Today we’re exploring the size of the truffles industry in The Netherlands. It’s an exploration that will take a look at the (web)shops, use prevalence, and the expected market size. Although it’s very difficult to find exact numbers about revenue, this blog should be a starting point and a rough estimate. In the end, there will also be an extrapolation to guestimate worldwide usage and revenue numbers.
Based on the calculations below, I estimate the total market for truffles for Dutch people (excluding tourists) to be €17 million. If you would include tourists, the number could easily be twice that. The same goes for international shipping from webshops (and business-to-business). It’s still a relatively small market, one that may be poised to see explosive growth in the coming years (possible legalization in some countries, therapeutic use of truffles).
A Quick Introduction to Truffles
Truffles, as used in this article, are the ‘tangled clumps of mycelial tissue called sclerotia’. Wow, that was a mouthful. Let me try and explain it. Picture a mushroom, the roots (mycelium) are what is underneath them, then picture some clumps or mini stones forming in those. That is what we call (magic) truffles and is the type that is still legal in The Netherlands.
The ‘Drug Information Team‘ explains what is still legal in The Netherlands. “Magic mushrooms are now banned. They are on list 2 of the opium law. Cultivation kits with spores of magic mushrooms are legally available, especially via the internet. Today truffles are sold as a substitute for magic mushrooms. Truffles are legal. The active substances [psylocybin and psilocin] in magic mushrooms and truffles are prohibited. They are on list 1 of the Opium Act.”
You can buy truffles in a ‘smart shop’ or online at about 15 different websites. The truffles are advertised with different brand names and strains, but there are about 4 different ‘families’ of strains that are mostly being used (Mexicana, Tampanensis, Atlantis, Galindoii). You can buy them for anywhere between €11,50 and €22 depending on the strain and size (10 to 20g).
The truffles are being advertised as having different effects (more visual, creative, intensity, etc). But aside from the intensity, there is no research that supports different effects from different strains (psilocybin and psilocin are the only active ingredients, of which the former turns into the latter).
The use of truffles seems to have no negative effects on the user or the wider environment. Little to no crime is involved (at least in The Netherlands) in the cultivation and sale. The government even wins by taxing the whole supply chain.
There are almost no incidents of people needing medical attention. But that is when excluding Amsterdam, where many tourists do truffles in the park without a sitter. In a 2014 report by the ‘Coordination Assessment and Monitoring New Drugs (CAM)’ the number of total incidents needing an ambulance was on average 75 per year (88% of that was in Amsterdam).
Estimating the Market Size
To estimate the market for truffles I’ve taken two different approaches. The first is to look at the production side (producers and shops). Is there an educated guess that can be made about the size of their operations? The second is to look at the consumer side and use prevalence data to estimate the size of the market.
The producers were not that easy to find. That is understandable since the political wind isn’t per se in the right direction. I could find an article (Trouw, Dutch) that interviewed two brothers who have six people working for them on a farm in the green heart at the center of the Randstad. And Vice did a deep dive into their business and history. They report having picked 20 million mushrooms since 1994 (but don’t define the size of a mushroom/truffle).
What is more informative is their ‘investor/b2b website‘ in which they state that they’ve sold through 5000 retailers in the EU and that they have had over 3 million customers (i.e. transactions) through retail sales in The Netherlands last year.
In the Vice article, they also stated that the maximum production capacity would be 18 million kg (if they worked around the clock).
So taking this information into account, I’ve come to the following estimates:
- €50.250.000 based on the 3 million customers/packages sold times the average sale price of €16,75
- Or €37.687.500 if 75% of those customers are Dutch (so excluding account tourism)
- €100.000.000 based on using 1/3rd of the max capacity, selling 1/5th in The Netherlands (biggest assumption) and 15g packages at €16,75
(the chamber of commerce doesn’t have recent information on their finances, but that could be another way to estimate the market)
As mentioned above, the producers say that they sell to over 5000 retailers in the EU. Let’s ignore the fact that it’s illegal to sell it outside of The Netherlands, and use an estimate of 2000 shops/retailers being located in The Netherlands.
This doesn’t fit exactly with other narratives about the number of smart shops. The governing body for smart shops (VLOS) states that there are about 100 smart shops in The Netherlands, of which about half is located in Amsterdam. It is, however, noted that much of the sale of truffles is being done outside of smart shops. The city of Amsterdam is now regulating this with more care.
Much of the sales of truffles happens online. Of the 15 webshops that I found, most look very professional and both cater to the Dutch and international market (shipping is the ‘responsibility of the user’). Alas, it’s very difficult to estimate how much of their sales are to Dutch people (or even what their total sales are) and how much is being bought online versus offline.
Taking this all into account, I’ve come to the following estimates:
- Offline sales in all types of shops: €100.050.000 at 2000 shops, 10 packages per day, 300 days open, €16,75 per dose
- Only smart shops: €7.500.000 at 100 shops, 20 packages per day, 300 days open, €16,75 per dose, 75% local market
- Online sales
- If online accounts for 50% of the local sales, then the conservative estimate would be €7.500.000 for the Dutch market
- So bringing the total (conservatively estimated) market to €15.000.000
One thing that blurs the data between the producers and consumers, is that a significant percentage of the use is by tourists. So they may/are counted in the producer’s side (but I’ve tried to exclude it where possible) but not in the prevalence numbers of Dutch consumers.
The Global Drug Survey (2014 numbers used, but are quite similar for years) states that the prevalence of use last year is 14% in The Netherlands (10,6% globally). The lifetime prevalence of club-visitors was 31.6% and of those in a café was 24.8%.
The CAM report (Dutch) states that most users of truffles are one-time users, of all users only 10% had used them in the last month. The number of people in their survey (mostly between 15-35) that used them in the last month was 1,6%.
Using these numbers and demographic data (CBS) that states that there are about 4 million people between 15-35, and taking them as 80% of the total users of truffles, I’ve come to the following numbers:
- Based on last month usage (x12), x €16,75 would estimate the market at €16.080.000
- Which is similar to using the last year use of 14% and only some using it more than once (total x1.2), €14.070.000
One could argue that the numbers above are a slight over-estimate since those who participate in these surveys may have not been a representative sample of all 15-35-year-olds.
Western Countries Guestimate
Also taking the US estimates into account (NCBI article – based in NSDUH survey, 21 million lifetime users), and the Global Drug Survey results (10,6% last year use). I estimate that the total Western market (at €20 per dose) is around €2.134 billion!
This seems quite large, but also reasonable since the US weed market was estimated at €10 billion (2019) and expected to rise to €80 billion (2027, Grand View Research).
A €17 million Market?
If I take all the numbers above together, I estimate the local truffles market to be around €17.000.000. This number is very close to the use prevalence numbers and sales numbers of offline smart shops and equal online sales. It’s much lower than based on the numbers of the (probably) largest grower, but I find those numbers to be the least reliable and difficult to estimate how much is for export.