Matcha, which comes from specially grown and processed green tea, is growing in popularity. It’s known for its vibrant green hue and superfood health halo; as well as its distinctive taste.

It’s still a relatively niche market. The global matcha market size is around $4.3bn: a drop in the ocean compared to the mega $269bn coffee market.

Both categories are going strong: matcha has a particularly impressive CAGR of 7.9% for 2024-2030. That is, however, against a growing CAGR of 5.3% for coffee for 2025-2030.

So can matcha move in on coffee and steal market share?

Coffee shop winner

With margins tight and the category under pressure, coffee shops know they need to expand and offer more consumers more drinks for more occasions.

And Emilie Holmes, as founder of Good & Proper, sees matcha as a winning drink when it comes to diversification.

Over the last decade, the company has seen matcha shift from niche to necessity for those in the on-trade.

“The growth of Matcha can only be a good thing for a hospitality industry still struggling to bounce back after Covid,” she said. “Matcha is a reason for non-coffee drinkers to visit a cafe for an out of home experience that they might not be able to replicate at home”.

And she points out that matcha is a premium product that consumers are willing to pay for, offering a good margin for operators.

“And it’s actually much more versatile than coffee and pairs well in a number of different formats where coffee doesn’t.

“It pairs well with fruit and chocolate and has a completely different flavour profile to coffee whilst still containing caffeine.”

Matcha is also seen as a much ‘healthier’ source of caffeine. Comparing the levels of caffeine in coffee and matcha can be tricky (depending always on the type and brewing process) although matcha can generally expected to have less caffeine than coffee.

But more important is the presence of L-theanine in matcha: the amino acid well-known for its calming properties.

“The production of L-Theanine during the growing process results in a much smoother caffeine release and gives consumers more of a calm focus than you see with the caffeine spike and crash with coffee,” she said.

Standout ingredient

US ‘drink tank’ ingredient specialist Imbibe knows that consumers are increasingly drawn to functional beverages that provide health benefits, and matcha is already a ‘standout ingredient’ in the space.

That’s thanks to the support of influencers: who are particularly influential in the coffee shop sphere as well as the wider beverage industry. In the same way influencers have driven coffee shop trends, they can turn this power to matcha. And the vibrant green color lends itself perfectly to visually important posts.

“Much of matcha’s rising popularity can be attributed to social media influencers, especially on TikTok, who highlight both its health benefits and its visually appealing presentation,” said Matthew Bae of Imbibe. “Reflecting this momentum, global Google searches for matcha now exceed 2.7 million per month, marking a 70% increase over the past year.”

Matcha isn’t just about providing an alternative to coffee: it’s about embracing the space and elevating it. That could either be as a drink in a cafe; or as a matcha flavoring in RTD drinks in retail.

“I see matcha as more of a complement to coffee than a competitor,” said Bae.

“In fact, the growing popularity of the “dirty matcha” – a drink that blends matcha with espresso – highlights this synergy, with global searches for the beverage up 75% in the past year. Consumers are clearly interested in combining the benefits of both.

“Matcha appeals to those seeking a unique flavor profile, a slightly lower caffeine content, a boost in antioxidants, or even a visually striking drink to share on social media.”