Labs to Lion's Mane: Young entrepreneur finds his bright future in funky fungi

In the fields of Songjiang, a quiet corner of Shanghai, a young entrepreneur has found his calling in the world of fungi.

Pang Xiaobo, a microbiologist turned business owner, is the driving force behind Shanghai Peiyuan Health Technology Co Ltd, a company that has made its mark by pioneering the cultivation and commercialization of Lion's Mane Mushroom (Hericium erinaceus).

Known for its unique appearance and renowned medicinal properties, this mushroom has become the cornerstone of Pang's entrepreneurial journey.

Pang's journey began not in the world of business, but in the research labs of the Shanghai Academy of Agricultural Sciences. After earning a master's degree in microbiology, specializing in medicinal fungi, Pang was captivated by the potential of edible mushrooms, particularly Lion's Mane, a fungus with a striking resemblance to a lion's mane and a reputation for its health benefits.

"Lion's Mane Mushroom is not just a delicacy," Pang said. "It's packed with nutrients and known for its medicinal properties, from improving digestive health to boosting cognitive function.

"I saw an opportunity to cultivate it year-round in a controlled environment, filling a gap in the market and making it more accessible to people who could benefit from its health-promoting properties."

In 2010, armed with his research background and a vision, Pang founded "Peiyuan," an agricultural brand focused on the cultivation and processing of Lion's Mane Mushroom.

His ambition did not stop there. He wanted to create a business that could support the entire supply chain – from breeding and cultivation to research, product development and sales.

It wasn't an easy journey. Lion's Mane Mushroom is notoriously difficult to grow, requiring a precise temperature, humidity and oxygen control to flourish. A minor mistake in the growing environment can result in the mushrooms turning misshapen, bitter and unsellable. Pang was undeterred.

After experimenting with small-scale cultivation, Pang set up a more advanced facility in Zhenjiang, Jiangsu Province, in 2017. By 2019, he had expanded to a 3,000-square-meter greenhouse in Songjiang, allowing for year-round production.

"The key is creating the right conditions," Pang says. "Lion's Mane needs stable temperature control, proper airflow and precise humidity levels. When everything is in balance, you get the perfect mushroom."

Pang's efforts were not just about perfecting cultivation; he was equally focused on the business side of things. In 2021, Peiyuan purchased the exclusive rights to a high-yield variety of Lion's Mane Mushroom, "Hu-Hong 3," developed by the Shanghai Academy of Agricultural Sciences. The acquisition of this strain – an achievement that took years of research – allowed Pang to further differentiate his brand in the market.

"I've always believed in leveraging professional knowledge to build a niche. With the right product and research, we could offer consumers a premium, high-quality Lion's Mane Mushroom that's consistent, nutritious and full of health benefits," Pang says.

Today, Peiyuan's product line includes a wide range of items: fresh mushrooms, dried mushrooms, snack foods, meal replacements and functional foods. Pang developed products specifically designed for stomach health, such as protein powder, breakfast cereals and probiotics.

These products cater to a growing market of health-conscious consumers who value functional foods for their preventive and therapeutic qualities.

One of Pang's key strategies has been to connect Peiyuan's brand with traditional Chinese culture. Inspired by the folklore surrounding Lion's Mane Mushroom, the company created a charming cartoon character, "Hou Xiaonan," to represent their brand. The character, dressed in traditional attire, is featured on a series of collectible figurines. "We wanted to create a brand that not only promotes the health benefits of Lion's Mane but also reflects the rich cultural heritage of China," Pang said.

Peiyuan's approach to branding and product development has resonated with consumers. The company has received positive reviews online, with its flagship Taobao store boasting a high customer rating of 4.8 stars and a 97 percent positive feedback rate.

This strong market presence has helped Peiyuan secure recognition as a national high-tech enterprise and has driven the company to further innovate within the field of edible fungi.

One of Pang's future plans is to create a fully integrated, intelligent factory capable of large-scale, automated cultivation and deep processing of Lion's Mane Mushroom.

Additionally, he plans to expand into offline retail, supplying hotpot restaurants, supermarkets and even the emerging tea beverage market.

"We want to make Lion's Mane Mushroom accessible to more people," Pang says. "We're not just selling a product; we're promoting a lifestyle – a healthy, balanced life that incorporates the benefits of traditional Chinese medicine."