- Black Sheep Coffee’s iced matcha line sparked a 227% sales surge, outpacing espresso at some locations
- Gen Z is driving demand for health-forward, photogenic drinks – and matcha is the poster child
- From Japanese ritual to café essential, matcha’s transformation is rewriting the coffee shop playbook
Black Sheep Coffee, known for championing specialty robusta in an industry that prizes arabica, recently reported a 227% year-on-year surge in iced beverage sales. The reason? matcha.
Following the launch of its Peaches & Cream Matcha and Matcha Lemonade lines, the chain saw its lemonade and matcha-based beverage sales shoot up 315%. This signals a decisive consumer pivot: Away from espresso and toward photogenic, non-coffee drinks.
Black Sheep isn’t alone. Matcha – a finely milled green tea powder traditionally consumed in Japanese tea ceremonies – has become a breakout hit in global coffee shops and supermarket aisles. So much so, that it’s become emblematic of a generation, and of matcha-obsessed consumers sometimes parodied on social media.
It is one of the top-selling products at Chamberlain Coffee, a brand created by YouTuber Emma Chamberlain, whose target demographic skews heavily toward Gen Z. Meanwhile, although Starbucks recently got rid of its Iced Matcha Lemonade, the green powder ingredient still has a place on its menu, with its newly launched Iced Lavender Cream Oatmilk Matcha.
“Since we began selling Chai and Matcha products 15 years ago, we’ve seen a steady rise in sales,” says Alex de Leeuw, Managing Partner at Foodservice Marketing Foods BV.
“Penetration has increased by roughly 8–9%, starting from zero. New generations – Gen Z, millennials, and even the upcoming Gen A – are shifting away from coffee and traditional tea toward latte-style drinks that are sweet, healthy, and highly customisable.
Lattes have become a form of self-expression. It’s like saying, ‘Look at me, I’m drinking a strawberry Matcha Latte!’ Social media has only accelerated this trend by amplifying influencers – and everyone else – who showcase these drinks.”
And while matcha is categorically not coffee, it has claimed a dominant space on coffee menus. According to the National Coffee Association’s Spring 2025 National Coffee Data Trends Report, Gen Z consumes more tea-based beverages than coffee – drinking significantly less coffee than Millennials, Gen X, or Boomers.
“There’s a real generational shift happening in how people energise,” says Nina Klotzel, Product Developer at PerfectTed. “Gen Z are ditching the crash-and-burn caffeine culture in favour of drinks that are better for their bodies and minds but still hit the need for an indulgent little treat. Matcha, like the Banoffee Iced Matcha Latte I recently developed, ticks every box: it’s functional, tasty, photogenic, and packed with long-lasting energy.”
“There’s also a growing appetite for ‘little luxuries’ – drinks that feel like a treat and that people are happy to spend a bit more on. And flavour plays a huge role here.”
In this context, Black Sheep’s iced matcha success is not a fluke, but a well-timed alignment with broader generational tastes. The chain’s marketing strategy has also leaned heavily into limited-time drops and seasonal flavour variations – drawing from playbooks more typical of fashion brands than foodservice providers.
In a sector where most chains are still reeling from post-COVID footfall losses and inflation-squeezed margins, Black Sheep’s bet on iced, health-tinged novelty is paying off.
Matcha’s commodification
The roots of matcha are ancient, but its current iteration in the global marketplace is arguably anything but.
Traditionally harvested and ground from shade-grown tea leaves in Japan, matcha has been consumed for centuries as part of Zen Buddhist ritual. Its preparation – measured, deliberate, mindful – is a world away from the Instagrammable frappés and lemonades now popping up across cities worldwide.
“At PerfectTed, culture is foundational,” says Nina. “We choose to highlight the real hands behind matcha: the Japanese farmers who have been pioneering the craft for generations. We focus on where matcha is grown, harvested, and stone-milled in Japan by the farmers we work with directly.”
“Our founders built these relationships in person, spending time in Japan to deeply understand the traditions and craftsmanship behind real matcha. My job is to make matcha accessible, and appealing to as many people as possible, so they can enjoy its benefits.”
This approach is not always adopted by brands though – how did matcha transition from sacred ceremony to summer accessory?
The answer lies partly in packaging and positioning. Over the past decade, brands have aggressively recast matcha not as a tea, but as a superfood lifestyle product. With 65% more antioxidants than green tea and 35% less caffeine than coffee, matcha has been marketed as a healthy choice.
“Matcha has become a global drink,” says Alex. “Most young consumers don’t even associate it with its authentic Japanese roots – awareness is low. It’s the same with Chai Lattes. People drink them for the energy boost, the indulgence, and the great taste. The Indian origin doesn’t carry much weight for them, and it’s no different with matcha.”
Its bright colour, slightly grassy flavour, and compatibility with alternative milks made it easy to adapt to iced formats and sweetened blends.
The global matcha market is projected to grow from $2.3bn this year to $2.9bn in 2028. While Asia-Pacific remains the cultural and production epicenter, North America is rapidly becoming the fastest-growing market, fueled by wellness trends and culinary experimentation.
Interest is driven largely by Gen Z consumers, who are likely to discover a product via social media, thanks to its aesthetic appeal and its many influencer endorsements.
Retailers have caught on. Whole Foods has a wide range of matcha-based ready-to-drink products, ranging from protein-enhanced lattes to sparkling teas. Perfect Ted and Oatly’s matcha drink collab is distributed at Sainsbury’s.
At the foodservice and café level, chains such as Pret a Manger, Joe & The Juice, Jenki Cafe and Blank Street – the latter even proclaimed 2024 to be “the year of the matcha” – have added iced matcha options to appeal to the growing segment of customers who want something healthy-looking, but not bitter.
Yet even as the product rides high, there is broadly little mention of its Japanese cultural origins. The rituals and values behind traditional matcha – mindfulness, respect, simplicity – have been replaced with customisation, frothing, and flavour drops. Is matcha’s popularity sustainable, or is it simply the latest in a long line of market fads?
Fad or staple?
For coffee brands, matcha is proving both a revenue boost and a litmus test. As Gen Z redefines what a coffee shop even is, cafés are morphing into lifestyle labs, selling everything from mushroom lattes to lavender-infused cold brews.
Matcha’s success reflects this new order – one where image, novelty, and wellness can matter more than beans, roast, or even coffee.
But this success comes with risks. Gen Z is famously fickle. Yesterday’s obsession can be tomorrow’s meme. Remember the wave of activated charcoal coffees or Bulletproof butter blends? Both surged and collapsed in popularity.
Nestlé, the world’s biggest food company, has flirted with matcha in its KitKat bars and instant mixes, but has not positioned it as a strategic core. Perhaps a sign of caution.
There’s also the issue of rootlessness. Matcha’s global rebrand is almost entirely disconnected from its cultural heritage. This lack of grounding can make it more vulnerable to shifting trends.
Oat milk, in contrast, gained longevity not just for its trendiness, but because it solved a persistent need – offering a sustainable, allergen-friendly dairy alternative. Can matcha claim the same staying power?
“Matcha isn’t a fleeting trend, it’s a 2,000-year-old tradition,” says Nina. “What we’re observing now is a transition from curiosity to commitment.”
“Consumers aren’t just sampling matcha, they’re making the switch. They’re experiencing the benefits: sustained energy, enhanced focus, and fewer crashes. It’s not solely about flavour, it’s about wellbeing. Once people feel that difference, they seldom revert.”
There are signs of durability. Brands like Chamberlain Coffee and Black Sheep are embedding matcha into their regular menu cycles – not as gimmick, but as repeatable, customisable fixtures. If consumer demand continues, and supply chains adapt, matcha may just cement itself as a permanent pillar in modern coffee shops, alongside flat whites and iced Americanos.
“Matcha is here to stay, I think,” says Alex. “It’s becoming a regular choice on drink menus and will only grow in popularity.”
“Some cafés are already selling more matcha than espressos! High-quality matcha – not the cheap, bitter kind – will secure a strong place on menus. As people become more educated about matcha—understanding the different grades (culinary, premium, ceremonial), grinding fineness, cultivars, and preparation styles (latte or straight) – the market will keep expanding.
On my last trip to Japan, we discovered all kinds of matcha products – beer, ice cream, KitKats, cakes, DIY whisking sets, lattes, both hot and iced. Our brand now offers over 20 matcha items, and we’re seeing real excitement from customers who want to learn more.”
Still, the next 18 months will be telling. Can brands strike the balance between innovation and fatigue? Can they build cultural depth into what has thus far been a surface-level success? In an industry chasing growth, matcha is the moment – but whether it becomes a movement remains to be seen.
Coffee Intelligence
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