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Marketplace®

Daily business news and economic stories

Companies look to make green off of matcha’s growing popularity

Companies look to make green off of matcha’s growing popularity
Dimitrios Kambouris/Getty Images for Adeam

This story was produced by our colleagues at the BBC.

Originating in China but made popular in Japan, matcha has taken over the menus of coffee shops and bakeries around the world, with mega-corporations like Starbucks and Dunkin’ cashing in. But with the surge in demand, are some putting quantity ahead of quality? 

Once rarely seen outside of Japan, the powdered green tea — made from the leaves of the Camellia sinensis plant — is now available all around the world, in supermarkets, chain coffee shops and even cocktail bars.

Along a busy street in Toronto, Canada, there are advertisements which read “Come try the drink of the season – our maple matcha latte.” Stepping into Japanese bakery Neo Coffee, the theme continues.

Kengo Torikai is the head of operations at Neo. “We have matcha cookies, matcha roll cakes, and also we have matcha lattes, matcha teas,” he explained.

How would he describe the cafe’s matcha enthusiasts? “It’s more younger generations,” he said.

Customer Anna Forrest explained why matcha is now their drink of choice. 

“Definitely the health benefits,” they said. “There is still caffeine in it, so it is definitely a good substitute for coffee. There’s health benefits towards stress, anxiety, like brain health and stuff like that.”

Matcha sales are booming. So much so that the value of the global market is predicted to jump from $2.3 billion this year to $2.89 billion in 2028.

As is often the case with new trends in 2024, social media has played a huge role. On TikTok alone, there have been over 42 million posts for matcha recipes.

The tea has been used in Japanese ceremonies since the 12th century.

“It was actually brought over by monks from China, from what I’ve understood. Matcha was first brought to the southern island of Kyushu and it was started off as something that monks would use to heighten their focus during meditation,” explained Max Ando, co-founder of premium matcha brand Nekohama, based in LA. 

A green cake on a plate.
Matcha made an appearance in the dessert served at the White House during a State Dinner for Japan’s former Prime Minister Fumio Kishida in April.
Drew Angerer/AFP via Getty Images

The company grows tea on the volcanic island of Kyushu in Japan and sells it to customers around the world. It also supplies high-end restaurants at $60 a bag.

As it stands, there’s currently no regulation of matcha and there’s no industry standard for “ceremonial grade.” That’s the highest quality of powdered green tea, used mainly in traditional Japanese tea ceremonies. It’s something Max would like to change. It could help protect farmers in Japan, he argued.

“There is a big issue now with a lot of the farmers going out of business, especially the smaller ones,” he said. “There’s issues because of the fact that every year Americans and Western companies will go to Japan and will speak to the farmers and ask for a cheaper product to get better margins. The only way for the product to get cheaper is to reduce the quality of the product, which then will decrease the experience that people are going to have with the matcha.”

As well as making growing matcha more sustainable, Ando said a recognized body overseeing the industry would be better for customers too.

“There’s a lot of mis-marketing of premium grade products, there is no governing body like there is in coffee. In matcha, people are putting ceremonial grade matcha on products that you can’t consume without a lot of sugar. There’s a lot of things being done right now by wholesalers that we think could be done better.”

Despite this, Ando is still happy to see matcha on Western menus. “They’re bringing the product which is so tied to Japan to the world, and I think it’s brought so much positivity and positive interest into Japanese culture,” he added.

One thing that is clear, matcha’s future is bright — and green.

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