Kinoko-Tech Inks Deal to Roll Out Fungi Products in Australia, From Zero-Waste Burgers to Mycelium Muesli Bars

Israel’s Kinoko-Tech has partnered with Australia’s Metaphor Foods to commercialise a range of mycelium protein products – including sausages, flapjacks and chips – down under.

How would you like some fungi in your morning granola bar?

Kinoko-Tech, an Israeli mycelium protein startup, is asking why not. Growing mycelium on grains, legumes, nuts, and food industry sidestreams, it is gearing up to launch a new kind of protein that serves as an alternative to both meat and plant-based foods, as well as a base for innovative functional foods.

The company has signed a strategic commercial agreement with Metaphor Foods, an accelerator and innovation arm of ingredient manufacturer Hela, to produce large-scale quantities of mycelium protein and supply it to manufacturers, ahead of a rollout in 2025.

Kinoko-Tech’s clean-label “meat-like” products are highly nutritious and better for the planet, while tackling our growing food waste problem. Think burgers, sausages, patties, chunks and cubes rich in protein and fibre, but made by fungi fed on grains, lentils and often-discarded items like vegetable peels.

“We are trying to get them to be meat-like but instead come in a way that is familiar for people to use,” explains co-founder and CEO Jasmin Ravid. “These products all have a very short ingredient list of substrate and mycelium. One example is patties of black lentils, mycelium, and salt. Another example is chickpea, vegetable cutoffs (side stream), mycelium, and spices.”

These centre-of-plate foods will be complemented with products like flapjacks, nut and protein bars, and chips, which leverage side streams like okra and use natural sweeteners. “These offer consumers convenient, healthy, unprocessed, protein-packed options for everyday snacking,” Ravid tells Green Queen.

Hitting on taste, health and sustainability with clean labels

Kinoko-Tech leverages solid-state fermentation in a process licensed from Yissum, the Hebrew University of Jerusalem’s tech transfer company.

“The uniqueness of the technology is the ability to use locally supplied ingredients (including side streams) for the fermentation process,” says Ravid, who co-founded the startup with CTO Daria Feldman and COO Hadar Shohat in 2019. “This method efficiently converts the substrates into high-protein, fibrous products.”

The startup suggests that its production process is zero-waste, since the “end products combine mycelium and substrate”. It means everything that goes into the fermentation platform comes out as part of the product. Moreover, the fermentation tech produced “minimal emissions” compared to other manufacturing processes.

A life-cycle assessment conducted on data from its pilot site found that even at a small scale, the mycelium protein’s greenhouse gas emissions are lower than growing tomatoes.

But while sustainability is important to many consumers, how food tastes and feels is an even more crucial consumption driver. In Australia, where Kinoko-Tech is aiming to enter the market, 46% of people are dissuaded from eating plant-based meat due to its unsatisfactory flavour, and another 30% say the same for texture.

Kinoko-Tech is hoping to break that mould by offering a new kind of meat replacement. But while it resembles tempeh – another fermented food that is based on soybeans – Ravid says the mycelium protein offers more: “Our products are designed to be versatile. The centre of the plate products has a juicy, fibrous texture that is quite different from tempeh. The taste is also more umami and rich.”

It’s also delivering on the nutrition front, with high amounts and fibre (a nutrient many of us underconsume), and all nine essential amino acids, making it a complete protein. The short ingredient lists, meanwhile, will allay fears of overprocessing and appeal to the 68% of consumers who are happy to pay more for products that only contain recognisable ingredients.

The startup plans to market the mycelium protein to consumers as “a sustainable, nutrient-dense alternative that’s easy to prepare in various cuisines, celebration legumes, vegetables (if those will be part of the substrates), and fermented food”.

Who are these consumers? “Health-conscious individuals, flexitarians, and vegetarians seeking high-quality, unprocessed, protein-rich foods that align with their health and wellness goals,” says Ravid. “We aim to provide options that not only meet their dietary preferences, but also enhance their overall lifestyle.”

Kinoko-Tech plans Europe expansion post Australia launch

Ravid reveals that Kinoko-Tech is producing its mycelium starter kit at a facility in Israel, and can already produce enough protein to manufacture 120,000 tonnes of end products annually. These final products will be produced by Metaphor Foods at a site in Melbourne.

“We aim to begin commercial production in Australia in 2025, beginning on a small scale of 24-48 tonnes annually and reaching 700+ tonnes annually once the partnership is fully established, positioning us strategically to serve growing markets,” she says.

The scale-up would also help Kinoko-Tech bring down the price of its protein, another key pain point for consumers. “The key differentiation of the technology is the unit economics and low capex needed for production. As we scale the production, we will get price parity with traditional animal proteins,” suggests Ravid. “Our goal is to offer a cost-effective, sustainable alternative without compromising quality.”

The company is focusing on “forging strategic partnerships” to enable local production utilising its fermentation technology and mycelium starter kit. The partnership with Metaphor Foods is part of this strategy, which will enable it to produce the mycelium in Australia, followed by an expansion into Malaysia, Singapore, Indonesia, and New Zealand.

“We are currently in discussions with several food manufacturers across Europe and the US to create more partnerships like these,” outlines Ravid. “Our plan is to launch in Australia with Metaphor in 2025, and in Europe with one of our other partners.”

She suggests that Kinoko-Tech’s non-GMO strain has a long history of safe use in food, making regulatory pathways easier – it’s not considered a novel food in the EU, and the startup already has self-affirmed GRAS in the US. “We are actively engaged with the regulatory process in Australia,” she says. “We are working closely with local authorities to ensure compliance with all necessary regulations. We are confident that we will meet all the requirements in time for our planned launch in 2025.”

The agreement with Metaphor Foods also includes a strategic investment. “We have successfully completed an initial funding round and are currently focusing on scaling our operations and supporting our market launch alongside our partners,” she says. “As we move forward and sign more partnerships, we will evaluate opportunities for additional funding to further accelerate our growth and expand our reach.”

Investors have been doubling down on fermentation startups amid a dip in interest in the larger alternative protein space. In the first three quarters of this year, fermentation protein companies have exceeded their funding totals from all of 2023, surpassing $550M in nine months (versus last year’s $443M).

Meanwhile, more and more companies are looking to mycelium for cleaner-label meat analogues, including Beyond Meat and Nosh.bio, whose Koji Chunks are made from just one ingredient. Similarly, Elmhurst 1925 has forayed into plant-based meat with its single-ingredient TerraMeat hemp chicken. And in the UK, Vegbloc has come up with a whole-food-based protein that’s designed to replace, not imitate, meat.