Mariyam Ismailova | 05.12.2025
Is Matcha the New Coffee?
Matcha has slowly made its way from niche cafes into the mainstream over the past few years, becoming the most popular beverage on social media and amongst consumers. It is now competing for a spot on menus that include coffee. But is matcha just a temporary trend, or is it actually emerging as a competitive alternative and overtaking coffee?
The global matcha market was estimated at $4.3 billion in 2023 and is expected to reach approximately $7.43 billion by 2030, growing at a strong compound annual growth rate (CAGR) of 7.9%. In contrast, the global coffee market is much bigger than the matcha market; it is about $269.3 billion in 2024, with an estimated growth of $369.5 billion by 2030, growing at a CAGR of 5.3%. Consequently, while the matcha market is small compared to the coffee market, its greater growth indicates a change in trends. Matcha is a fast-growing product that is gaining popularity swiftly, even while coffee still dominates the global beverage market.
The increase in matcha’s popularity is mainly caused by younger consumers, especially Gen Z. Cafes like “Black Sheep Coffee" and “Chamberlain Coffee” have reported large rises in matcha sales. “Black sheep coffee” observed a 227% increase in iced matcha, which even beats espresso consumption at some locations. This generation values health, aesthetics, and adaptability, using drinks as a form of self-expression shown on platforms like Instagram, TikTok, and Snapchat. The global matcha market is expected to grow rapidly in the next few years, showing that aesthetic, healthy beverages are taking over cafe menus and influencing consumer habits globally.
The economic state for matcha is unexpectedly strong. According to a recent matcha retail guide, ingredients for a matcha latte cost only about $1.35; therefore matcha latte can be sold for $5.50-$7, providing cafes a profit margin of up to 77%. Powdered matcha for sale also generates a large profit; for example, a small tin bought for $8-$15 can be sold as a premium product for $25-$40. Moreover, matcha has a “wellness glow” that makes it a competitive alternative for regular tea or coffee, because many consumers are prepared to spend more for health advantages, calming energy, and antioxidants. For cafes, adding matcha to menus increases choices for consumers, providing non-coffee drinkers a reason to visit the cafes.
However, matcha still has disadvantages when compared to coffee on a global scale. According to analysts, the worldwide matcha market is still about $4.3 billion, compared to coffee’s $269 billion market. Due to the large supply chains, global infrastructure, and consumer habits, supplies of coffee are still being made. And because coffee is addictive, as it contains caffeine, it's very hard to substitute coffee and find alternatives. Therefore, it is unlikely that matcha will substitute coffee in the near future, even if it presents niche opportunities, especially among trend-following consumers.
Matcha takes a long time to be produced. Its leaves are shade-grown for several weeks before harvest to improve chlorophyll and amino acids, which requires more care, time and work. 10 kg of fresh leaves are required to produce 1 kg of matcha powder. After steaming and drying, the leaf material, known as tencha, is crushed into a fine powder very slowly. For example, a grinder only grinds around 30 to 40g per hour to maintain the smell, colour and nutrients. Also, global demand increased. In 2024, exports from Japan reached 5,092 tonnes, a 18.7% increase compared to the previous year, but producers still warn of shortages and reduced yields. Labour, time, climate change, and the limited geographic areas in which matcha is grown make matcha supply relatively small and inelastic, meaning that its top position is secure rather than seeing market growth.
Matcha won't replace coffee anytime soon, but its quick growth indicates that it's not simply a passing trend. Consumers are looking for healthy ingredients, calm energy, and aesthetics—matcha ticks off all three requirements. Economically, it has a strong, stable, profitable position. The duration of this ‘trend’, pricing, and supply will determine whether it overtakes coffee and becomes a competitive alternative.
Sources:
https://perfectdailygrind.com/2025/07/is-matcha-the-new-espresso/
https://pmc.ncbi.nlm.nih.gov/articles/PMC9792400/
https://www.abc.net.au/news/2025-07-16/soaring-matcha-demand-triggers-global-shortages-record-prices/105519474
https://www.grandviewresearch.com/industry-analysis/coffee-market
https://www.grandviewresearch.com/industry-analysis/matcha-market
The global matcha market was estimated at $4.3 billion in 2023 and is expected to reach approximately $7.43 billion by 2030, growing at a strong compound annual growth rate (CAGR) of 7.9%. In contrast, the global coffee market is much bigger than the matcha market; it is about $269.3 billion in 2024, with an estimated growth of $369.5 billion by 2030, growing at a CAGR of 5.3%. Consequently, while the matcha market is small compared to the coffee market, its greater growth indicates a change in trends. Matcha is a fast-growing product that is gaining popularity swiftly, even while coffee still dominates the global beverage market.
The increase in matcha’s popularity is mainly caused by younger consumers, especially Gen Z. Cafes like “Black Sheep Coffee" and “Chamberlain Coffee” have reported large rises in matcha sales. “Black sheep coffee” observed a 227% increase in iced matcha, which even beats espresso consumption at some locations. This generation values health, aesthetics, and adaptability, using drinks as a form of self-expression shown on platforms like Instagram, TikTok, and Snapchat. The global matcha market is expected to grow rapidly in the next few years, showing that aesthetic, healthy beverages are taking over cafe menus and influencing consumer habits globally.
The economic state for matcha is unexpectedly strong. According to a recent matcha retail guide, ingredients for a matcha latte cost only about $1.35; therefore matcha latte can be sold for $5.50-$7, providing cafes a profit margin of up to 77%. Powdered matcha for sale also generates a large profit; for example, a small tin bought for $8-$15 can be sold as a premium product for $25-$40. Moreover, matcha has a “wellness glow” that makes it a competitive alternative for regular tea or coffee, because many consumers are prepared to spend more for health advantages, calming energy, and antioxidants. For cafes, adding matcha to menus increases choices for consumers, providing non-coffee drinkers a reason to visit the cafes.
However, matcha still has disadvantages when compared to coffee on a global scale. According to analysts, the worldwide matcha market is still about $4.3 billion, compared to coffee’s $269 billion market. Due to the large supply chains, global infrastructure, and consumer habits, supplies of coffee are still being made. And because coffee is addictive, as it contains caffeine, it's very hard to substitute coffee and find alternatives. Therefore, it is unlikely that matcha will substitute coffee in the near future, even if it presents niche opportunities, especially among trend-following consumers.
Matcha takes a long time to be produced. Its leaves are shade-grown for several weeks before harvest to improve chlorophyll and amino acids, which requires more care, time and work. 10 kg of fresh leaves are required to produce 1 kg of matcha powder. After steaming and drying, the leaf material, known as tencha, is crushed into a fine powder very slowly. For example, a grinder only grinds around 30 to 40g per hour to maintain the smell, colour and nutrients. Also, global demand increased. In 2024, exports from Japan reached 5,092 tonnes, a 18.7% increase compared to the previous year, but producers still warn of shortages and reduced yields. Labour, time, climate change, and the limited geographic areas in which matcha is grown make matcha supply relatively small and inelastic, meaning that its top position is secure rather than seeing market growth.
Matcha won't replace coffee anytime soon, but its quick growth indicates that it's not simply a passing trend. Consumers are looking for healthy ingredients, calm energy, and aesthetics—matcha ticks off all three requirements. Economically, it has a strong, stable, profitable position. The duration of this ‘trend’, pricing, and supply will determine whether it overtakes coffee and becomes a competitive alternative.
Sources:
https://perfectdailygrind.com/2025/07/is-matcha-the-new-espresso/
https://pmc.ncbi.nlm.nih.gov/articles/PMC9792400/
https://www.abc.net.au/news/2025-07-16/soaring-matcha-demand-triggers-global-shortages-record-prices/105519474
https://www.grandviewresearch.com/industry-analysis/coffee-market
https://www.grandviewresearch.com/industry-analysis/matcha-market
