Once reserved for Japanese tea ceremonies, matcha has rapidly transformed into a global phenomenon. It’s now found iced, foamed, carbonated, flavoured, and hashtagged across café menus and social media platforms worldwide.

Yet, as the trend scales, a question arises: are we still drinking matcha – or just a highly stylised version of it?

The journey from cultural ritual to commercial success highlights whether the world’s newfound love for matcha means it’s drifting too far from its roots – or simply evolving, as most traditions eventually do.

I spoke to Gerardo Callipo at Kerry Group and Andrew Richardson at Whitebeans Global to learn more. 

You may also like our article on whether matcha has become the new espresso.

Matcha’s meteoric rise meets supply limits

Over the past few years, matcha has experienced a surge in popularity worldwide. For centuries, it was a traditional Japanese ritual, but wellness trends, its vibrant green hue, and reputation as a “healthier” alternative to coffee have driven global consumption to new heights.

In some key markets, coffee brands report that iced matcha beverages are outperforming their espresso drinks, particularly among Gen Z consumers seeking caffeine with perceived wellness benefits. 

In response, many café chains now release seasonal matcha “drops” – from floral-infused lemonades to pastel-hued iced lattes – designed to tap into the hype of limited-time offerings. 

Black Sheep Coffee, a champion for robusta in specialty coffee, reported a 227% year-on-year surge in iced beverage sales in May 2025 following the launch of its Peaches & Cream Matcha and Matcha Lemonade lines. This signals a clear consumer pivot towards photogenic, non-coffee drinks.

Blank Street, another major chain, is also capitalising on this. The company recently refreshed its branding, dropping “Coffee” in its name, dialling back its iconic green colour to a matcha-latte hue, and focusing more on the diversity of its non-coffee offerings.

Social media feeds are also awash with viral matcha videos; its eye-catching aesthetic amasses billions of views on TikTok and Instagram. Influencers also tout its health benefits, largely due to its L-theanine content – an amino acid that has a calming effect on the body.

Today, it has become something of a fashion or lifestyle accessory. However, its surge in demand has come with a cost.

In Japan – where high-quality matcha is shade-grown, hand-picked, steamed, and stone-ground from tencha leaves – supply is under intense pressure. Only a small portion of Japan’s tea harvest is dedicated to matcha production, and many regions are now limiting exports to protect domestic quality and avoid over-commercialisation.

Meanwhile, the number of Japanese tea farmers continues to decline, threatening long-term sustainability. As demand outpaces supply, lower-grade or counterfeit matcha powders are increasingly making their way into global markets, raising concerns about authenticity and transparency.

As Japan struggles to meet the growing global demand, buyers may look elsewhere for more stable supplies. China is currently the world’s biggest producer of matcha, but farmers often lack the expertise and infrastructure to match the quality of matcha grown and processed in Japan.

Confusion around grades, quality, and health benefits

One of the key disconnects in matcha’s global rise is the lack of clarity around quality. Many use terms like “ceremonial grade” and “culinary grade” inconsistently – and sometimes misleadingly. 

Although both terms have become synonymous with brands proliferating in Western countries, Japan doesn’t recognise these quality standards. Instead, matcha is graded by the time of year it’s harvested, as well as its colour, smell, cultivar or blend, and flavour.

Western marketing asserts that consumers should drink ceremonial-grade matcha – made from young, first-harvest leaves – “pure” without milk or flavourings. Culinary-grade matcha, typically more bitter and made from older leaves, is more suitable for blending and cooking.

However, many products labelled as “ceremonial” are far from Japan’s quality standards. Without strict regulatory definitions, consumers have to navigate a vague and crowded landscape.

“It’s not just about going green, it’s about going true,” says Gerardo, the Innovation Director at Kerry, a global provider of taste and nutrition solutions for the food, beverage, and pharmaceutical industries. “Flavour authenticity and provenance storytelling have become the real value-adds for savvy consumers.”

At the heart of this conversation is the tension between cultural authenticity and global scalability.

Matcha originates from centuries-old Japanese tea rituals, closely tied to Zen Buddhism (originating in China) and the practice of mindfulness. These traditions emphasise not just the drink, but also its preparation and consumption – a moment of presence, simplicity, and quiet.

Yet, booming global demand inevitably means that matcha is shifting further away from this. Often described as “not a trend, but a movement”, much of its modern global appeal centres around “tapping into your wellness era” – a popular phrase among younger consumers who are prioritising their physical, mental, and emotional health.

Containing both caffeine and L-theanine, matcha provides sustained energy without the sudden spike and subsequent slump, positioning it as a viable “healthier” alternative to coffee. But when consumed with sweeteners, flavourings, and other add-ons – as matcha often is – these health benefits can quickly disappear.

Some argue that matcha’s transformation is an inevitable, and even necessary, adaptation to rising global demand.

“Most of the drifts from tradition are actually positive moves if they help matcha expand in new markets,” says Andrew, the CEO of UK private label supplier Whitebeans Global. “Western tastes are different to Japan, but eventually, consumers evolve toward authenticity, as they did with espresso.”

This pattern mirrors the evolution of coffee culture: from sugary lattes and flavoured beans to a growing appreciation for single origin coffees, pour overs, and direct trade.

“As long as we respect the core character of matcha, our clients are very open to creative formats that help it stay relevant and exciting,” Gerardo says. “Whether it’s paired with yuzu in sparkling tea or transformed into frozen desserts, the key is to honour matcha’s identity while embracing new tastes.”

The problem isn’t that matcha is evolving, but how rapidly it’s changing. Much of the innovation seen in today’s cafés is creative, engaging, and overall beneficial to tencha producers. Seasonal drops, sparkling versions, and even RTD formats have helped propel matcha into mainstream culture – and operators need equipment that supports them in meeting the growing demand.

However, without clear education or sourcing standards, innovation can easily slip into commodification. Consumer misconceptions are often driven by opportunistic marketing: over-promising on health benefits, hiding ingredient quality, and leaning into trendiness without substance.

“We’ve seen this before in coffee. It took years, but eventually, people learned to appreciate the real thing,” Andrew says. “With matcha, we already have that roadmap – now we need the consistency to follow it.”

A more conscious path forward for matcha

Matcha’s global rise isn’t inherently problematic. In fact, it holds tremendous potential for cultural exchange and agricultural revitalisation.

However, as matcha continues to expand into various products, from sparkling teas to beauty items, those shaping the trend – from café owners to product developers – must lead with clarity, curiosity, and care.

Cafés should be transparent about how their matcha is grown, sourced, and prepared, with quality as a top priority. Brands should also avoid misleading grade labels and health claims that reduce centuries of craftsmanship into marketing shorthand.

Consumers should be invited to explore matcha in all its forms – pure, whisked, seasonal, and blended – while understanding what distinguishes different quality grades. Producers are a key part of this narrative, and should be at the centre of it.

Much like coffee’s long journey from a ceremonial drink to instant granules to single origin pour overs, matcha is navigating its own cycle – from commodification back toward deeper understanding. Already, a new wave of consumers is seeking out traceability, authenticity, and the real story behind the product.

“Even when matcha becomes a ‘lifestyle flavour’, its Japanese roots remain visible, just with a ‘global accent’,” Gerardo says. 

While the first wave of matcha hype often diluted authenticity with overly sweet or floral profiles, today’s consumers are leaning back toward tradition. 

“We’re seeing a ‘Matcha Renaissance 2.0’,” Gerardo says. “Clients are asking for formulations that retain the true taste of Japanese matcha: grassy, umami-forward, and a slight, pleasant bitterness.

“With factory-grade precision, through techniques like nitrogen flushing and flavour encapsulation, we can preserve matcha’s integrity in large-scale formats like RTDs,” he adds. “It’s possible to maintain matcha’s signature character while meeting industrial demands – offering a bridge between tradition and taste evolution.”

Like coffee, matcha is more than just a drink; it’s a symbol of ritual, wellness, and ancient traditions. The recent global craze is less about matcha itself and more about strategic marketing.

But if we lose ourselves entirely to the hype, we risk forgetting matcha’s deep cultural roots. However, with thoughtful stewardship, shared intent, and a commitment to both innovation and integrity, matcha’s modern identity can still honour its tradition.

Enjoyed this? Then read our article on whether matcha can grow outside of Japan to address supply shortages.

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“Would you like that hot or iced?”: a now standard question in many cafés around the world.

There’s a cold revolution in the coffee industry – and it’s more than just a seasonal trend. Iced and cold coffee beverages are rapidly becoming a key part of modern café culture.

They now account for more than 75% of Starbucks’ US sales – up from just 37% in 2013. And this isn’t limited to chains; specialty coffee shops are seeing a similar shift. Many roasters, like Blue Bottle and Stumptown, serve cold drinks every day, all year round.

This transformation has rewritten the rules of coffee service, forcing baristas to reconsider their workflow and sparking a new wave of innovation behind the bar.

Keelan Hartnett of Flo-Smart and Josh Tarlo of Origin Coffee explain how.

You may also like our article on whether customised drinks push us away from specialty coffee.

From seasonal to signature: The rise of cold coffee

Only ten years ago, consumers looking for cold drinks had the choice of iced americanos and lattes or cold brew. But this limited selection is no longer sufficient, as the demand for cold coffee has since exploded.

For instance, the National Coffee Association’s fall 2023 National Coffee Data Trends report found that consumption of cold brew in the US alone has increased by a staggering 300% over the past seven years. Traditionally ordered during warmer months, consumers are now drinking iced and cold drinks all year-round, and they want more choice.

Today, cold coffee encompasses nitro coffee, cold foam-topped drinks, flavoured matcha, and viral lattes with layered textures and visual elements. And there’s one factor driving this explosion in variety: Gen Z’s love for customisation.

Recent research by UK roaster Lincoln & York reveals that nearly 40% of consumers aged 18 to 34 are drinking more coffee outside their homes than ever before, and they are demanding more from their beverages.

Up to 75% of these young coffee drinkers are opting to customise their drinks with add-ons like plant milks, flavoured syrups, cold foam, and functional ingredients. These include adaptogenic mushroom powder, MCT oil, and L-theanine, which are said to boost productivity and mental clarity.

As “little treat” culture – the growing trend of indulging in small, affordable luxuries, often as a way to cope with stress during difficult economic times – proliferates, customised coffee is booming. In many cases, cold coffee is the ideal canvas for this creativity and self-expression, catering to the growing demand for indulgence and aesthetic appeal.

“People want drinks that actually taste and look different,” says Josh, the director of growth at Origin Coffee, a specialty coffee roaster in the UK. 

In turn, specialty coffee shops have an opportunity to drive revenue.

“One of our most recent hits – the Cold Brew Cherry Tonka Cold Foam – helped increase cold drink sales by 70% year-over-year,” Josh adds.

How cold coffee has transformed barista workflow

Although profitable, offering a variety of iced coffee drinks comes at a cost: more ingredients, more steps, and more pressure on baristas.

Preparing cold beverages is often more time-consuming than hot coffee, pulling baristas away from the espresso machine toward a patchwork of fridges, syrup pumps, ice bins, and blenders.

“Iced or customised drinks typically require a lot of manual steps, which can lead to slower service,” says Keelan, the managing director of Flo-Smart, a company specialising in smart beverage dispensing.

The traditional bar setup – built around the espresso machine – is often ill-equipped for the ever-widening range of today’s cold drinks. As cafés have added more iced, customised offerings to their menus, the necessary equipment was often added on an ad hoc basis, rather than being fully integrated.

The result? What Keelan refers to as a “disjointed workflow”.

A “cracked” latte, for example, a viral iced latte served in a cup coated with hardened chocolate, which cracks when the cup is squeezed, might require seven or more steps across distant bar stations. 

“You’re asking a barista to move five different times for one drink,” Keelan says – an often impossible task for even the most seasoned staff, especially during a busy rush.

“Start by mapping out your current cold drink workflow,” he adds. “Then redesign the bar to reduce unnecessary movement; create zones where everything, from oat milk to syrup, is easily within reach.”

Josh explains that Origin has applied this approach across its wholesale partners, helping them streamline service. 

“We provide resources like concentrates and ready-to-drink formats so they can serve cold coffee properly,” he tells me. “You can make an iced latte in a third of the time.”

Customised cold drinks tend to have higher profit margins – and customers are willing to pay more for them. But they also increase the risk of bottlenecks, waste, and inconsistent quality.

To manage the complexity of modern cold drinks, more cafés are adopting automation to assist baristas in readjusting their workflow. These systems include automated milk foamers, milk and beverage dispensers, water fonts, and cold brew makers.

“You can go from 300 to 750 drinks a day and still maintain your margin,” Keelan says. “Automating complex cold drink menus allows baristas to delegate repetitive tasks. These include dosing milk, cold brew, or espresso concentrate with precision and speed. 

“You could serve up to ten iced coffees in a minute without moving.”

From optional to essential: What’s next for iced coffee?

Josh sees the influence of cold, customised coffee growing. 

“Cold coffee opens up new flavour profiles and creative space,” he says.

The iced drink trend isn’t just limited to Western countries. In East Asia, cold drinks have long been a creative playground. From cheese tea to sparkling cold brews, cafés in Korea, Japan, and China are inspiring drink innovation globally.

As customer preferences shift further toward cold beverages, cafés can’t afford to treat them as an afterthought. The tools to manage them – from bar layout to automation – are becoming increasingly essential.

“Cold drinks have better margins, they’re faster, and customers will pay more for something different,” Josh concludes. “Adapting to them is about making baristas faster and more consistent.”

Cold, customised coffee beverages are here to stay – not just as a seasonal spike, but as core drivers of café profitability. To thrive, coffee shops must adapt their service routines, invest in supportive equipment, and empower baristas to do their best work.

By streamlining repetitive tasks and enabling creative freedom, cafés can serve drinks that are as exciting as they are efficient. The future of coffee isn’t just hot; it’s cold, customisable, and built around smart design.

Enjoyed this? Then read our article on whether coffee shops are overthinking the basics.

Photo credits: Flo-Smart

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For many, this is a welcome and long overdue change. Coffee has historically been, and in many cases still is, undervalued. Many producers, particularly smallholders, receive consistently low prices that don’t cover the costs of production, preventing them from earning a sustainable, livable income.

As the C price has risen, a narrative has emerged that higher market prices result in more money in producers’ pockets, but the reality is far more complex.

I spoke with Vanusia Nogueira at the International Coffee Organisation, Paul Stewart at TechnoServe, and Steven Thomas at Traffic USA to learn more.

You may also like our article on why record prices don’t necessarily make producers “price makers”.

A new era for the coffee industry

Last year was historic for the coffee industry. Following reports of dwindling supplies in Brazil and Vietnam, the world’s two biggest producers, as well as uncertainty about the EU’s deforestation regulations, arabica prices surged to their highest levels since the 1970s, marking a 70% increase.

The last record high for arabica futures was US $3.39/lb, following the severe 1977 frost in Brazil. This record, adjusted for inflation in 2025, is around US $17/lb. Although the C price is currently far from this adjusted number, it underscores the significance of its sharp upward trajectory over the last two years.

All the signs point to a new era for coffee: one where high, volatile prices are a lasting reality. Roasters and importers now operate on thinner margins than ever, forcing them to raise retail prices, which inevitably reshapes consumer behaviour. Many foresee a surge in at-home consumption as people shift towards more cost-effective ways to drink coffee.

On the other side of the supply chain, sustained high coffee prices appear lucrative, but the reality tells a different story. Many producers and exporters are moving cautiously. Current market volatility means that, should they commit to future sales at fixed prices, they expose themselves to financial or sourcing risks down the line.

Why coffee prices will stay high in 2025

According to a recent UN FAO report, coffee prices are unlikely to decline significantly this year.

Coffee is a sensitive crop that requires specific temperatures, rainfall, and soil conditions to produce good yields and quality. Coupled with rising global demand, the worsening climate crisis has caused production and stockpiles to dwindle rapidly.

Brazil recorded its hottest year ever in 2024, which included severe droughts and wildfires that slashed yields. The country’s National Supply Company (CONAB) adjusted its 2024/25 harvest estimate downward by 6.8%, and an intense cold front in August further damaged arabica-producing areas. These supply constraints have fuelled a bullish market.

Beyond production woes, logistical bottlenecks and geopolitical disruptions have exacerbated cost pressures. Supply chain instability, freight price spikes, and ongoing post-pandemic distribution challenges have made it increasingly expensive to move coffee to market. 

Additionally, heightened global trade tensions – particularly tariff escalations from the Trump administration – have introduced further unpredictability, impacting exporters and importers alike.

The increased costs aren’t limited to logistics alone. Coffee processors and exporters are also facing price hikes in essential production inputs, including fertilisers, pesticides, and packaging materials. The ripple effect of these expenses ultimately influences retail coffee prices, making it harder for smallholder producers to compete with large-scale operations that benefit from economies of scale.

“The transmission of higher coffee prices to producers varies depending on the region and coffee variety. According to data, for example, we can observe a trend of price transmission to producers in Brazil and India,” says Vanusia Nogueira, the executive director of the International Coffee Organisation. “The challenges that remain are the increase in production costs (such as fertilisers, labour, transport), intermediaries, climate, and productivity risks that may limit the benefit of higher prices.”

The illusion of higher prices benefiting coffee producers

Although the rise in coffee futures suggests higher profits for producers, farmgate prices – the actual amount producers receive for their coffee – often tell a different story. The traditional coffee supply chain is complex, involving multiple intermediaries that capture a significant share of the value. Many producers remain financially strained despite record-breaking C prices.

“High tariffs, market concentration, and long supply chains can limit producers’ share of the prices paid, while transparent pricing, direct trade, and strong farmer organisations help ensure fairer distribution,” Vanusia says. “Exchange rate fluctuations and speculation also impact farmgate prices.”

One critical issue affecting farmgate prices is the lack of transparency in pricing mechanisms. Price increases are rarely reflected in producers’ payments, particularly in regions where cooperatives or local buyers dictate pricing. 

Moreover, price distribution can vary significantly across different markets. 

“Farmers in Guatemala, Honduras, and El Salvador, for instance, have seen farmgate prices rise roughly in line with ICE futures – between 70% and 85% – over the last year,” says Paul Stewart, the Global Coffee Director at TechnoServe, a non-profit that develops business solutions to help alleviate poverty. 

“However, in Ethiopia, farmgate prices have actually declined year-over-year, despite record-breaking global prices,” he adds. “Production costs have also risen significantly, particularly in Central America, where harvesting and processing costs have increased by up to 40%.”

Pre-financing also poses issues for producers. Similar to the position that many importers and roasters are finding themselves in, exporters are increasingly unable to access the funds they need to purchase large volumes of coffee at the new, higher prices.

“In countries like Nicaragua, farmers have only seen farmgate prices rise by 39% year-over-year due to a lack of liquidity in the market. Buyers there simply don’t have the capital to offer competitive prices,” Paul continues. “In contrast, in Honduras, grouping smallholder farmers together allowed them to sign direct sales agreements with exporters, leading to better prices and access to fairer financing.”

Why direct trade isn’t a straightforward solution

A cornerstone of specialty coffee since its inception, direct trade is often touted as the solution to paying producers higher prices for coffee. 

Unlike conventional sourcing models that involve numerous middlemen, direct trade, in theory, facilitates stronger financial transparency between roasters and producers, ensuring a larger share of revenue reaches the latter.

In practice, however, direct trade can quickly become a vague premise with no universally agreed-upon definition, reduced to a marketing buzzword with little intention behind it.

When done right, direct trade should be a strategic business approach for roasters to engage more closely with their suppliers, helping to manage cash flow and ensuring producers are paid a premium for quality coffee. 

That being said, there are still logistical hurdles to direct trade that don’t necessarily equate to more money shared across the supply chain.

“What surprises people who endeavour to trade directly is that it isn’t always cheaper and it’s almost always harder than buying single origin coffee that’s been greenwashed and stamped ‘A-OK’ by someone other than the producer,” says Steven Thomas, business owner at Traffic USA and Lucatelli Coffee, two companies which oversee logistics and supply for US roasters with monthly production capacities ranging from 120kg to 120,000kg. 

Direct trade often involves more effort and a higher price point compared to traditional models, which can deter potential buyers.

How market volatility undermines producer gains

Another overlooked reality is the market volatility that accompanies price hikes. Although there’s evidence to suggest producer income has improved over the past two to three years, market instability has made it difficult for farmers to fully benefit. 

“The income of producers has improved over the past 24 to 36 months, but that hardly makes up for the decades prior when they were being grossly underpaid,” Steven says. “What mitigates the benefits of increasing prices is the concurrent increase in market volatility. Producers want stability because it’s the thing they have the least, and it’s the thing they need the most.

“Market volatility, compounded by climate and geopolitical instability, makes rising prices less beneficial for growers.”

Volatility also affects long-term investment in sustainable farming practices. Many smallholder farmers struggle to plan for the future due to price fluctuations, which makes it difficult for them to invest in quality improvements, soil health, and climate resilience initiatives. 

Despite record-high prices, the financial benefits remain concentrated primarily at the roaster and retail levels. Traders, exporters, and coffee shops continue to capture the majority of profits, despite their margins decreasing in recent years.

Paul emphasises that improving transparency and efficiency in supply chains could increase the share of the price that farmers receive. 

“In well-developed coffee sectors like Brazil or Vietnam, farmers receive 90-95% of the export price. Elsewhere, that figure can be as low as 60%,” he says. “Making supply chains more transparent and efficient is key to ensuring fairer distribution.”

Elevated C prices alone can’t solve systemic issues in coffee production. Addressing these challenges requires a multi-pronged approach, including more equitable trade models, improved infrastructure, and financial stability mechanisms for farmers. 

Paul highlights the importance of policy interventions, citing Honduras’ VAT exemptions on agricultural inputs and Peru’s concessional loan programme as examples of initiatives that help smallholders invest in farm productivity.

“Clear national coffee plans that include, for example, living income and prosperity roadmaps, in addition to firm commitments from the government and private sector, help stakeholders work together towards a similar objective and secure the necessary funds to implement the right initiatives to help farming communities in their journey towards prosperity,” Vanusia says. “The specific policies will vary from country to country, but by building national coffee plans that have the public and private sector support, the chances of success increase.  

“Supporting these initiatives at the international level will help countries to design and implement programmes that will work for them, according to the reality of those respective countries,” she adds. “Our Task Force is an effective space for dialogue for both public and private sectors globally, while bringing that dialogue to action to the local level in coffee-producing countries.”

The narrative that higher prices mean higher profits for coffee producers is not universally true, and is far more complex than it appears. 

Without structural changes, even record-breaking prices will leave the majority of farmers, especially smallholders, struggling to sustain their livelihoods.

Enjoyed this? Then read our article on why producers are choosing to diversify their crops.

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