With its vibrant green colour and accompanying ’hot-girl’ aesthetic, matcha tea was arguably *the* drink of Charli XCX’s ’brat summer’.
Made from ground green tea leaves and thought to date back as far as 7th century China, matcha has undergone something of a makeover in recent years.
Once seen as a specialist health drink, it’s been growing in popularity across coffee shops and cafés in the UK. According to a report by Orion Market Research, sales grew by over 200% in 2023.
Instagram influencers and foodies have flocked to the drink, which is often served over ice and with oat milk and a dash of honey or sugar syrup – like a grown-up, Shrek-themed milkshake. Essex-born singer Charli XCX’s iconic pop album Brat and the accompanying clamour for all things green this year has only propelled matcha’s momentum further.
The drink is certainly inspiring plenty of innovation. Earlier this year, American rock band Green Day teamed up with London coffee brand Grind to launch a ready-to-drink Iced Matcha Latte.
Now – thanks to a canny piece of NPD from category leader PerfectTed – the green brew could be about to break into the mainstream.
The business, which claims to be the biggest matcha brand in Europe, has this week rolled out a three-strong range of Nespresso-compatible pods.
Available in OG Matcha, Salted Caramel and Vanilla Bean, the pods allow shoppers to “enjoy the vibrant energy and health benefits of matcha at the press of a button”, according to PerfectTed. It touts matcha as a “healthier caffeine source” that delivers a sustained energy boost for four to six hours, with L-theanine and antioxidant content.
“Our mission has always been to make matcha as accessible as possible,” said PerfectTed co-founder Marisa Poster. “By introducing matcha in new formats – whether it’s our flavoured powders or now our Nespresso compatible pods – we’re making it easier for everyone to enjoy the incredible benefits of matcha in a way that fits into their daily routine.”
Crucially, pods are the kind of fuss-free format that could make daily consumption more achievable. The biggest barrier to the category’s growth in retail is surely the fact many shoppers simply don’t have the knowledge or equipment to make the drink at home.
Typically matcha is sold in a powder format, which is mixed with water using a bamboo whisk until a frothy layer is formed. It’s not exactly rocket science, but for an unconfident consumer looking to make their first steps into matcha, it can seem daunting. PerfectTed clearly knew this, hence the decision to debut with a range of matcha energy drinks, before extending into powders earlier this year.
The Nespresso market
Pods, however, are about as straightforward – and mainstream – as it gets. According to research commissioned by The Grocer and carried out by Toluna/Harris Interactive, they are the second most popular format for consuming coffee in the UK after instant, used by 31% of shoppers.
Statista figures from December 2023 show 4.8 million UK households own a Nespresso coffee machine. This gives PerfectTed a huge platform from which to try and convert coffee drinkers to matcha.
The pods are also pretty competitive on price, too – selling for £5.99 for 10 via PerfectTed’s website, and retailing at £7.49 in Holland & Barrett. Compared to £25.65 for its Matcha Starter Kit (30g of powder, plus an electric matcha whisk and stainless steel scoop), the pods feel like a much easier sell to matcha-curious consumers, who may not want to commit that much investment upfront.
Will pods propel PerfectTed sales?
PerfectTed will be hoping the pods can help it supercharge sales and justify the backing of high profile investors including Dragons’ Den star Steven Bartlett.
The business hasn’t been shy about courting investment to fuel growth. It has raised £500k in equity at a valuation of £19.5m, according to documents filed at Companies House in May.
The brand hopes to reach £25m in sales by 2025, which would be a remarkable achievement for a business less than five years of age. Especially when selling a product that has – for all the noise – yet to translate to any real scale in grocery. PerfectTed’s energy drinks have grown at a rapid rate of 261.4% in the past year, but sales still only amount to £2m [IRI, 52 w/e 13 July 2024].
Still, one industry source tells The Grocer PerfectTed’s matcha powder sales – sold in Sainsbury’s, via DTC and in foodservice – are already much higher. The pods, which have landed in Sainsbury’s and on Ocado, and are set to roll out to Tesco next month, should be a welcome, and hopefully incremental, new revenue stream.
Whether the format can successfully bring matcha into the mainstream could well be a pivotal moment for investors.
