A mushrooming alternative to styrofoam

(CBS News) Some three million tons of styrofoam products end up in landfills every year and it never disintegrates. One company has an idea to change all that -- and it's a business that's quite literally mushrooming.

In a 40,000-square-foot warehouse, employees of Ecovative Design grow packaging, using organic waste like corn husks and stalks -- and mycelium, the roots of mushrooms.

"That's kind of a natural glue that's growing and bonding this all together," said engineer Sam Harrington, who calls it mushroom packaging. "The magic of fungi takes over, and it literally just self-assembles."

Once the material is mixed up and packed into a mold, it can be formed to any shape -- and it's completely biodegradable.

Twenty-eight-year-old Eben Bayer is the company's CEO. He wants his company, which started as a college project, to be the Dow Chemical of the 21st century.

"Right now, when you get packaging in the mail, it's a pollutant," he said. "You're going to throw it out. Our vision is when you get packaging, it should be a nutrient."

The company has managed to get major contracts with Dell, Steelcase office furniture, and Puma surfboards. But in a market dominated by global plastics conglomerates, the company has yet to make a profit.

"The key here is profit and positive impact," said Bayer. "I think with the right technologies, the right missions, the right business models -- you can have both."

Bayer is testing his product for other uses. The lining on the 8 x 8-foot house he showed us in Ecovative's parking lot is made entirely with mushroom insulation.

"I think we're at just the right universal coordinates for something like this to be accepted," said Bayer. "So that means right time, right place. And there's a real need. The price of these fossil fuels are going up. I think the time is right.

Ecovative plans on opening another factory in Cedar Rapids, Iowa, this month.