Too Attractive to Be Just a Fad... Matcha Craze Shows No Sign of Cooling Despite 170% Price Surge [The World is Z Gold]

Young Consumers Fall for Matcha
Vibrant Green Color and Wellness Trend Drive Popularity
Rising Demand Pushes Prices Up

Editor's NoteGeneration Z (those born in the late 1990s to early 2010s) are recognized as a generation that leads culture and trends in a rapidly changing era, setting new standards across society. In [The World is Z Gold], we shine a light on the lives and values of Generation Z around the globe, exploring how they are transforming society.

Matcha, known for its rich nutritional content and vibrant green color that looks great on social media, is gaining popularity among young people, leading to a sharp increase in its price.

According to the Global Japanese Tea Association on September 27, the price of tencha (the raw material for matcha) traded at auction in Kyoto, Japan, reached a record high of 8,235 yen per kilogram (about 77,500 won) as of May. This is about 1.7 times higher than the previous year and far exceeds the previous record high of 4,862 yen (about 45,800 won) set in 2016.

Dua Lipa drinking a matcha beverage. Dua Lipa Instagram

Matcha is a powdered tea made by finely grinding young tea leaves grown in the shade, characterized by its deep color and rich aroma. It is used not only in beverages but also in a variety of foods such as bread and ice cream. In particular, matcha is known to be rich in antioxidants such as catechins, which are believed to help support cardiovascular health.

The surge in matcha prices is due to a sharp increase in global demand, while supply has decreased because of poor harvests in Japan, the main exporting country. Structural issues such as the aging of farming communities and worsening climate conditions in Japan are further exacerbating the supply shortage of matcha.

'Young People Fall for Green'... Matcha Market Experiences Rapid Growth

The matcha craze among young people is driving the expansion of the global matcha market. According to market research firm Research and Markets, the global matcha market is expected to grow from $3.84 billion last year to $4.24 billion (5.9 trillion won) this year. By 2029, it is projected to reach $6.48 billion (9.0272 trillion won).

Although matcha has traditionally been associated with Asia, its market is now rapidly expanding in Western countries such as the United States and the United Kingdom.

Market research firm NielsenIQ reported that retail matcha sales in the United States have increased by 86% compared to three years ago. On Instagram, there are as many as 9.52 million posts related to '#matcha,' reflecting its immense popularity. The United States currently accounts for about 22% of the global matcha market.

Aaron Vick, head of purchasing at U.S. tea importer G.S. Haly, told the Associated Press, "This fall, we purchased the highest-grade Japanese matcha for the U.S. market at a price 75% higher than last year. Prices for mid- and lower-grade matcha are also expected to rise by about 30 to 50%." He added, "Chinese matcha is generally less expensive than Japanese matcha, but prices continue to rise due to surging demand. It will be a challenging time for matcha enthusiasts."

In the United Kingdom, matcha beverage sales in June and July this year increased by 114% compared to the same period last year. Market research firm Grand View Research identified the United Kingdom as the fastest-growing matcha market in Europe, with the number of specialty shops selling matcha beverages tripling over the past year to 1,096 locations. Lisa Harris, founder of food consulting firm Harris and Hayes, told the Financial Times, "Drinking matcha lattes symbolizes 'conscious consumption,' emphasizing health and trends. For Generation Alpha, matcha will become as common as sushi."

"Matcha Appeals to Health-Conscious Consumers"

On the 1st, an employee is preparing a matcha beverage at a matcha specialty store in Yongsan-gu, Seoul. Photo by Yonhap News

Why are young people so enthusiastic about matcha?

Julia Mills, a food and beverage analyst at market research firm Mintel, explained, "Matcha will not disappear from consumers' choices anytime soon," noting that matcha contains not only antioxidants but also L-theanine, which has a calming effect, making it attractive to health-conscious consumers.

Mills also said, "Millennials and Generation Z are more likely than other generations to have tried matcha. The traditional method of pouring powder and hot water into a small bowl and whisking it creates a special appeal for consumers who want to savor their drinks slowly."

The domestic caf? and convenience store industries are also expanding their matcha menu offerings, riding the wave of the global matcha craze.

Starbucks Korea announced that sales of 'Jeju Matcha Latte' and 'Jeju Matcha Cream Frappuccino' in the first half of this year increased by more than 30% compared to the same period last year. Twosome Place launched three new 'Twosome Matcha' beverages (Iced Matcha, Matcha Cream Latte, and Strawberry Matcha Latte) in July, selling over 500,000 cups within just two weeks of launch.

Convenience store chains are introducing desserts that combine matcha with existing popular products or feature matcha as the main ingredient. Earlier this month, Yonsei Dairy, in collaboration with CU, launched four new matcha desserts: Matcha Chocolate Fresh Cream Bread, Matcha Cream Castella, Matcha Chocolate Mammoth, and Matcha Cream Roll Cake.