Austin and Kat Just Bet Mushrooms Can Pull Margin Where CBD Couldn't

You stock a CBD brand that built its name on premium sourcing. Now they want five mushroom SKUs.

The decision Austin and Kat actually made

Austin and Kat, the Seattle-based, 100% employee-owned pet wellness brand, expanded its functional mushroom collection with three whole-mushroom powders and two concentrated liquid extracts for dogs. The company formulates, sources, and makes everything at its NASC-certified Seattle facility, the same in-house, small-batch approach that built its CBD line.

The mushroom products use organic, whole-mushroom ingredients from M2 Ingredients, a Southern California company and North America's largest grower of functional mushrooms. M2 cultivates and processes everything at its Vista, California facility. Austin and Kat founder and CEO Kat Donatello said the company wouldn't put its name on a mushroom product until it could stand behind every step of the sourcing. The species matters, the parts of the mushroom matter, and how it's grown and extracted matters even more, according to Donatello.

The line includes three powders: single-species Turkey Tail and Lion's Mane, made with 100% active ingredients and no fillers, plus 7 Mighty Mushrooms, a seven-mushroom blend meal topper. Two concentrated extracts round it out: Lion's Mane Extract for cognitive function and healthy nerve signaling, and 6 Mighty Mushrooms, a six-species blend for daily immune and digestive support. Suggested retail is $29.95 across the line.

The products are available now through austinandkatwholesale.com and through Pet Food Experts, Southeast Pet, Independent Pet Supply, IPS South, and Sunburst Pet Supply.

The play mushrooms give you that CBD doesn't anymore

Functional mushrooms let you tell a premium sourcing story in a category where ingredient quality varies widely, according to the company. The company's Director of Education Lilly Miller said interest in functional mushrooms is growing fast, and ingredient quality varies more than most shoppers realize.

Austin and Kat is betting whole-mushroom, U.S.-grown positioning differentiates when most customers can't tell the difference by reading a label. Miller said what the company loves about this line is that it gives retailers something honest to talk about: whole mushrooms backed by a growing body of research, made by the same people who answer the phone.

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The format question you need an answer to

Powders and extracts test whether pet parents will buy standalone supplements or if they still only buy mushrooms baked into treats. Austin and Kat is running pure-play products, whole-mushroom powders and concentrated extracts, not chews with mushrooms as one ingredient among several.

If powders move, you've got a format with dosing flexibility. If they sit, you know the category still needs the treat as the trojan horse. Track sell-through by format, not just by brand.

Where this costs you if you're wrong

The failure mode is stocking five SKUs from a known brand and discovering your customers wanted mushroom chews, not mushroom powders they have to measure and mix. You've got capital tied up in a format the category may not be ready for yet.

The other risk: you stock Austin and Kat's mushroom line at the suggested retail, and your customer can't tell the difference between whole-mushroom and mycelium-only by reading the front panel. If you can't explain the sourcing distinction in one sentence at the register, the price comparison wins.

Our read: mushrooms are the margin hedge, not the CBD replacement

Austin and Kat started in 2014 when Kat Donatello made hemp chews in her kitchen for her own dogs. The company has grown into a custom Seattle facility while keeping its original mission: creating supplements good enough for their own pets. The throughline hasn't changed: know every supplier, test every batch, and make nothing the team wouldn't give its own dogs.

That's the same story the brand told when CBD was new. Now mushrooms are where this brand is looking for the next play. If Austin and Kat's mushroom line sticks, watch whether other supplement brands follow the same whole-mushroom, U.S.-sourced positioning.

The tell will be whether powders and extracts actually move. Stock it if you've got the brand's CBD line already performing and you want the test case. Skip it if you're still trying to figure out whether functional supplements can pull traffic at all.

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