Transparency From Spore to Supplement: KÄÄPÄ Biotech’s Approach to Manufacturing Functional Mushroom Ingredients
- Alistair Hatch
- 2 hours ago
- 6 min read
This is the second article in a six-part series exploring critical themes shaping the future of functional mushrooms, in partnership with Finnish biotech company KÄÄPÄ Biotech.
In the evolving landscape of the functional mushroom industry, transparency has emerged as a cornerstone of consumer trust, product integrity, and scientific credibility. As the functional mushroom market rapidly grows (see the first article in this series by KÄÄPÄ Biotech), together with the trending consumer awareness and demand for evidence-based nutraceutical products, it is essential to ensure traceability from cultivation to final extract.
The Importance of Traceability in the Nutraceutical Industry
Traceability is the ability to document and verify each stage of the supply chain [2]. It is fundamental to maintaining product integrity and meeting evolving regulatory requirements [1], from health claims to country specific labelling regulations. In the nutraceutical sector, which relies heavily on complex botanical and fungal ingredients, traceability is crucial to prevent adulteration, substitution, and contamination.
Research underscores traceability’s role in enhancing consumer safety, combating food and supplement fraud, and building market confidence [1][2]. For functional mushroom ingredients, advanced methods such as batch-specific Certificates of Analysis (CoAs) serve as indispensable tools. These techniques authenticate the species identity and confirm the presence and concentration of bioactive compounds, ensuring that the final product matches the label claims and therapeutic promise [1].
Transparency in the Functional Mushroom Industry
Functional mushrooms represent a diverse and complex category of natural ingredients, each species characterized by distinct bioactive compounds that underpin their functional potential as recently highlighted in KÄÄPÄ Biotech latest white paper Measuring What Matters . Given this complexity, transparency across the supply chain from cultivation to extraction and labeling is critical. It ensures product authenticity, verifies quality, supports regulatory compliance, and ultimately delivers reliable health benefits to consumers [1].
Authenticity and Efficacy
Unlike synthetic supplements, the efficacy of functional mushroom ingredients depends fundamentally on their species-specific bioactive compounds, which are shaped by precise growth conditions and extraction methods. Transparency around the entire ingredient journey, from spore to extract, is essential to guarantee that consumers receive authentic, functional mushroom-derived bioactive compounds rather than diluted myceliated grains or adulterants [3].
As highlighted in the white paper [4], focusing solely on generic markers like beta-glucans overlooks the critical, species-specific bioactive compounds that drive the actual health benefits and customer satisfaction, underscoring the industry’s need for rigorous transparency and standardized quality measures [1][2].
Ingredient Origin Matters
KÄÄPÄ Biotech cultivates its mushrooms in state-of-the-art indoor cultivation facilities located in Finland, utilizing advanced climate control and automation technologies to create optimal growing conditions [5]. This controlled environment enables consistent production of high-quality fruiting bodies, ensuring that each batch meets stringent standards for bioactive compound content and purity [4].
In contrast, Chaga (Inonotus obliquus) is sustainably wild-harvested from the pristine, untouched forests of Finnish Lapland, where it thrives naturally on birch trees. This wild-harvesting approach follows strict environmental guidelines to preserve the delicate forest ecosystem while sourcing chaga at their peak potency.
Together, these complementary methods, precision indoor cultivation for most species and responsible wild harvesting of chaga, reflect KÄÄPÄ Biotech’s deep commitment to ingredient integrity, sustainability, and delivering authentic, traceable functional mushroom products of premium quality.
Mushroom Fruiting Bodies vs. Myceliated Grain
The functional mushroom market faces challenges due to inconsistent ingredient quality and the lack of transparency [6]. Many products labeled as mushroom extracts are actually myceliated grain blends, where mycelium is grown on grain substrates, resulting in high levels of grain polysaccharides and low concentrations of the species-specific mushroom bioactive compounds.
These products can have significantly lower levels of key compounds compared to fruiting body extracts, which contain the relevant bioactive compounds. Misleading labelling practices exacerbate the problem, with some products ambiguously marketed as “mushroom” products without clear disclosure of whether they contain primarily mycelium, fruiting bodies, or grain fillers [7].
Both EU and the US regulation require clear labelling and accurate ingredient information. Transparent labelling and ingredient traceability are essential to help consumers make informed choices and ensure product authenticity and regulatory compliance. [8].
The Role of Certification
EU Organic certification establishes rigorous requirements that ensure cultivation practices prioritize environmental sustainability, chemical safety, and full traceability. Under these standards, the use of synthetic pesticides, herbicides, and fertilizers is strictly limited, simultaneously promoting soil health and biodiversity in mushroom cultivation. This is particularly important for mushrooms, which have a well-documented capacity to bioaccumulate contaminants such as heavy metals from their growing environment.
By enforcing strict limits on chemical inputs and monitoring production processes, the certification helps mitigate risks of contamination and ensures product safety. Furthermore, EU Organic certification mandates comprehensive traceability through systems, providing transparency and accountability throughout the supply chain. Collectively, these measures guarantee that functional mushroom products bearing the EU Organic label are cultivated and processed in ways that respect ecological balance and deliver pure, high-quality ingredients [1][9].
Setting the Industry Standard
KÄÄPÄ Biotech operates under a vertical integration model in the functional mushroom industry, managing cultivation, extraction, and packaging in-house to ensure quality, traceability, and supply stability. With China controlling over 90% of the global supply, this model helps KÄÄPÄ Biotech reduce risk and maintain consistency compared to non-integrated brands that rely on third-party suppliers, often in Asia. This approach positions the company as a leader in reliable, high-quality mushroom production [11].
At the core of KÄÄPÄ’s production lies its patented NordRelease® extraction technology. This Ultrasonic-Assisted Extraction (UAE) method offers a more efficient way to extract bioactive compounds from mushrooms compared to traditional water extraction. NordRelease has been rigorously evaluated, and validated by the European Food Safety Authority (EFSA), confirming its compliance with stringent EU safety, quality, and regulatory standards [10]. By utilizing this proprietary extraction process, KÄÄPÄ ensures optimal preservation and concentration of key bioactive compounds, thereby maximizing the efficacy and the functional benefits in its functional mushroom products.
Each product batch from KÄÄPÄ Biotech is accompanied by comprehensive Certificates of Analysis (CoAs) that list the concentrations of the key bioactive compounds [4]. These CoAs are generated through analytical testing using validated methods, ensuring precise quantification of critical constituents of the species-specific bioactive compounds responsible for the intended health benefits.
This high level of data-driven transparency not only enables formulators to accurately assess ingredient potency and suitability for specific product applications but also empowers consumers with confidence in the product’s authenticity and quality [9]. By providing verifiable, batch-specific information, KÄÄPÄ Biotech addresses common industry challenges related to variability and adulteration, setting a benchmark for consistency and reliability in the functional mushroom market.
Building Trust Through Transparency and Traceability
In today’s rapidly expanding functional mushroom market, transparency and traceability are indispensable to overcoming challenges of quality inconsistency and reliability. KÄÄPÄ Biotech’s integrated approach from spore to extract provides a model for the industry by delivering high-integrity, Nordic-origin mushroom ingredients that comply with the highest scientific, regulatory, and quality standards.
As consumer demand for effective and authentic mushroom-based products continues to grow, companies like KÄÄPÄ Biotech are establishing essential benchmarks in transparency, quality assurance, and sustainability that will be the drivers of the future of this booming sector.
References
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Aung, M. M., Chang, Y. S. (2014). Traceability in a food supply chain: Safety and quality perspectives. Food Control, 39, 172-184.. https://doi.org/10.1016/j.foodcont.2013.11.007
Wasser, S. P. (2014). Medicinal Mushroom Science: Current Perspectives, Advances, Evidences, and Challenges. Biomedical Journal, 37(6), 345-356. https://doi.org/10.4103/2319-4170.138318
KÄÄPÄ Biotech. 2025. Measuring What Matters: Aligning Consumer Needs and Benefits with Bioactives. White paper. https://www.nordicmushrooms.com/white-paper/
“Functional Mushroom Biotech KÄÄPÄ Bags €900k Investment to Scale Operations.” 2025. Nutraceutical Business Review, April 15. https://nutraceuticalbusinessreview.com/kaapa-biotech-functional-mushroom-900k-scaling-investment
Knight, Kirstin. 2023. “Mushroom-derived supplements ‘subject to widespread mislabelling’.” Vitafoods Insights, February 20. https://www.vitafoodsinsights.com/regulations/mushroom-derived-supplements-subject-to-widespread-mislabelling-
You, Hong, Evelyn J. Abraham, Jason Mulligan, Yucheng Zhou, Maureen Montoya, Jennifer Willig, Bo-Kai Chen, Chin-Kun Wang, Li-Shu Wang, Athena Dong, Mark Shamtsyan, Haiuyen Nguyen, Andrea Wong, and Taylor C. Wallace. 2022. “Label Compliance for Ingredient Verification: Regulations, Approaches, and Trends for Testing Botanical Products Marketed for ‘Immune Health’ in the United States.” Critical Reviews in Food Science and Nutrition 64 (9): 2441-2460. https://doi.org/10.1080/10408398.2022.2124230
Haslam, Olivia. 2024. “Functional Mushrooms for Cognitive Health.” NutraIngredients, December 4. https://www.nutraingredients.com/Article/2024/12/04/functional-mushrooms-for-cognitive-health/?utm_source=chatgpt.com
European Commission. (2023). EU Organic Farming Certification and Standards. https://ec.europa.eu/info/food-farming-fisheries/farming/organic-farming_en
Haslam, Olivia. 2025. “EFSA Approves Alternative Mushroom Extract Process.” NutraIngredients, May 7. https://www.nutraingredients.com/Article/2025/05/07/efsa-approves-alternative-mushroom-extract-process/
Artzi, Gali. 2025. “Are Functional Mushrooms Ready for Prime Time?” PeakBridge VC, September 25, 2025. https://peakbridge.vc/are-functional-mushrooms-ready-for-prime-time/