Brewer's spent grain (BSG) and wheat bran (WB) are industrial byproducts that accumulate in millions of tons per year and are typically applied as animal feed. Since both byproducts show a great potential as substrates for fermentation, the approach developed in this study consists of utilizing these lignocellulosic byproducts for biomass production of the medicinal fungus Hericium erinaceus through submerged cultivation. To increase the biological efficiency of the bioconversion, acidic pretreatment was applied yielding a bioconversion of 38.6% for pretreated BSG and 34.8% for pretreated WB. This study shows that the complete degradation of (hemi) cellulose into monosaccharides was not required for an efficient bioconversion. The produced fungal biomass was applied in a second fermentation step to induce the secondary metabolite erinacine C production. Thus, biomass was produced as a functional food ingredient with erinacine C contents of 174.8 mg/g for BSG and 99.3 mg/g for WB based bioconversions. (C) 2016 Elsevier Ltd. All rights reserved.