in Pennsylvania) finalised a deal with Sylvan's shareholders for $63 million in cash and assumed $32 million in debt to acquire the Sylvan group. The shareholders got $12.25 per share[30]. Snyder had actually made an earlier and lower offer, at $11 per share, to buy Sylvan in 2002, but it had been turned down. The shares of Sylvan rose 20 per cent, with the stock closing at $12.06, the week in which Snyder made its offer(November 2003). In the newly merged company, Snyder's family members own 84 per cent, and Dennis Zensen owns 14 per cent, which is the same share he had before the merger[31]. Snyder, a small construction company when two brothers founded it in 1941, included in its portfolio oil, gas, sand and gravel, cement, candy, a 65-room motel, a bank for farmers, a Florida orange grove and the underground mushroom farm that Sylvan used to own in Worthington, Pennsylvania.
According to Mark Snyder, Snyder executive and family spokesman, "Sylvan needed to make a change. Wall Street makes certain demands, and expectations are quarter to quarter.... Sylvan doesn't fit the mold of a Wall Street company today." Don Smith, Sylvan's chief financial executive added that "you can't grow quickly when you own that much worldwide [55-60 per cent]." [32] That is, the bigger you are, the more capital you need, because the bigger your investments must be. Changing market conditions had negatively affected the economic performance of Sylvan in spite of its leadership in the world spawn market. As Zensen had hinted, the "optimizing shareholder value" was the ultimate goal of the company. That is, at the end of the day, the economic performance of a corporation is measured in the value of its shares. The company therefore started to look for a buyer who would buy the shares as high as possible.
On the other hand, the logic behind the acquisition appeared to be a need for higher levels of investment to maintain the level of growth that Sylvan had set in during the 1990s, but now at a bigger scale. In the market economy companies which do not expand fall behind, because their competitors also try to improve their market performance. And Sylvan has been loosing ground, for example, in France.
For Snyder, Sylvan was also an opportunity for diversification and an investment opportunity. After the acquisition Snyder had increased its staff only by one third, but mushrooms had become its most important operation. And although Mark Snyder declared they were "going to put the brakes on things until we get Sylvan digested" he had an eye in the developing markets for mushroom spawn of China and India[33]. China alone accounted for 70% of the world production of all cultivated mushrooms in 2003.[34]
In Europe the main competitors of the new company are Amycel S.à.r.l. in Vendôme France., which is part of Amycel Inc (a division of Monterrey Mushrooms, US and also Sylvan's main competitor in North America), Euromycel (France), Italspawn (Italy), and Le Lion (France). The market is quite concentrated in North America, with seven companies in the US and 3 in Canada producing the entire mushroom spawn that growers use in North America. In Europe the companies already mentioned control the European market, but there are a number of smaller spawn producers in "nearly each European country."[35].
NOTES: [1] Europe lagged behind Asia in the cultivation of mushrooms until the 20th Century. A Chinese man, Wang Zeng, had described the cultivation of shii-take mushrooms in China in 1313 (Van Griensven 1988: 12). This work, however, only deals with the cultivation of mushrooms in Europe and the USA. According to Vedder (1978: 17), mushrooms were cultivated for the first time in Europe in the area of Paris in 1650. [2] I will not discuss here the peculiar biology of the mushroom. Vedder (1978: chapter 3) offers detailed information about that matter.
[4] A "pure culture" contains only mushroom mycelium grown on a nutrient base of manure or malt extract stabilised with agar. It is free, in theory, from foreign organisms (Vedder 1978: 228).
[7] The white Agaricus bisporus is the most common commercially cultivated mushroom in America and Europe. Shii-take (Lentinus edodes) is very common in Japan, China and Korea, and its cultivation is over thousand years old. Other cultivated mushrooms such as Paddy straw, Oyster, and Velvet-stemmed Agaric are very popular in Eastern Asia. Some of these types (ie. Oyster and Shii-take) are nowadays cultivated in Europe and North America. The only farm cultivating wild and exotic mushrooms in Ireland is Gourmet Mushrooms Ltd., in County Meath. This dissertation, however, does not deal with any of these cultivated mushrooms. Its main focus is the social relations derived from the cultivation of Agaricus bisporus in Ireland, although some comparisons will be drawn from, chiefly, Holland and the USA.
[8] Hybrid strains are the product of cross breeding between different groups of bisporus or between bisporus and other species of mushrooms.
[9] Walton became the managing director of the European division of Sylvan in 1995. The Sylvan group is the largest spawn manufacturer in the world. I deal with the rise of Sylvan below.
[10] He was speaking of Sylvan, Hauser and Somycel. As we will see, at the time Walton was speaking, Sylvan had just acquired Hauser and Somycel. Until 1992, Walton was the managing director of Hauser, UK. [11] The ultimate goal of the technical advisor from a spawn company is to sell the spawn of his company (personal communication from one of the advisors of a spawn company).
[13] Unless I specifically mention growers from the Republic of Ireland, or Eire, or Northern Ireland, when I say Ireland or Irish, I refer to both North and South.
[14] I complement missing information in O'Rourke's account with Vedder's (1977) description of spawn production.
[16] To trace the incorporation of these companies into the Irish market, I have looked for their advertisements in The Mushroom People,(1988-1992). This has been to date the only publication for the mushroom industry in Ireland (North and South). The second most regular publication has been The Mushroom Newsletter, edited by Teagasc since 1997. The Mushroom People was launched in December 1984 as a private initiative of the Kernan group and Reen Compost, located in Counties Armagh and Tyrone.
Bibliography: Boyd, William and Michael Watts (1997) 'Agro-Industrial Just-in-Time: The Chicken Industry and Postwar American Capitalism' in David Goodman Michael Watts (eds.), Globalising Food: Agrarian Questions and Global Restructuring , London: Routledge
Fritsche, G. (1988) 'Spawn: Properties and Preparation', in L.J.L.D van Griensven The Cultivation of Mushrooms, 1st English Edition, Darlington Mushroom Laboratories Ltd. (England) and Somycel S.A. (France)
Fritsche, G. and A.S.M. Sonnenberg (1988) 'Mushroom Strains', in L.J.L.D van Griensven The Cultivation of Mushrooms, 1st English Edition, Darlington Mushroom Laboratories Ltd. (England) and Somycel S.A. (France)
Gormley, T. Ronan (1987) 'Handling, Packaging and Transportation of Fresh Mushrooms' in An Foras Taluntais, Proceedings of the 5th National Mushroom Conference, Kinsealy Research Centre, Dublin Lewontin, R. (1998) 'The Maturing of Capitalist Agriculture: Farmer as Proletarian', Monthly Review 50, 3
O'Rourke, Mel (1989) 'Irish Mushroom Spawn' in Proceedings of the 7th National Mushroom Conference, Teagasc, Kinsealy Research Centre, Dublin
O'Rourke, Mel (1990) 'Development of Irish Mushroom Spawn', the mushroom people, vol. 2a, no. 1, July 1990
Van Griensven, L.J.L.D (1988) 'History and Development' in L.J.L.D van Griensven The Cultivation of Mushrooms, 1st English Edition, Darlington Mushroom Laboratories Ltd. (England) and Somycel S.A. (France)
Vedder, P.J.C. (1978) Modern Mushroom Growing, 1st English Edition, Educaboek, Culemborg (Netherland) and Stanley Thornes, Cheltenham (England)
Walton, M. (1987) 'Management of Hybrid Strains for Quality', in An Foras Taluntais, Proceedings of the 5th National Mushroom Conference, Kinsealy Research Centre, Dublin
Walton, M. (1993) 'Quality control in spawn production', The Mushroom People, vol. 3a, no. 28, July 1993
6/5/2007 8:36:50 AM DEAR FRANCISCO,
THE POINT : THE PROCESS OF DEVELOPING...YOU SHOULD START NOT WITH THAT WHAT MIKE SAID BUT WITH EXPLANATION HOW MSS DR. GERDA FRITSCHE DEVOLOP THE U1 AND U1 CROSSING AGARICUS BISPORUS{!!!] STRAINS.
...may God hold you in the palm of his hand"
k.sz. SZUDYGA, POLAND
10/16/2008 12:37:31 PM This article is very beneficial to my research work and thanks a lot. M.Nabakanta Singh, India
1/13/2009 10:07:42 AM As Laboratory staff rising to factory manager at White Queen 1966-1977 I was very interested to read the above article. I met several of the people mentioned (Dr Sinden, etc from the Hauser Organisation which took over White Queen in about 1968, and adopted WQ rather than Hauser production methods when they opened a spawn factory in France) However since moving to Guernsey I had had not contact with the industry and wondered what had happened - I passed WQ a few years ago and was pleased to see that it was still there
John David, Guernsey
10/6/2009 2:17:20 PM I own a USPTO issue plant patent (number 27) for a mushroom. The inventor is Louis F. Lambert. could you possibly refer me to more information about Mr. Lambert? I am trying to identify who painted the 2 very detailed illustrations that accompany the patent.
Thanks for your time. very insightful website by the way.
Peter Gerace Peter J. Gerace, Murrells Inlet, SC
10/7/2009 11:31:39 AM Peter: I'll write a note about your request, maybe someone will get back with information. That's the best I can do. send on a contact email in case we get some new information for you. ed., Ireland
10/7/2009 3:25:47 PM My contact info is
Pgerace
@
Boothcompanyinc.com
I've contacted the Lambert Spawn Company...Hopefully they have the info on record.
Thanks for the post.
Peter Peter J. Gerace, SC
8/10/2010 4:40:09 PM it gives me lot of information about mushroom history. i am a struggler for oyster mushroom. i don't have good supply of spawn. so i want to manufacture my spawn by my own. so please guide me. my no. 9860663946 tushar bhakare, akola, maharashtra, India
12/28/2010 5:48:56 PM hai
I am from kerala . i completed my pg in Biotechnology. i & my friend planned to start a mushroom seed manufactuing unit. we need your valuable . instructions , & advice.
my id raishyarun_19@yahoo.co.in
thanking you Raishy , India
9/22/2012 11:15:49 AM Very nice article,I m also a mushroom grower since1993.i want to ask that w r seasonaly grower.u'r govt.charge income tax on such farmer's or not.pl.mail me at - classic_mushroom@yahoo.com Chander, Haryana(India)
6/30/2013 11:27:35 AM Dear
I want a franchise or collaborative arrangement for manufacturing and supplying Sylvan Spawn in India. Please guide on how to o about it.
Thanks & Regards'
Rajesh Singla
spawnindia@gmail.com
0091-9255299622 Rajesh Singla, India
7/8/2013 12:36:53 PM Dear,i am spawn lab head. I liked this article very much. it is very useful article to know what is spawn means.It really express the spawn production in good way. it gives the focus on how the spawn maker should take care of the spawn lab. Manisha Karpe, weikfield foods pvt ltd.Pune(India)
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