The Internet and globalization processes have built many bridges between cultures. That is why, more and more people want to try different experiences and travel. Matcha is one of the things that has been a significant part of Japanese culture for the past centuries but is only becoming popular in the Western beverage industry nowadays. The matcha market is growing rapidly. In this blog post, we’ll check how the industry is expected to perform in the future and how the food and beverage industry can benefit from that. Additionally, we’ll explain more about the most profitable niches in the matcha market, and how to start a matcha business in them if you’re becoming an entrepreneur.
Main Categories of Matcha Businesses
Matcha Retailers
There are a lot of matcha enthusiasts out there. With the popularity growth of matcha, a lot of people are switching from coffee or black tea to matcha beverages. That’s why more matcha retail businesses are expected to open in the next few years. Some examples of such enterprises are matcha subscription boxes, matcha eCommerce websites, or coffee and tea shops that specialize in matcha products.
Matcha Cafes & Tea Houses
These establishments focus on matcha beverages and food. They are usually small venues that offer to-go cups for people who want to get their morning or afternoon caffeine boost. These matcha tea houses also offer other beverages and sell matcha powder to enthusiasts who wish to prepare their drinks at home.
Matcha Wholesale Suppliers
Trading matcha in bulk quantities can be very profitable. The reason for this is that the demand for the ingredients is high and growing. However, the biggest challenge for such businesses is finding matcha producers. With limited supply, a lot of well-established companies have contracts with matcha farmers and producers.
Matcha Food Manufacturers
Some of the large companies have started producing snacks and other food with matcha. If you want to open a matcha business, that can be a suitable one. You can start small and sell online only. Check out some of our articles on how to sell products online, how to sell food from home, selling candy online, or selling cookies online.
Key takeaway: The worldwide matcha market is expected to grow by 10.2% per year for the next 10 years. Its size in 2023 is $2.7 billion. In 2033, it’s expected to be $7.1 billion.
The Current State of the Matcha Industry
In 2023, three countries will make up around 90% of the matcha industry size. These countries are China, Japan, and India. Other states such as Australia, the US, the UK, France, and Germany have much smaller matcha markets compared to Japan or China. In South America, the caffeine tea battle between yerba mate vs matcha is decisively won by the former.
Matcha Industry in Japan
With a market size of $897.1 million, Japan has the second-largest matcha industry in the world. The beverage is most commonly consumed in the traditional way as hot tea. Matcha also has a central role in the Japanese tea ceremony. This makes it an integral part of Japanese culture and history. The country is the largest producer of matcha worldwide. There are regions in Japan that are known for their exceptional quality matcha. These are Uji, Shizuoka, and especially Nishio.
Matcha Industry in China
Market research shows that the size of the Chinese matcha market is approximately $1.2 billion. This makes it the largest in the world. China is also known as a producer of the precious green tea powder. Even though the country produces large amounts of this green tea, it still imports a lot of it from Japan. The reason behind that is that Japanese matcha is of far better quality than Chinese. The Japanese have been perfecting the plant for more than eight centuries. A lot of the ingredient-grade matcha sold around the world is made in China.
Matcha Industry in the US
According to consumer data, the US matcha market’s size is $88.7 million. Even though it’s much smaller compared to Japan or China, it’s growing rapidly. In the US, matcha is popular as an ingredient in various baked goods, desserts, or matcha drinks such as lattes. Being a healthier alternative is among the main reasons for matcha’s popularity. Another argument for that is the fact that matcha gives consumers a much steadier and longer period of focus and alertness compared to coffee. Nevertheless, the caffeine battle between matcha vs coffee is categorically won by the latter.
Matcha Industry in Other Countries
Other countries that have fairly large matcha markets are India, South Korea, Australia, Canada, and other Western countries. In India and South Korea, the drink is mostly consumed as hot tea. In other countries, matcha is used both in the traditional way or as an ingredient for cooking and matcha drinks.
The Future of the Matcha Market
The matcha market size for 2023 is expected to be $2.7 billion. However, in the next 10 years, estimates show that it will grow by 10.2% per year. This means that by 2033, the worldwide matcha market size will be $7.1 billion.
Short-Term Growth of the Matcha Market
In this period, the ingredient will steadily become more popular in developed countries. Its high price is one of the reasons why it’s less popular in developing countries. The main reason for the growth of the matcha market will be the increasing trend of consuming organic products and health consciousness.
Mid-Term Growth of the Matcha Market
In about 5-6 years, matcha products will increase in popularity. They will be more widely available in large hypermarkets. The increased demand will lead to an increase in matcha production and availability. Still, the supply will not be able to catch up to the demand and the prices of this tea variety will remain high.
Long-Term Growth of the Matcha Industry
Matcha’s applications in culinary and skincare will become more popular. This will boost the demand for the ingredient and increase its sales. More and more people will choose fancy matcha beverages instead of coffee in venues. All these facts combined are among the reasons why the matcha market size is expected to be $7.1 billion.
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Frequently Asked Questions about the Matcha Industry
So, you already know what is matcha and why the ingredient has seen rapid growth in recent years. Below you will find additional answers to some of the popular questions you might have.
Is Matcha in Demand?
Yes. There is an increasing demand for matcha and not enough supply. The main reason for this is that Japan is the biggest producer of the ingredient, but it’s becoming popular worldwide. Furthermore, the process of growing quality matcha requires a lot of labor and know-how.
Why Is There a Low Supply of Matcha?
Most matcha tea suppliers buy the ingredient from producers in Japan. There are very few other regions where matcha is grown. This results in a scarce supply of the popular green tea powder. As matcha demand increases faster than supply, prices of different types of matcha are expected to rise as well.
What Makes Matcha Popular?
Matcha is a great ingredient for both beverages and food. It can be consumed as a traditional tea or in matcha drinks such as lattes, cocktails, or Frappuccino. There are also many recipes with matcha. Some of the popular foods that contain the precious green powdered tea are ice cream, cakes, muffins, pastries, and other baked goods.