Think Beyond Latte - Guide How to Innovate with Matcha

Authors: Msc François Le Cam, Msc Luca Bosello, Msc Andrea Derrez

Green is the new gold. Year after year, matcha continues to captivate brands—not just as a tea, but as a powerhouse ingredient that brings health, functionality, and attention to products. Matcha is no longer just the final product, but an exciting ingredient with high versatility. Yet, while the market potential is large, matcha can be tricky when it comes to sourcing, storing, or processing.

--

While supporting a multitude of matcha projects each month, we've mastered the practicalities of development, production, and scaling. In this guide, we share those insights to help you navigate your matcha journey.

What's Included in This Guide:

• Why matcha: Economic outlook, consumer outlook, benefits
• Trending matcha foods and beverages
• How to include matcha in a product portfolio
• Key challenges to overcome for a successful launch
• Why is matcha powder so expensive

 

Economic Outlook on Matcha:

The Billion-Dollar Ingredient Promises A Steady Growth

Matcha has been among the fastest growing ingredients in the beverage and dessert categories. The global Matcha market is continuously growing and is expected to rise by an annual rate of 9.46%* between 2023 and 2028, with anticipated revenue of $5.5 billion by 2027. Its ascent is much more than just a trend; it reflects global interconnectedness and the blending of traditions.

Source: Mordorintelligence, Industry Report: Matcha Market, 2025

The global matcha market is driven by major players like AIYA America, PepsiCo, Breakaway Matcha, AOI Tea Company, and Pique. These companies lead the way in product innovation and market growth. More brands are focusing on premium and organic matcha products, especially ceremonial-grade options and creative ready-to-drink formats.

 

Probably the most representative proof of the matcha trend are Japan’s exports of green tea.

Consumer Outlook on Matcha:

 A Versatile Ingredient for Health-conscious Consumer

Consumer interest in matcha-based products is rising, driven by a demand for health-conscious options with innovative flavors. We can see first hand that brands increasingly seek for the right balance of indulgence with nutrition.

Its chemical composition, including powerful antioxidants catechins (EGCG) that support metabolism, amino Acids (L-Theanine) for relaxation and focus, vitamins (A, C, E, K, B-complex) for improved immune function, minerals such as potassium, magnesium, calcium and iron and fiber promoting gut health, make matcha a superfood. On top of that it steadily boosts energy with caffeine without giving jitters like coffee does.

Changing consumer tastes and creative applications in food and beverages fuel matcha’s popularity as an ingredient. People crave products that offer both wellness benefits and complex flavors. As a result, matcha has found its way into baked goods, savory dishes, and nuanced drinks. From lattes and bubble tea matcha found its way to pancakes and salad dressings, hot or cold, alcohol-infused or not, and often paired with advanced flavors.

 

Matcha has an unmatched versatility. Its use cases span from traditional to contemporary formats and it caterins to a large spectrum of tastes. Its popularity is reflected in digitally, with 264 million Google search results for "Matcha" in just 0.46 seconds, highlighting its global relevance.

Matcha Products Successfully Penetrated Multiple Trending Categories

From 7th century Japanese tea ceremonies to widespread global popularity. As always, it was consumer interest that inspired brands to take the leap and bring the novel ingredient to the masses. In the 21st century, consumers were more and more interested in health and wellness and brands like Starbucks cashed out on it.

 

   

Expand your Portfolio with the Right Matcha Application

Our lab is currently busy with several matcha food and beverage projects. From matcha cookies, dairy and plant-based matcha lattes, functional water-based drinks with a long lasting energy or even seaweed-based matcha sauce. Below are our main picks of the categories that use matcha and show the highest growth.

Matcha chocolate

Globally valued at 1.3Bn with CAGR of 7.5%* with the main drivers such as health consciousness, premiumisation of confectionary products, cultural fusion, increasing innovation in the category. The largest market share comes understandably from the Asia-Pacific region, but shows an immense potential for European implementation.

Source: Data Horizon Research, Matcha Chocolate Report, 2022

Matcha-Based Fitness Supplements

Compared to a cup of green tea, matcha provides 10X the amount of healthy compounds. From pre-workout powders to post-workout recovery shakes. Matcha's unique combination of caffeine and L-theanine makes it a popular choice for any fitness enthusiasts.

Matcha Protein Bars

In 2024, the global protein bar market was valued at approximately USD 5.18 billion and is projected to reach USD 9.55 billion by 2034, expanding at a Compound Annual Growth Rate (CAGR) of 6.3%*.

Source: Protein Bar Outlook, Mordor Intelligence, 2024

Thanks to its umami flavour, matcha easily complements five basic tastes: sweet, salty, bitter, sour and umami. It can enhance flavours in both sweet and savoury dishes. Here are other applications that we worked with or came across.

Innovative product categories that include matcha high demand:

• Matcha Oat Lattes
• Matcha Energy Shots
• Matcha Kombucha
• Matcha Protein Bars
• Matcha Collagen Drinks
• Matcha Ice Cream Sandwiches
• Matcha Pancake Mix
• Matcha Sparkling Water
• Matcha Coconut Yogurt
• Matcha Croissants

Sustained existing demand:

• Ceremonial Matcha Drinks
• Matcha Cheesecake
• Matcha Mochi Ice Cream
• Matcha Cookies and Granola
• Matcha Milkshakes & Matcha Soft Serve

Emerging innovations that include matcha:

• Matcha BBQ Sauce
• Matcha Tofu
• Matcha Beer
• Matcha Pasta or Noodles
• Matcha Nut Butters
• Matcha Salad Dressings
• Matcha Edible Straw

4 Trends That We Observed

1. Matcha drinks enhanced with protein, collagen, or adaptogens are growing rapidly
2. Matcha products emphasizing health benefits like antioxidants are dominating
3. Bakeries and artisan makers are infusing matcha into traditional foods
4. Items like matcha straws or plant-based options resonate with eco-conscious consumers.

Ins and Outs of Launching a Matcha Product

Does The Development of Matcha Products Take Longer?

No. The development timeline for matcha-based products resembles one of non-matcha products within the same category. Similarly, time to set up production for matcha products doesn’t differ from non-matcha products. However, there are two specific considerations when brands likely face a challenge:

• Dairy and plant-based beverages often have difficulties to secure low MOQ (Minimum Order Quantity) for initial production runs.
• Shelf life considerations also play a critical role. For longer shelf life a manufacturer with high-treatment processing capabilities is needed. Many facilities, however, require a MOQ of 200 000 cans for UHT (Ultra-High Temperature) treatment, making small-scale launches more difficult. as finding a manufacturer with high-treatment processing capabilities can be challenging.

At Agilery, we are actively in contact with manufacturing partners that have experience in handling matcha in both foods and beverages. Check out our mapping service for more information on how we can support your production.

Is Matcha an Ingredient Challenging to Source?

Matcha could be an challenging ingredient to source, if you need consistent performance on a large scale. Matcha quality, color and flavour nuances differ based on supplier and the region and even the harvest cycle. This could make sourcing more difficult compared to other ingredients.

There are currently no effective matcha flavoring alternatives that can perfectly replicate matcha's complex and delicate flavor profile—earthy, slightly sweet, and bitter. We are expecting this to change in the foreseeable future, because a flavoring would allow for more flexibility in food processing.

When choosing the right matcha for your product, here are a few considerations:

• Matcha’s price varies significantly depending on quality grade. Ceremonial and organic grades are expensive and may not always be necessary for functional applications.
• The chemical composition of matcha grades influences taste, solubility, and nutritional benefits, which must be considered in formulation.
• The balance between functional applications and ceremonial authenticity must be carefully managed to align with both consumer expectations and production feasibility.

Is Matcha Processing More Complex Than Other Ingredients?

Each ingredient has its own hurdles, and matcha is no exception. Powdery ingredients, including matcha, pose particular challenges in industrial settings. Pumps and machinery are sensitive to fine powders, making its handling more complex. However, as demand for matcha continues to grow, more manufacturers are investing in the right equipment and expertise to manage these processes efficiently.

Longer processing times can also lead to sedimentation, which affects the final product’s consistency. This is a significant challenge for beverages and other liquid-based formulations, where stability is crucial for consumer acceptance.

Additionally, heat treatment such as UHT negatively impacts matcha’s delicate flavor profile. Lower heat pasteurization (~75°C) is a more suitable alternative, helping to preserve the taste and nutritional benefits while still ensuring product safety.

The processing method significantly affects matcha’s appearance and functionality:

• High acidity and heat treatments accelerate color degradation, leading to an undesirable brownish tint
• Sedimentation is a recurring issue in liquid formulations, requiring additional stabilizers or frequent shaking instructions
• Carbonated matcha beverages present a unique challenge, as shaking to redistribute sediment conflicts with consumer habits

More extensive processing leads to greater quality loss. Sometimes a lower-grade matcha may be a better alternative in heavily processed products, when it comes to costs.

What are The Regulatory Challenges for Matcha Products in Europe?

One of the biggest challenges is the lack of universal grading standards, as matcha quality can vary greatly between suppliers, mainly from Japan and China. This inconsistency makes it difficult for brands to ensure a reliable product that meets consumer expectations.

Additionally, when you launch an organically certified matcha product, your matcha ingredient must meet strict EU food organic safety standards such as pesticide residue limits, and heavy metal content regulations, all of which differ between countries.

Importing matcha also involves food safety and traceability requirements, which ensure that the product is safe for consumers and meets strict labeling laws.

Brands must clearly declare the country of origin and any functional claims made about matcha, such as its antioxidant benefits, must be supported by scientific evidence. Failure to comply with these regulations can lead to delays, fines, or even product recalls. It's thererofe crucial to work with trusted suppliers and regulatory experts.

What do Consumers Expect from Matcha Products?

Matcha has long been associated with high-quality, fresh preparation, particularly in Japanese tea ceremonies and homemade drinks. Many consumers expect industrially produced matcha products, such as ready-to-drink beverages, snacks, and desserts, to have the same vibrant green color, rich umami flavor, and smooth texture as freshly whisked matcha. However, due to large-scale food processing methods, these expectations are often difficult to meet.

Heat treatments, long shelf-life requirements, and ingredient interactions can cause changes in flavor, texture, and color, leading to a product that differs from traditional matcha.

In addition to flavor and appearance, consumers also have specific texture expectations. Freshly whisked matcha is smooth and frothy, but industrial matcha sets in the bottom of the packaging due to sedimentation and could taste gritty in certain formulations. Therefore some matcha-based drinks require shaking before consumption. This issue is even more problematic for carbonated matcha beverages, as shaking is not an option. 🙂

 

Matcha is still a new ingredient and there is a need to educate consumers on the natural variations to manage their expectations. Clear labeling, thoughtful packaging can help bridge the gap between industrial production and traditional matcha experiences, so that consumers enjoy both convenience and authenticity.

Why is Matcha Expensive?

Matcha's high cost as an ingredient in commercial food products is due to several factors:

Labor-Intensive Cultivation

Prior to harvest, tea plants are shaded to increase chlorophyll content, enhancing the vibrant green color and flavor of matcha. Only the youngest, most tender leaves are hand-picked to ensure quality.

Specialized Processing

After harvesting, leaves are steamed to prevent oxidation and then dried. The dried leaves are ground into a fine powder using traditional stone mills, a time-consuming process that produces a smooth texture and rich flavor.

Quality Grades

The highest quality matcha is made from the first harvest. It’s more expensive due to its superior taste and color. Sourced from subsequent harvests, it's more affordable but still costly compared to other ingredients.

ice">Limited Supply

High-quality matcha is primarily produced in specific regions of Japan, such as Uji and Nishio. The global demand for matcha has gone up in the recent 5 years. This increased demand, coupled with limited supply, rises prices. Japan is now investing into increasing their matcha production to satisfy the market needs.

Import Costs and Supply Chain Factors

Importing matcha involves shipping, customs duties, and taxes, which increase the overall cost. Adding to that its proper storage to maintain freshness. Our team at Agilery can help you with the initial supply where you slip thinking about customs and duties.