Entrepreneur and food startup expert Eldad Arnon led product and tech teams in fast-growth companies including Delivery Hero and Infarm before co-founding his fungi farm business called Tupu in Berlin. The Common Table talked to him about growing gourmet mushrooms, the realities of sustainable urban food production and his vision for changing how we produce food.
Sophie Lovell: How did you come to be working in food start-ups?
Eldad Arnon: Two reasons: firstly, I love food and cooking. Both my parents are great chefs and it’s always a pleasure to eat what they cook. Secondly, I like to grow stuff; my flat is full of plants and mushrooms growing all over the place. I also like growing concepts and ideas, which led me to build Tupu.
Sophie Lovell: What lessons did you learn from the two food start-ups you worked with before you started Tupu?
Eldad Arnon: Previously, I was involved with Delivery Hero and InFarm, both of which were also in the food tech space. However, there are still huge areas needing improvement, such as energy consumption, lengthy supply chains, and food production methods. The supply chain disruptions during Covid really made me think. How can we cultivate more efficiently but also keep production local? I’m a big believer in local food production. This was the main motivation for me to build Tupu.
Sophie Lovell: So you decided to try growing gourmet mushrooms?
Through the indoor vertical farming industry for leafy greens, it was clear that to grow produce in an economically viable manner, we need crops with short growth cycles of a couple of weeks. I thought about which other crops grow fast and can be made even more economically viable. Mushrooms were the obvious solution. I saw a big opportunity in the fungi world technologically, economically and agriculturally.
Mushrooms are an incredible crop to work with. As human beings, we haven’t explored the fungi kingdom nearly enough. They are a superfood full of antioxidants, fibre and vitamins as well as being a good protein source. They also have a meatless centre of the plate application in dining. But fungi are not just food, they have pharmaceutical and cosmetic benefits too that are only just beginning to be touched upon in Western medicine and beauty industries. It’s really an emerging sector. Not to mention the applications in vegan leather, food supplements, sustainable packaging and so on.
In the past couple of years, however, there has been something of a ‘shroom boom as we are only now starting to unlock the enormous potential of this kingdom. But the way we produce mushrooms hasn’t changed in the last 50 years. It’s manual, it’s labour intensive, it’s inefficient, and the resulting harvest gets shipped all over the world.
As human beings, we haven’t explored the fungi kingdom nearly enough.
Sophie Lovell: Who are the world’s main producers of edible fungi at the moment?
China is the biggest producer of fungi in the world, but their market is mainly domestic. Europe’s biggest exporters are Poland and The Netherlands.
Orlando Lovell: How does Tupu’s production differ from traditional production?
Eldad Arnon: It’s totally different. Traditional mushroom farming is relatively “low-tech”, It is usually done on shelves in a controlled environment with high humidity, a specific temperature and specific airflow. It’s a decades-old process that hasn’t changed much. Gourmet mushrooms are mainly grown in substrate bags and harvested by hand. The biggest challenges are increasing labour costs in a time of labour shortages, harvesting on time and harvesting enough to make them both profitable and affordable.
Mushrooms grow very fast, around four per cent per hour, and if you don’t harvest on time, mushrooms start to sporulate: to reproduce, which creates cross-contamination, loss of weight, flavour, texture, and quality. There’s a lot of waste in agriculture too, mainly because we don’t have efficient cultivation systems to harvest on time.
Mushrooms grow very fast, around four per cent per hour, which is almost 100 per cent per day – it’s exponential.
At Tupu, to reduce costs associated with labour and harvesting time, we are developing a robotic arm able to automate harvesting from the substrate bag straight to packaging. This doesn’t mean we are eliminating the need for human beings in the process, but we are making the lives of the human beings involved easier. Our robots can work 24/7 and they can take over the entire harvesting mission.
We also have cameras that monitor the growth rate of the mushrooms and can recognise when a mushroom is ready to be harvested based on different mathematical equations that we created together with a camera visual algorithm that we developed. This means we can forecast the yield, harvest on time, as well as reduce waste and labour costs.
There’s another aspect of this technology, which is the controlled environment agriculture. In traditional farming, you create the environmental conditions that mushrooms need. We are building a self-optimising climate system. We collect data with sensors that monitor relative humidity, temperature, light intensity, airflow, CO2 level and substrate moisture. Thanks to this real-time data on the mushrooms’ performance, we are able to, for instance, decrease the temperature by one per cent to slow down the growth to be ready for harvest on Monday instead of Sunday.
Orlando Lovell: Is this system already built and in place?
Eldad Arnon: We are currently conducting validation tests at our farm.
Orlando Lovell: Start-ups are usually perceived as hyper-capitalist dog-eat-dog companies that can fall as fast as they rise, which doesn’t seem to be a very sustainable way of working. Can you see a future where start-ups work together to improve the food system rather than just trying to corner the market for themselves?
Eldad Arnon: I think that in order to be successful, in order to be big, you need to have collaborations. Working with other start-ups within your network will help you to leverage their expertise and expand faster. How I see it is that even if your ambition is to become a world leader or a monopoly you can only do it by collaborating with others – with synergies and symbioses between start-ups. I think people are generally becoming more collaborative as they increasingly sense there is a need to do so. You are also more prone to error if you try to do everything on your own.
Even if your ambition is to become a world leader or monopoly you can only do it by collaborating with others – with synergies and symbioses between start-ups.
Orlando Lovell: Is there anything you can talk about that you are collaborating on right now?
Eldad Arnon: One example is that we are taking our spent substrate and working with different circular organisations to turn it into food for insects, or creating biogas. Because our mission at Tupu is to create a better food system, by closing the loop together with other companies that have a similar approach, we can achieve that. Tech collaborations are also very much an option. If we can find a company that develops a better solution for camera vision detection, we will definitely work with them. It’s all about finding where we can connect the dots. The edge can come from finding solutions by combining them with other people’s solutions.
The edge can come from finding solutions by combining them with other people’s solutions.
Orlando Lovell: Could you describe what the stages of your circular system would look like at scale?
I’m happy to elaborate here on the vision side in terms of our end goal. Imagine creating self-reliant cities with a circular approach. This would mean, for example, going to any coffee shop here and take all of their used coffee grounds sterilise them, add some nutrients and spores and turn them into new substrates for growing fungi. So we are turning waste into raw materials and from those raw materials we grow food to feed people here in Berlin.
Then our spent substrates can be given to farmers as organic fertiliser, but they could also be used for insect feed and other things. So essentially, we take waste, make food out of it and from our side streams or byproducts we can create other benefits for the environment.
Orlando Lovell: What else can mushrooms grow on apart from coffee grounds?
Eldad Arnon: Mushrooms can grow on pretty much any biomass, even paper – although they wouldn’t be very tasty or very pretty. There are plenty of waste biomaterials around that could be used from leftover woodchips to brewing and coffee waste, and other agro or food waste.
Mushrooms can grow on pretty much any biomass, even paper – although they wouldn’t be very tasty or very pretty.
Orlando Lovell: How else is this kind of production sustainable beyond the impact on raw materials?
Eldad Arnon: I do believe that by growing in an urban environment you create more jobs. As a company, we really care about employees and we care about normal working conditions, we equip them with gear that they need, check that no one is overworking and so on. I think creating more job opportunities within the city, as well as treating your employees well, is already having a relatively good impact.
Sophie Lovell: Right now you just have one farm in Berlin, what are your plans for the expansion of Tupu?
We would like to open more farms within Europe. and focus on not just fresh mushrooms but also on the different applications that mushrooms have. Whether it’s cosmetics or food supplements, our systems can grow a diverse range of varieties. We would also like to become the most resource-efficient farms.
Sophie Lovell: How many tonnes do you produce at the moment?
Eldad Arnon: About three tonnes a month on 600 square metres in Berlin city.
Sophie Lovell: Wouldn’t it be interesting to turn the former hangar space of the former Tempelhof Airport into a huge indoor farm with a whole hangar full of mushrooms? We should get some funding and do that.
Eldad Arnon: I believe that in the future every space like that will convert into food production. The amount of people on this planet is increasing. There’s a massive urbanisation trend. It’s going to be too hot. So a lot of our crops will be indoors and there will also most likely be a lot of disruption in the supply chains. Inevitably we will have to move to local food production that is more sustainable within local regions or even cities. I envision a world in which every free space will become a food manufacturing space, whether it’s basements, rooftops, or tunnels.
I envision a world in which every free space will become a food manufacturing space, whether it’s basements, rooftops, or tunnels.
Orlando Lovell: You are talking about food security.
Eldad Arnon: In 2021, one out of three people on this planet didn’t have access to sufficient food and this will become even more challenging, especially with the climate. Take what’s happening in Spain right now: desertification with lots of arable areas becoming infertile. It’s not going to happen, it’s already happening.
Orlando Lovell: If you have this big-picture understanding, what’s the use of being accessible through supermarket structures, which you are piloting at the moment, when you are already doing pretty well supplying the gastronomy sector?
Eldad Arnon: Our mission is to feed the world to a certain extent. We want our fresh and sustainable mushrooms to be accessible to everyone, not just people who can go and eat them in restaurants. Going into retail gives us better exposure to all of the communities here in Berlin – and people keep asking us where they can buy our mushrooms!
Orlando Lovell: I meant rather why use the supermarket structure at all?
Eldad Arnon: It’s a good distribution channel for us. We have other options, like selling directly to the consumers, but this is slightly more complicated in terms of the operations. Let’s say that for now this is a good channel for us to spread our spores.
We are all about regional production and having only a couple of kilometres between our farms and our customers.
Orlando Lovell: But you’re not going to grow mushrooms in supermarkets right?
Eldad Arnon: In order to make it economically viable, you need a certain scale. From the economic perspective, Tupu is building a delicate balance between the right farm size to produce enough mushrooms and keeping production local. We have had opportunities to sell mushrooms to Cologne and Munich, but we are avoiding it at the moment because it’s against our vision. We are all about regional production and minimising the distance between our farms and our customers.
Orlando Lovell: How do you communicate improved values in supply chains to customers? How do you avoid your mushrooms looking just like any others in the supermarket?
Eldad Arnon: Our product is local, fresh, more tasty and has a higher nutrient content, which makes it a no-brainer for consumers. The challenge is how to communicate that. This is a challenge that any product on the shelf in a supermarket is facing. It can be on the packaging but packaging is not always good for the environment. We communicate on the packaging and the point of sale materials, by sharing recipes, linking to articles and wherever else we can emphasise our unique selling points.
Our product is local, fresh, more tasty and has a higher nutrient content, which makes it a no-brainer for consumers. The challenge is how to communicate that.
Orlando Lovell: So should supermarkets do more to change their point of sale in terms of transparency and provenance?
Eldad Arnon: It’s not only retailers, it’s governments. If governments introduced regulations saying no packaging on fresh goods that would make a difference. Why do we need packaging for the apples? We are living in a digital era, you can use your smartphone to scan a QR code and trace where the wares came from, their nutritional value and how to cook them. It feels like we are not making any progress on topics like this which are really, really burning. At Tupu we are always trying to use the most sustainable, paper-based, recyclable plastic packaging wherever we can. Of course, there’s always this trade-off between shelf life and packaging: very sustainable packaging, like paper does not necessarily prolong the shelf life of the product. But still, regulation needs to come from the government not just about sustainable packaging but making information more accessible for consumers as well.
Subsidies are also an issue. Although there are plenty of subsidies for different sectors, including traditional agriculture, urban farming does not get a lot of attention from the government, but this is the future of how to feed people.
Tupu is a Berlin-based start-up founded in 2020 by Eldad Arnon and Daniel Lock. They grow a range of organic gourmet fungi including Lion’s Mane, King Oyster, Grey Oyster, Yellow Oyster and Shiitake mushrooms at their urban farm in the city. Their mushrooms can already be found at several wholesalers, food service operators and restaurants in Berlin including the Michelin-starred restaurant Horváth, Kreativbrauerei and the restaurant BRLO, as well as other upscale caterers and restaurants such as Cookies and Donau101. In November 2023 they raised 3.2 million US dollars to develop their B2C (business to consumer) segment in a seed round.
Cover photo © studio_lovell
