Is Matcha the New Coffee?

If you've visited any cafe in the past few months, you'll unmistakenly see matcha amongst their specials. You can have it in hot and cold forms, though cold is generally preferred here. Apart from classic matcha, you'll see flavored options like strawberry matcha, pistachio matcha and the like. The flavours help mask some of the crude matcha taste, still foreign to an Indian palate.

Native to Japan, matcha is a finely ground powder made from specially grown and processed green tea leaves. Unlike regular green tea, where leaves are steeped and then discarded, matcha involves consuming the entire leaf in powdered form, which is whisked into water to make a frothy, vibrant green beverage.

To be honest, the first time I had matcha, I hated it. It felt weird in the mouth, almost too leafy and green. But, a few trials later and accompanied by fruity or nutty flavors, I've acquired a liking.

Globally, the market is worth $4bn, with India at ~$140mn, and growing at ~8% CAGR. llLargely similar to the size of $3.6bn kombucha market globally but still much smaller than specialty coffee at $101bn. Recently, YourStory Media did a full feature on matcha covering innovations such as Maverick & Farmer Coffee’s seasonal Aam Panna Matcha or Magnolia Bakery's signature cake and buttercream blended with matcha. (Read more). Matcha contains less caffeine than coffee, and some suggest it has health benefits, which appeals to the wellness crowd. Its vibrant green also plays well on social media.

However, the global matcha rush has led to shortages. Today, most of that tea is grown in Japan, though countries like China and Vietnam also boast matcha crops. Japan, though, is where the high-grade good stuff comes from. The complex supply chain is unable to keep pace with the demand, especially as producing matcha is a slow, laborious process.

Here’s how it works:

- Shading: About six weeks before the annual harvest begins, tea plants are covered from above to block out light and slow photosynthesis

- Harvesting: In May, the annual harvest begins and tea leaves are hand-picked, steamed and dried

- Sorting: The leaves are sorted for quality (or “grade”), destemmed and deveined

- Grinding: The resulting leaves, called tencha, are ground by stone mills into the fine green powder we call matcha

Add to that a population of aging farmers, and supply chain bottlenecks at every stage of production, from grinding to stone-milling to packaging. Most high-quality matcha is packed by hand, because it’s so delicate. Finally, at distribution, huge clients like Starbucks command a majority of the supply, leaving smaller cafes and chains out of luck.

But the real question is: Is this just a fad?