Completed project
Mushroom production waste streams – novel approaches to management and value creation (MU17005)
Publication date: January 22, 2019
Delivery Partner: Xinova
During 2019 this investment investigated the value-adding or cost-saving opportunities related to waste from Australian mushroom businesses – including spent mushroom compost, unused mushroom stems and subprime whole mushrooms. The project team evaluated technologies relating to waste stream management from across the world to identify the most promising approaches for application in the Australian mushroom industry.
Six mushroom operations were visited in Queensland, New South Wales and Victoria to observe current production and waste management practices, market and supply chain dynamics, as well as understand previous trials with waste systems. The team then consulted more than 20 waste-related experts including university academics, biotechnology specialists, food service business owners, private companies, and entrepreneurs. Financial modelling and field trials were conducted to determine the viability of several ideas.
The researchers identified four opportunities for the mushroom industry to pursue further. In total, these solutions have the capability to generate $55 million of operational cost savings and/or new revenue to the industry per year, while utilising hundreds of thousands of tonnes of waste.
Recycling substrate as casing was found to be financially viable, however the current lack of naturally weathered substrate and the continual management and re-pasteurisation is likely to challenge adoption by industry. Combined recycling options (compost and casing) were found to provide the best opportunity for rapid payback, although further trials will be required to weigh cost reductions against any potential decreases in yield and quality.
A pelletiser system, using non-thermal dewatering of spent substrate for on-site energy or off-site sales into energy and fertiliser markets, was found to be a technically feasible and financially viable solution for industry to increase revenues and to generate operational cost savings. Producers with the highest quantities of spent substrate and the lowest sale price have the most compelling consideration.
This involves drying and powderising edible mushroom waste into a shelf-stable powder for high value food markets. ‘Subprime’ mushrooms (including stems) can be used to make powders for markets such as high-margin supplements or ingredients for meat alternative products. This approach provides the grower with a new business income stream, product diversity, longer shelf life, and improved nutritional attributes when compared to fresh mushrooms.
This considered applying edible coatings to fresh mushrooms to extend shelf life and reduce costs and spoilage. While edible shelf life extenders are an exciting opportunity and the products assessed during this research yielded positive results, the pathway to significant operational cost savings or new revenue is undetermined. More time is required for the technology owners to progress regulatory approvals and product development to meet the exact requirements of the industry at scale.
The options were presented to key industry stakeholders for information and in support of further development.
Read about the research and progress in these articles published during the project:
This project was a strategic levy investment in the Hort Innovation Mushroom Fund
© 2026 Horticulture Innovation Australia Limited.
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