The COVID-19 pandemic has forced businesses to adapt, and many have been hit hard. If businesses that have existed for years are feeling the aftershock of the virus's arrival, what does it look like for a startup company?
Desert Pearl Mushrooms, a University of Arizona alumni-founded startup, is one of a number of businesses that has had to be flexible and creative in the face of the pandemic. The company, which produces culinary mushrooms, has been able to pivot with the help of resources provided by the startup incubator they call home – the University of Arizona Center for Innovation.
Located primarily at the University of Arizona Tech Park, the University of Arizona Center for Innovation is a startup incubator network with a mission to support university-affiliated and greater Tucson community startups with customizable programming and a network of experts.
With business development help from UACI, the founders of Desert Pearl Mushrooms have worked to enhance their market strategy, identify new customers and try new community involvement tactics in the wake of COVID-19.
Formed in 2018, Desert Pearl Mushrooms offers markets and restaurants access to fresh and dried gourmet mushrooms and also provides those interested in cultivating their own mushrooms with the spawn and substrate to do so. Tucson-area resorts and restaurants are the company's primary customers, so when COVID-19 affected those businesses, the mushroom supplier felt it, too.
In the face of challenges brought on by the pandemic, the company re-routed where it sells product and altered its production process. While the business is still producing culinary mushrooms, it has put more focus on nutrient- and antioxidant-rich mushroom supplements – touted for immune boosting and other health benefits – to get them to market more rapidly.
"We've been forced to look at various other avenues of distribution, product and product packaging options, and even rethink our distribution quantities and price points," said UArizona alumnus John De Lorenzo, chief financial officer of Desert Pearl Mushrooms. "Our market research requirements have increased in complexity and our competitive landscape analysis has grown significantly."
UACI helped the startup retool its business model and provided a customized facility to help the business reach its diversified markets.
"Desert Pearl Mushrooms is at a point where they need to explore how they're going to scale their operation, and we're helping them to address their business and facilities operations so that they can pivot and continue to grow," said Eric Smith, executive director of UACI.
Desert Pearl Mushrooms was started in 2018 by founder and chief operating officer Jorge Sepulveda, who earned a bachelor's degree in Italian language and literature with a minor in plant sciences from the University of Arizona. The company became a UACI client in 2020 after Sepulveda's colleague Kris Savage, also a UArizona graduate, learned about the supportive resource.
"The UACI has helped us strategize and identify milestones to provide a clear path to meet the future sales goals of our business. We re-evaluated our marketing strategy and found additional city resources through the UACI to help us today and in the immediate future," said Savage, who operates the business along with Sepulveda, De Lorenzo and Trevor Mock, also a UArizona alumnus.
"The business intelligence and market research access at UACI is going to be very helpful to us as we continue to refine our financial forecasts, production and sales strategies," De Lorenzo said. "We're hoping to secure additional real estate with help from the UACI to continue research and development of a few of our more advanced goals."