The tradition of Phillips family innovators continued. In 1962, William's sons, Donald and Marshall, formed a partnership and expanded the family growing operation into the packaging, marketing, and transportation of white mushrooms throughout New England. Donald and Marshall's dedication to growing their fathers' work led to an operation that over the years grew until it was producing 12 million pounds of white mushrooms per year.
In 1979, Donald and Marshall felt a need to diversify their business and began experimenting with shiitake mushrooms that were grown indoors on supplemented sawdust logs. Their commitment to this project enabled them to become the first successful indoor shiitake growers in the U.S. Additional mushroom varieties, innovative packaging and nationwide promotional campaigns expanded the specialty mushrooms division dramatically over the next 13 years. In 1993, Phillips Mushroom Farms divested the white mushroom business in order to concentrate all of its resources on specialty mushrooms.