Matcha’s Benefits Drive Market Growth

Japanese tea ceremony setting, matcha tea and green tea utensils. Photo credit: ThinkStockPhotos.com

Matcha is taking the world by storm, according to a report by Grand View Research, which predicts the global matcha market will reach $5.07 billion by 2025, rising from $2.62 billion in 2016. The research suggests the North American market will experience substantial growth.

Matcha’s vast health benefits contribute to its popularity. As chronic illnesses such as cancer, diabetes and obesity have become more prevalent, so has health awareness. The tea known for being rich in the amino acid L-theanine and in antioxidants, including epigallocatechin gallate (EGCG). “EGCG present in the product can repair DNA damage caused by UV radiation and controls the proliferation of cancerous cells,” Grand View Research reported in a press release. “Furthermore, high chlorophyll content of the product prevents toxin accumulation in body.” The report says matcha has a higher concentration of antioxidants than other nutritive produce, such as blueberries, spinach, pomegranates and goji berries.

Matcha’s reach keeps expanding as consumers seek healthy beverages. Juices, smoothies and mocktails are a few beverage categories currently incorporating matcha as an ingredient. Mainstream cafes now offer matcha drinks in addition to their standard coffee and tea fare.

Matcha’s three key industry grades: ceremonial, culinary and classic present a range of product and marketing possibilities. Ceremonial grade is the highest grade of matcha, classic is the most widely consumed type and culinary is the category of matcha expected to experience to fastest growth since it is used in cooking. Culinary grade matcha also has the most economic pricing out of the three grades. The classic grade accounts for 56.2 percent of the matcha market and the report forecasts it will remain in the lead while experiencing steady growth up to 2025.

Global matcha market revenue, by application, 2015, (%); Image by Grand View Research

In 2016, the worldwide matcha market amounted to $2.26 billion. The report states this market will undergo a compound annual growth rate of 7.6 percent from 2017 to 2025. Asia Pacific represented the largest segment of global matcha industry revenue in 2016, the report says, because of tea traditions in Japan and China. Additional key consumers are the U.S., Canada, Germany, the UK, France, and Australia, according to the report.

The superior production process of matcha is the reason for its much higher price point than green or black steeping tea and ready-to-drink tea. It is grown exclusively in Japan, primarily in the Kyoto and Aichi prefectures. Matcha production begins with cultivating tencha leaves of the Camellia sinensis plant in the shade, which produces more antioxidant and chlorophyll-rich leaves, which then go through a meticulous grinding process.

However, the report concludes that its price point should not make retailers shy away from carrying the product. “Keeping in mind the high growth rates projected for overall matcha consumption, it is advisable for tea retailers to make space for matcha product in their portfolios. Of the overall tea product portfolios maintained by retailers, 15 percent to 20 percent can be laid out for exclusive matcha product offerings,” states the report.