The problem
EPS foam is light, cheap and protective, but it is made from fossil fuels, crumbles into beads that blow around, and is rarely recycled in practice. Many councils do not collect it, and once it reaches rivers and seas it persists for a very long time, breaking into microplastics.
Paper pulp and cardboard inserts help, but they do not always match foam’s shock protection or thermal insulation. Brands trying to drop plastic have needed something that performs like EPS but leaves no lasting trace. Since April 2022 the UK Plastic Packaging Tax has added a cost too: MMC notes the rate was GBP 223.69 per tonne from April 2025 for packaging with less than 30% recycled plastic.
The product
Mushroom Packaging was pioneered and patented by US company Ecovative, which stopped making packaging itself and licensed the technology to partners. MMC holds the exclusive licence to produce it in the EU, UK and Ireland. Each insert is grown in a mould to the exact shape of the product it protects.
MMC pitches it as a direct swap for EPS, polyethylene foam, extruded polystyrene and die-cut inserts. It says the material is naturally water resistant, thermally insulating, can go into food waste collection for anaerobic digestion, and involves no animal products. Customers have included Lush, The Body Shop, Seedlip, Tom Dixon, Raymarine, Selfridges and Flextronics.
The company now calls itself an industrial-scale biomaterials producer. It is accredited to ISO 9001 and has Innovate UK Smart Grant support for MycoShield, a programme to replace EPS in white goods such as fridges and washing machines, which use a lot of foam.
How it works
- Gather waste. Agricultural by-products, mainly the woody core of hemp, form the substrate.
- Inoculate. Mycelium, the root-like network of a fungus, is added to the substrate.
- Mould. The living mix is packed into 3D moulds shaped like the final insert.
- Grow. Over about seven days, mycelium binds the fibres; chitin in fungal cell walls acts as a natural glue.
- Dry. The piece is dried thoroughly, leaving it inert and biologically inactive.
- Return. After use it can be broken up and composted at home or sent to anaerobic digestion.
Timeline
| Date | Milestone |
|---|---|
| 2019 | Magical Mushroom Company founded |
| Jan 2020 | Ecovative announces it will exit packaging and license the technology |
| Aug 2020 | First MMC facility, in Esher, Surrey, starts production |
| 27 Oct 2020 | MMC Holding International Ltd incorporated |
| Mar 2021 | MMC announces large-scale production and its exclusive EU, UK and Ireland licence |
| 27 Jun 2022 | GBP 3 million seed round led by Ecovative, with Ecotricity founder Dale Vince investing |
| 9 Mar 2023 | GBP 1.1 million Innovate UK loan for a UK raw-materials plant |
| Jun 2026 | GBP 600,000 round opened at about GBP 16 million pre-money valuation |
Impact and numbers
In 2021 the Esher plant had capacity for more than a million packaging units a year. In March 2023 MMC said its plants were removing 800 tonnes of unrecycled EPS a year, and that the Innovate UK loan would fund a 10,000 square foot inoculation plant to make up to 3 million kilos of raw material from UK agricultural waste, instead of importing substrate from the Netherlands.
A June 2026 fundraising notice from investment platform Floww says millions of units have been made since launch, about 10 million are forecast for 2026, and the material now achieves price parity with EPS. MMC was raising GBP 600,000 at a pre-money valuation of about GBP 16 million, targeting a GBP 2.4 billion UK and EU market.
MMC lists vibration, edge crush, drop, humidity, thermal conductivity and temperature tests from 70°C to minus 25°C. A 2026 profile in The Organic Magazine adds that hemp captures about 15 tonnes of CO2 per hectare as it grows, a general crop figure rather than a product footprint.
Honest caveats
Changing compost claims. MMC earlier said its packaging breaks down in soil in about 40 days; the 2026 profile says roughly 45 days at home. Results depend on the size of pieces and the compost.
Company claims. Price parity, performance and environmental benefits are stated by MMC or its fundraising partner. No independent life-cycle assessment was found.
Small rounds, high risk. The 2026 raise is small and was promoted as a high-risk investment. Companies House lists the company as active, with next accounts due by 31 December 2026; no insolvency was found.
Earlier plans. Plants in Bulgaria, Italy and Germany were announced in 2021, but the sources do not confirm they were built; MMC now describes Beeston as its production base.
Not for everything. Mycelium suits moulded inserts, not thin films or large flat sheets.
What’s next
MMC is scaling Beeston, working on white goods through MycoShield, and bringing raw-material supply in-house to cut its carbon footprint and price per part. The 2026 round is meant to accelerate manufacturing scale-up and commercial expansion. MMC has said a new design can go from drawing to prototype in about 14 days, which matters for brands launching new products.
Why it matters for Europe and green buyers
For Europe, the EU Packaging and Packaging Waste Regulation, applying from August 2026, tightens rules on packaging, while the UK taxes plastic packaging with little recycled content. Mycelium inserts let brands avoid both, if they match protective and cost needs. Buyers should ask for transit test data, mould lead times and clear end-of-life instructions, and back any compostable claim with evidence.
For India, which has abundant crop residues and a ban on many single-use plastics, grown packaging could use local fibres such as hemp or rice husk. For the world, replacing persistent foam with a material that rots harmlessly cuts plastic pollution at its source.
Sources & image credits
- Magical Mushroom Company, “Company”. https://magicalmushroom.com/company
- Magical Mushroom Company, “Mushroom Packaging”. https://magicalmushroom.com/mushroom-packaging
- Ecovative, “Goodbye, Mushroom Packaging”, January 2020. https://shop.ecovative.com/blogs/blog/goodbye-mushroom-packaging
- Renewable Carbon News, “UK start-up The Magical Mushroom Company moves to large-scale production of plastic-free packaging”, 23 March 2021. https://renewable-carbon.eu/news/uk-start-up-the-magical-mushroom-company-moves-to-large-scale-production-plastic-free-packaging/
- TechCrunch, “UK’s Magical Mushroom Company uses mycelium to replace plastic packaging”, 27 June 2022. https://techcrunch.com/2022/06/27/uks-magical-mushroom-company-uses-mycelium-to-replace-plastic-packaging/
- Magical Mushroom Company, “MMC awarded GBP 1.1m Innovate UK loan”, 9 March 2023. https://magicalmushroom.com/company/news/innovate-uk-15-11-2022
- The Organic Magazine, “Growing a future without polystyrene: inside the rise of the Magical Mushroom Company”, March 2026. https://theorganicmagazine.com/meet-the-plantpreneur/growing-a-future-without-polystyrene-inside-the-rise-of-the-magical-mushroom-company/
- Floww Capital, LinkedIn post on Magical Mushroom Company funding round, 30 June 2026. https://www.linkedin.com/posts/flowwcapital_deals-privatemarkets-raise-activity-7477675678243536897-xM46
- Companies House, “MMC Holding International Ltd, company number 12977802”. https://find-and-update.company-information.service.gov.uk/company/12977802
- Wikimedia Commons, “Candle and its mycelium packaging”. https://commons.wikimedia.org/wiki/File:Candle_and_its_mycelium_packaging.jpg
Images: “Candle and its mycelium packaging”, Lilylily1407, CC BY-SA 4.0, via Wikimedia Commons. Illustrative; maker not identified, not a confirmed MMC product.
