2026 Predictions

Ryan · 0:06

Hello, and welcome to Specialty Matcha Podcast. My name is Ryan. This is Zongjun Li, who also goes by Sam. Hello. Hello. And we're the cofounders of Sanko. Yeah, we launched this podcast to discuss our learning journey in Matcha, share startup stories and interview experts. And today is January the 2026.

Zongjun · 0:25

Happy New Year. This is the first episode of this year and hope we are off to a good start. Indeed, and wish all the best to our listeners in the coming year. And it's also the first podcast episode we've done where we both are using our brand new mics from DJI. Hopefully, this audio quality issue will finally be put to bed.

Zongjun · 0:44

So we're making investments in the new year. That's right. That's right. And some new equipments on, you know, shooting footage, new cameras, new drones. Hopefully we can get some, like, very exciting frames that we can show you when we are venturing into the wilderness. Ryan.

Ryan · 1:01

Yes, we can capture a lot more at Origin, which we're super excited about with some wearable cameras and drones. And we'll hopefully have some much more like multimedia content in the coming year to share what it's really like at Origin. And this was a, you know, last year was a particularly unique year for us because at least it was the first time and I believe it was your first time when we've just done so much tea travel.

Ryan · 1:25

I've never been to the three major East Asian tea producing regions in the same year. And we got to see several tea producing regions in China, in Japan, in three different places in Japan, and then in Korea, in South Korea.

Ryan · 1:40

And so really just comparing and contrasting and talking with producers and farmers, understanding what they think about quality, not just for matcha, but for tea in general. It really renewed my sense of appreciation for the incredible spectrum of flavors that you can get out of tea.

Ryan · 1:59

Like we went from a fresh milled gyokuro that we milled on our countertop mill with the cooling system and controlled compression that straight up tasted like, you know, avocado in a blender. It was so rich and so creamy and umami all the way through profiles that kind of tastes like mud in the earth, like fresh shou puer from Jingmai Mountain that was worldwide, which is wet fermented in Menghai, which is so earthy and dark.

Zongjun · 2:32

You would look at it and think that it's black coffee and all of the this spectrum is mind blowing of the flavors that can be expressed just from this one plant. It's kind of miraculous. Yes, indeed, in retrospect we should have invest all these new equipments much earlier.

Zongjun · 2:50

We can get some pretty amazing footage on all of these things we have experienced and not only we end up tasting all these tea. We went to all these places doing a lot of these places during their production season and just seeing the difference between all these people in how they understand the T plant itself. How do they farm them, how do they gardening them and how do they process them into the end product and how do they understand their preference and their quality for the product? They wanted to create very interesting contracts. And I would say in some ways they are quite in the opposite direction almost if you compare

Zongjun · 3:32

how tea is getting farmed, not not necessarily getting farmed, getting, you know, treated in the wilderness in in in in Yunnan and in some places in Korea. And how like some of the tea plants gets farmed in these like hyper engineered, hyper accurate gardens in Japan and also in some places in China too. And they both, like, they all end up producing very incredibly complex flavors, just very, very different flavor profile. I think it's quite interesting to see an experience and also in such short period of time we literally get to experience all these things back-to-back, which was quite amazing. Pretty interesting contrast in

Ryan · 4:15

perspective shifting moments for me. You know, this podcast is titled Predictions for 2026, but we wanted to reflect a little bit about what we learned in 2025 and what we saw Zoom June. What were some of the more surprising things that we learned with respect to specialty matcha or even specialty team more generally in the last year that we learned or that we saw became a trend?

Zongjun · 4:41

Let me think, I guess from a practicality standpoint, we really learned a lot actually for a lot of the knowledge that we have learned previously. You know, we never see them in practice, especially in much of making and much of farming.

Zongjun · 4:57

And we learned all these things in a very, very interesting way for our listeners. If you have listened to some of our previous episodes, we commissioned a little tencha farm in a place called Qimen (keemun) in China. And we were very naively trying to apply it our own understanding of how to make tencha into this little farm that is sitting in a mountainous area in Anhui, which historically produce Hong cha, red tea or black tea.

Zongjun · 5:31

And no one knows how to make tencha in the area. We were kind of the quote UN quote expert and we were telling working with the farmers on how to how to how to do shade growing, how to do picking and how to do processing and everything is super, super, you know, bootstrap and grassroot.

Zongjun · 5:53

And obviously we end up making some pretty, you know, not tasty tea. But I guess one thing that we did end up learning is just how incredibly difficult it is to do all of these and how incredibly, how much assumption I would say that we made before we kind of dice into doing this whole Commission project like steaming time, processing time, toasting time. How to how exactly do we control the moisture? How much moisture do we want to leave in the teeth? And how do we how could we even know that, you know, the tea is dry enough by the end of the day? We have no idea what we were doing and obviously we didn't do everything right.

Zongjun · 6:37

And and that was actually a pretty interesting head start for us to kind of or, or how do I say it, it really prime us into a very good mentality when we actually got to experience all of these in Japan. So the harvest season in Japan is later than Qimen (keemun). So from back-to-back we finished our processing in Qimen (keemun) and we had to, we had to Japan to see some actual, you know, matcha farming and matcha production.

Zongjun · 7:05

And that was pretty, pretty interesting. Like we, I think the whole Qimen (keemun) experience kind of prime us into a mindset that we, you know, know exactly we want to look for. Like we know a lot of the questions we wanted to ask. And that's kind of prep us into the mentality of not just a learner, but a participator of the whole process. We want to learn it so that we can actually do it in one day. And I think that's a very interesting mindset that the Qimen (keemun) project has primed us into. Yeah, it's like one of those things they say that you haven't really learned something until you're able to teach it. It's a very similar mindset,

Ryan · 7:48

like even small list of details, like how do you homogeneously steam the tea? Because we were doing everything 100% hand process. So we had a gigantic wood fired wok and even just like keeping lasting the right temperature with some gigantic chopsticks in what is essentially a big dim sum tray. I for about 8 hours I steamed 200 gram wet leaf batches and just making sure everything is steamed the right time and homogeneously steam.

Ryan · 8:21

So there's some parts that aren't under or over. It really makes you appreciate like, just like one very tiny piece of tea processing that's done has been mastered in Japan when it comes to to the steaming uniformly at the right temperature at the right time and in such a uniform way.

Zongjun · 8:41

Yeah, it's think, you know, when it comes to steaming, like modernization or mechanization of the process really helped improve quality because when you look at, you know, sencha, like pan fried sencha for other teas like green tea in China or Korea or poor in Yunnan, I think that the traditional way still use a better product because unlike steamed sencha, pan fried sencha, you can actually touch the tea in the process, feel the density, feel the moisture and you have a lot more control in the end product versus steaming.

Zongjun · 9:17

You know, you close the lid and you can't see anything. Yeah. It's a blind box and I think there's, you know, like too little control of the process that we couldn't really do a lot of on time optimization along the way. In a handmade framework, yeah.

Ryan · 9:35

Yeah, yeah, yeah. That was interesting. The other interesting thing is for my entire like quote UN quote tea career, I've been educating on tea for close to a decade. And I always used to say that, you know, if with matcha, shaded cultivation leads to light deficiency in the plant and the plant kind of freaks out, produces tons of chlorophyll, and that's why it has this really bright green color. And I always thought that to be true. And that's what I've been told.

Ryan · 10:03

That's what everyone says. It's actually really not true. It's much has much more to do with the cultivar because we were using what are generally red tea or black tea cultivars. And in this case it's not exactly a cultivar because it was what we were using, a seed propagated field.

Ryan · 10:21

So technically, if you put it in Japanese terms, it was zairai, but a zairai lineage that's really suitable for black tea, really high catechin content. And it wasn't that green. It was shaded I think for four weeks with 80% sunlight blockage from raised tana shelf, raised kanreisha, and it was still pretty pale. It would be like what's, you know, someone who like wouldn't, didn't have the context, could very easily assume it was an under shaded or not shaded green tea at all. And we, we, you know, obviously steaming time will also affect the color, which we really well optimized to be a short steaming time as possible without, you

Ryan · 11:04

know, getting any reddening. So the steaming was actually effective at denaturing the enzyme polyphenyl oxidase, which keeps green tea green. But it's, it was pretty shocking to me that the chlorophyll production, at least to the naked eye, was not obviously better looking.

Ryan · 11:22

Our end tencha product was still pretty pale in a way that was really weird to me. Maybe it's there was some others very, very yellow all throughout production too. And even the wet leaf, the way it was picked, like it was very far away from these general tencha colors that we're seeing out of Japan, which, you know, at the highest end almost have the score of blue hue. Yeah, and the, the shape of the bushes or the shitate is very different.

Ryan · 11:51

The growth is very different. It's very interesting. I I think it you're right, it has a lot of things to do with the cultivar. Like all these tea bushes in Chieman they didn't like really end up growing all these very thin long soft stem that shoots out some new leaves.

Ryan · 12:10

Like the tea we end up picking in Uji, the growth it's quite I would say the growth was actually quite weak for the bushes we end up shading. I don't know if the bushes would just trying to adapt to this new shading, you know, practice or it's just, you know, like the cultivar and how did responds to blockage of sunlight Very unclear.

Ryan · 12:33

Almost too many variables to know, but it was really a fantastic learning experience for us. And, you know, at the end of the day, it was very low cost and we really learned a lot just by, you know, working through the fundamentals. OK.

Zongjun · 12:46

How do we do this in a place that's never done this before? Making the knowledge we learned in Japan and then kind of filling in our own knowledge gaps when we went to Japan for harvest season. So that was really cool. But the other thing that I think we learned that kind of was surprising is how much a difference of fertilizer can make to the final flavor profile of the tea or the matcha.

Zongjun · 13:10

It's incredible. Like we taste a Uji Asahi, one is fertilized, one is not fertilized back-to-back and they were just two different teas. I think arguably fertilizer probably end up making the biggest difference in matcha flavor profile, but to the point that I think we should consider fertilizer as part of the recipe.

Ryan · 13:35

Yeah, 2025 was the year that that discovery really cemented in our brains and our stomachs. It's having that back-to-back sample. Like, you can talk about terroir and processing and history all day, but until you've tasted the difference between fertilized and unfertilized tea and what a massive difference it makes to the flavor profile, like that other stuff is just kind of fluff.

Zongjun · 14:01

Yeah, that was shocking. I mean, I used to be quiet, I would say having a lot of criticism in this over fertilization practice in Japan, But I think I have slowly changed my opinion about this. I mean, like, you know, you should really view fertilizer as part of the flavor of product creation. It's part of the process processing of matcha. It's not just a farming technique. It's not just, you know, aiming for shooting at higher production, which is the goal of fertilizer in many other tea production regions in the world, but in Japan, it's really part of the flavor creation.

Ryan · 14:36

And you know, if you really do it well and you do it organically, you can create some pretty amazing product, amazing flavors, without harming the environment or the tea. Absolutely. And I guess one last thing to put on reflections that we've really learned in the last year to put a capstone on on this segment is I think this year we were the most academic we've ever been when it came to reading books and looking into the literature.

Ryan · 15:03

Been doing a lot more deep and primary research, you know, talking to different scholars and, and different tea farmers themselves and, and learning these different histories. Is that the the feeling that the specialty matcha movement people who are interested in matcha itself as a product outside of the deep cultural context of tea ceremony is a really distinct and separate culture than tea ceremony that has been like really firmly cemented in my mind.

Ryan · 15:35

Like these two groups care about completely different things and they form preferences on 2 entirely different things, right? Like the Japanese tea ceremony people, well, it's a beautiful art. They really fundamentally do do not care about product distinctions beyond what they are told by other people.

Ryan · 15:53

It's not about the ground truth, objective truths of the product itself. That it's hand picked, that it's honzu shaded, that it comes from a particular cultivar, that that particular cultivar has a particularly interesting history or came from an interesting lineage or you know, the way it was processed, the way it was milled.

Ryan · 16:11

All of these factors really fall outside of the scope of appreciation that tea ceremony, almost most tea ceremony people have. And if they do have it it, they didn't learn it from Chanoyu from one of their schools. They learned about it on their own.

Zongjun · 16:30

And especially reading the books like Cultivating Femininity and Making Tea, Making Japan. And after talking to a whole lot of people, it's become very apparent that these are two completely different markets that are building preferences on 2 completely different axes. And I don't know if these worlds will meet each other, but it's I think it's best to keep these two segmented. Yeah, and it's a really interesting microscope to look into Japanese history and culture as a whole. A lot of these phenomenons are kind of the reflection of, you know, what the social hierarchies historically been in Japan.

Zongjun · 17:09

And the very reason why, you know, all of these knowledge is not part of Chanoyu is because, you know, like this class or this group of people of practitioners has historically been very far away from the farmers. I almost get a friend on behalf of the farmers and the legacy of matcha production. I mean really, if you read through any of the literature in the books, especially anything Japanese tea related, especially at the intro level, but even at the advanced levels, looking at these different histories, tea farming is entirely outside of the scope of tea culture.

Zongjun · 17:43

You go to like a cultural booth. I went to a cultural booth at UNESCO, and there's not a single thing really about tea farming. There's a lot about Chanoyu. The Urasenke Foundation was there. They had some Chasen makers there at the UNESCO headquarters here in Paris.

Ryan · 18:00

Or you go to different art exhibits. And just the way that this is presented to the world, the people who actually make the product are entirely considered outside of the scope of the culture. Yeah, I mean, not only they're outside of the culture, they historically, well, thanks to industrial revolution nowadays, but historically they can't even consume the very product they made if they can't afford it. It's quite an interesting phenomena, yeah. Very bizarre.

Ryan · 18:26

It's I'd love to double click on that more and in the next year. All right, we just came from Yunnan in some pretty rural areas in Yunnan and comparing and contrasting that agriculture, which I don't even know if it's fair to call it agriculture. Forest management maybe to compared to what's going on in Japan is was an interesting breath of fresh air seeing trees that can live to 600 years old or 1000 years old. The oldest one that we saw is estimated to be 2000 years old. And you can compare it to these agricultural practices in Japan, where it's not uncommon to hear some Rockstar Uji matcha farmers will replace their tea trees

Ryan · 19:05

every 25 years because it's more fragrant and they generally produce more flavors as young bushes. Just very different mentalities and what is considered quality. And it kind of inspired me to be super interesting to take like the top high end matcha and serve it to someone in like rural Yunnan and take one of the best, you know, ancient tree, single tree, gushu pu'er, tong pu'er and bring it to Japan and have, you know, one of the top matcha producers taste that and be really interesting to show that ideas of quality.

Ryan · 19:41

Probably there's a lot that's in common across borders and across cultures, but there's also probably a lot that is very different and that it really is a social construct of what people consider most human intervention being matcha shaded fertilized process, but is probably the least human intervention. You know a lot of these 2000 year old tea trees and they can't be picked, but the ones that are hundreds of years old that can be picked, right.

Zongjun · 20:08

It's it's really not intervened. The tree is in the forest doing its thing. They pick the leaves, they process them and it's two really complete. Very contrasting things. Yes, indeed. And I would argue that they are really just two different product and it just happens that tea is a common ingredient.

Zongjun · 20:29

But and even the tea itself, I would argue that it's not really the same thing. Yeah, it will be like having or Burgundy producer to drink a high end Chinese baijiu and have a baijiu drinker that drinks a very high end like elegant Burgundy. But the flavor profile is too different and the gold or the assessment of quality is it's two different 1 is about, you know purity and cleanliness and the other one is about explosion of flavors.

Zongjun · 21:01

Their indicator of quality almost a contradicts each other. Yeah, the practices of both parties would horrify the other outside of their context. Yes, indeed. You know, coming from a Chinese tea drinkers in the beginning, I'm certainly biased towards, you know, how how tea gets made in Vietnan. But you know, after all these years, I think I'm getting more open minded.

Zongjun · 21:23

It's really just two different theories and you know, criticizing 1 framework or one theory using another. I think it's it's unfair. Yeah, that's true, and it's very unfair. It's they, they they both produce very interesting tasting flavors.

Ryan · 21:39

And I think it's really by the end of the day, your own preference of the product. And also what do you care about? Yeah. In those stack rank priorities. Absolutely shout out to our favorite podcast episode ever. What do you care about? Love the title, this was a good recording. Yes, it was I.

Ryan · 21:56

Really liked that episode. All right, predictions for 2026. So just to give everyone a bit of a primer, we did not coordinate. So Sam and I do not know what each other's predictions are. Sam, would you like to go first or should I? Hello.

Zongjun · 22:11

Go ahead, Ryan. We might end up having some overlaps, you know. After all, we experienced a lot of these things together. Indeed. But even if it's overlaps, we might have contradicting predictions, which will be very interesting that.

Ryan · 22:26

'D be. That'd be interesting. OK, prediction I5 and maybe I'll have 6 by the end of this recording. Well, why don't we go 1 by 1? OK, let's go 1 by 1. So my first is that the matcha shortage intensifies. I think demand is way more sticky than what appears at the surface.

Ryan · 22:42

So like at the surface level, if you look at what's happening with the international consumer base for matcha, you have the loudest, fastest movers creating the most viral content. And I think they're moving, they're actually not a very good bellwether to what what's happening with the majority of consumption. And I think the average consumer moves a whole lot slower than the people that might want to move off matcha or say that they want to drink it less or maybe they're getting into hojicha powder or something else.

Ryan · 23:13

And that the average consumer, it's really much slower moving. I think it also that's correlated in this is that the Japanese yen is still incredibly weak. So especially for countries that have really high relative income and purchasing power, going to Japan feels incredibly cheap at the moment, which you know, when you're in Japan, you want to go do touristy things and cultural things.

Ryan · 23:38

And one of the cultural things, especially now, especially after the March is shortage is by matcha, which is going to continue to fuel domestic demand driven by tourism. But even when we were in Japan and Tokyo most recently a couple months ago, and it seems it like the Japanese consumer market has sort of beginning to rediscover their own products.

Ryan · 24:00

And matcha lattes are, you know, becoming, they are a thing for tourists that come to Japan. But they seem to also be gaining A popularity among Japanese consumers themselves as a new format to drink matcha and tea and to get caffeinated in.

Ryan · 24:18

And so I think domestic demand is going to continue to grow. And I think that and I think that people are just beginning to get a taste of a good product for the first time and like this average consumer base is growing and that these movements happen slowly and consumer awareness happens slowly and that we're just building up this momentum. I mean, even if you pick like a random market like Paris, this is not a trend.

Ryan · 24:45

Matcha is absolutely not a trend. If anything, it feels like it, it's growing in a market like this. And then you multiply this times like the 100 most important cities in the world, people are just beginning to get a taste of this product.

Zongjun · 24:57

So I think the demand is going to go crazy again. Yeah, I, I largely agree, although I do have a little bit more pessimistic comparing to you, Ryan. And I think in some regions actually is going to be saturated or even plateaued. For example, in Thailand, sheer amount of matcha cafes or places that serve matcha is just incredible. And we were talking to some cafe owners in Bangkok and they were telling us also that it's definitely saturating, but there's still new matcha cafe being opened every day or, you know, every month in in Bangkok, which is buy incredible. Yeah, I think, I think Bangkok

Zongjun · 25:41

is just on a different level because one, it's a much more mature market, but two, the pricing sensitive, the price sensitivity and price increase is driven by the matcha boom. I think price is out a reasonably large portion of the everyday consumer market like even in Bangkok to get a good much that's about four or five U.S. dollars and for the quality you're getting, it's incredibly good deal.

Zongjun · 26:05

But it's still like three times the price of a meal that's, you know, pretty delicious that you can, you know get randomly. So it's like really still very inaccessibly priced. So I think, I think that also has to do with that, that churn.

Zongjun · 26:19

I I agree. I agree. I mean, like it's just, you know, a next level or future version, but a future conversion probably for a lot of the regions in other places too. I think that, you know, Paris or you know, places it is in the US or, you know, other cities in Southeast Asia or even in Japan will probably at some point evolve into a pretty similar situation in Bangkok, which is also my other concern about the saturation or the slowdown of expansion of matcha. Is that true specialty?

Zongjun · 26:55

It's still in the brewing like there's not enough specialty out there yet. Japan is too small and it's it's really not diverse enough in terms of productions in different regions that makes very different products. And also global participation in forging this specialty movement is still very slow. Most of the innovations we see nowadays are still coming out from Japan in very slow pace and from China, which is, you know, mainly on how to mass produce this new product. So I think that's a obstacle that I hope, you know, we can overcome together because you know, right now for for for people that want to add value

Zongjun · 27:41

into matcha, it's really largely still on consumer facing products and how to optimize them. I mean, people outside of Japan like new innovative format or technique in preparing A matcha drinks do more educations on culture and context and new packaging design.

Ryan · 27:58

I think that's it. Like people still lacks in agencies in making a difference, which is I think something that that's blocking a lot of innovation and creativity globally. Yeah, I, I totally agree. And I think this is something that, you know, not only are we going to see overwhelming demand in the coming year, but I think the specialty movement might actually taper a little bit.

Ryan · 28:21

I think it will still grow, but I don't think it can grow as much as it could. And by specialty, you know, people featuring, you know, single farmers, single cultivars, single origins, special processing techniques like really making product distinctions about the ground truths of the way the product was produced, how it was picked and etc, versus just being poetically named product.

Ryan · 28:45

But the biggest structural barriers is that all the good material is basically spoken for by existing companies and all of the big existing companies, whether it be the blend houses or, you know, some of the really large players that we see even in the specialty space, there's very little oxygen left in the room for anyone else left to do anything interesting that is a newcomer. Like let's say for, you know, the gigantic Kyoto based blend houses get a lot of the best material that's grown in Uji, that's grown in the surrounding areas. And they're servicing that material, servicing A largely a more international audience, but

Ryan · 29:24

also traditional tea ceremony base. But it's largely focused on the traditional side, which is great. That needs to be kept alive. But there's very little good or interesting material left that can be transparently labeled for anyone doing anything innovative or outside of that scope in a traditional world, which which it's not good for the specialty movement.

Zongjun · 29:46

That's, that's so true. Like a lot of these interesting regions around Uji, like Mie and Shiga, they, they, they make sting. They they, they make interesting raw materials. They they they use interesting single cultivars for their production, but they all goes into all these large blend houses.

Zongjun · 30:07

There's very little left to be purchased for people outside of the system. Yeah, it's like all the best coffee in the world gets dumped into, you know, Nest Cafe or Maxwell House or. Or better comparison would be like all these vintage or interesting whiskey end up getting blend into like a Johnnie Walker Blue label or a very high end McAllen. I mean they are good products, but there's no specialty. Like you can't really learn anything by tasting them. You can learn the craftsmanship, but you can't really learn anything about the the product itself or the tea itself or the ingredient itself, which I think

Zongjun · 30:45

it's really blocking this specialty movement. And the other very discouraging fact that we kind of experience is that for the other places that are not necessarily getting bounded by the system in Japan, we've vent ventured into some of the areas, for example, of Fukushiyama.

Ryan · 31:05

It's just all Yabukita really. Very little interesting things being made in those places, which was a little discouraging, yeah. Absolutely. All right, Sam, what's your second or what's your one of your predictions? Well, we kind of both talked about our prediction on the market.

Zongjun · 31:24

I guess my second prediction will be which one should I talk about first. I guess kind of continuing your comment about things are slowly changing in Japan too. I think Japan will open up more and we are already seeing this happening. There are more traditional brands start to embrace this global matcha trend, start to kind of forego their old tradition in matcha has to be consumed this way and this way that they are creating new brands that were optimized for the Western palette, are optimized for making matcha latte.

Zongjun · 31:58

They're optimized for this increasing demand. And I think they are really less rigid than we expected. And also we are seeing a lot more participation of people outside of Japan that's making a difference inside Japan. All these people that we met at Obubu, they were or largely foreigners that are really doing some pretty incredible works on site in farming matcha, taking care of tana and the traditions. And we saw, you know, Marc from Ooika is working with, you know, the new generation of OGT farmers in preserving the traditions.

Zongjun · 32:33

And we also seeing like people like Nekohama, who is, you know, going around Japan trying to revive, you know, all these abandoned tea fields. And I think this is a wonderful thing to see, you know, like Japan is opening up just like, you know, it was back in Meiji Restoration, how he opens up to to the West and, you know, miracles happens.

Ryan · 32:53

Yeah, a conversation gets to start. Yeah, I I totally agree. That wasn't one of the ones that I have. But we're starting to see that. We're starting to see that more and more and hopefully more and more tea farmers move away from the auction route or the wholesale route and try to build relationships directly with, you know, people starting brands and other places.

Ryan · 33:14

And so that people can go and source direct from the farmer, which is what it would be a more healthy ecosystem for, especially for the farmers. But it's also something that every new western or non western actually non Japanese company wants to do is to have these direct relationships.

Ryan · 33:30

And the reality is the majority of the people that say that they do actually have a direct relationship with the intermediary that might also do a little bit of agriculture themselves. But what they really are refiners, sort of blenders that, you know, they they might have some production that they have. But you know, the majority of their volume is, you know, from purchased RHR and that they then refine and mill into product. But having a much more direct connection with it would be would be a great direction to see this industry go. Yeah.

Zongjun · 34:00

You know, this is really, I would say, kind of related to my last prediction is how a lot of these agencies, a lot of these in the processing capacities do largely being controlled by entities in Japan. And I think that's really blocking a lot of innovations and creativity.

Zongjun · 34:17

But you know, like we are slowly seeing this being changed. I would say one elephant in the realm is China. China is really picking up productions and right now most of the products are still very mass market quote unquote culinary grade. But you know, like they are acquiring the technology and I think it's not super far away for them to start acquiring the art in making a good product.

Zongjun · 34:43

And I think that's my next prediction too. I don't know if that overlaps with you, Ryan, but the Chinese matcha is going to prevail very soon, I think. Yeah, that is mine as well. And the way I put this is that the bamboo ceiling on Chinese matcha will finally break.

Ryan · 35:00

And I think it's going to break for a couple different reasons. One, exactly as you said. So, you know, if you think about anything as the art and science of doing something, the Chinese are like really accurately in the phase of the science of making matcha, right? They brought in experts.

Ryan · 35:16

They brought in Japanese processing equipment. A lot of the companies and subsidiaries that are set up in China are Japanese owned or partially owned by Japanese. And they're really investing in volume, investing in volume to for exportable matcha to Europe and the United States, because that's the direction of the growth.

Ryan · 35:37

I mean, a lot of the conventional Japanese agriculture is literally not exportable because the pesticide residues are way too high. So it makes sense that they're investing so much in the science of making tencha and then making matcha. And it's very much it filling the bottom of the market, which is where the market is going, right? Like if it's showing up in ingredients in 10,000 places and there's a bunch of cafes that don't care about origin that need like reasonably priced supply that's relatively consistent.

Ryan · 36:07

You know, China is an expert at this, but the art of making matcha, I think will, is slowly starting to develop in China. And we've recently had some samples that blew our minds and yeah, really reset our expectations for the quality ceiling of what Chinese matcha can be.

Ryan · 36:27

And I think that the current matcha shortage has moved so many vendors and so many matcha brand owners to the point of desperation. And desperation in some cases might be a bit of a more of an extreme word. In other cases to be more creative in their sourcing and start looking outside of Japan to pockets of value.

Ryan · 36:47

And Japanese matcha is going to get a little bit in trouble at some point. I don't know if it's going to be in 2026, but in the coming years the price to quality ratio of Chinese matcha is going to reach parity with the price to quality ratio. You know of Japanese matcha, I'm not talking about the highest and Uji matcha, like I'm talking about mass market, like average ceremonial grade coming from Shizuoka or Kagoshima or some from high volume area that is exportable. So it's not just Japanese conventional agriculture, but it meets American or European standards for export. The Chinese are going to surpass

Ryan · 37:28

the Japanese in that cost equality ratio and that middle of the market and low end of the market in Japan is going to be in a lot of trouble. Yeah, although I think that the one thing that I think it's good for the buyers or consumers is that the Chinese much are not necessarily being bounded by this weird auction system that we see in Japan.

Zongjun · 37:51

So the price I think will be much more transparent and the dynamic between buyers purchasing willingness of purchase and the the the the suppliers willingness of selling I think will be more kind of in the equilibrium than you know the phenomena things as the conditions we are seeing in Japan. Yeah, it's much easier to do business in China for many different reasons.

Ryan · 38:15

It's not only culturally speaking, but it's also a buyer's market. It's not a seller's market, which is what it is in Japan. Also the reason I phrase it, you know, breaking the bamboo ceiling is I think a major Japanese, Western Japanese focused matcha brand that's, you know, not Japanese based is going to offer a really high quality Chinese matcha and it's going to break the ceiling it we just need one first mover, you know, I hope.

Ryan · 38:45

So I hope so. That will be great. If someone like Kettle or someone like Rocky's Matcha or someone you know, this sort of well known, well respected brand caliber offered a really high quality Chinese product, I think it's going to like it gives everyone else permission to like it breaks the stigma a bit. So I think that the feeling.

Zongjun · 39:12

Actually saw this happened before in wine, like a Chinese wine really picked up some momentum after Chateau Lafitte decided to open their first winery in Shandong. It really broke the stigma of Chinese wine at the time and really unleashed a lot of freedom and people's willingness into into doing productions and also on the consumer side, buying and trying. Yeah.

Ryan · 39:39

And the investment too, like the stigma even within China itself about what the risks that producers are willing to take to try to improve the art of their product to make it tasty, that's better. And I think China also has a couple other headwinds at its side.

Ryan · 39:56

And, and the other is that it's it's cultural claim to the origins of matcha. You know, this can be a very long debate about whether or not matcha is Chinese or Japanese, literally depending on what you care about and how you frame it, you can argue both sides. But China does have a cultural claim, at least to. Yeah, the Matcha or matcha's predecessor and you starting to company glean into it China can re own its own product. Yeah.

Zongjun · 40:24

And you know what, Ryan? Not only they have the cultural claim, they don't have the baggage in doing any innovations or changes. There's no continuous history or entity to hold anyone accountable. They, they, they have the pass to do it and they don't have anything to hold them accountable, which I think is it's, it's going to be very, very exciting actually.

Ryan · 40:47

It's an interesting renaissance because, you know, there's a lot of revisionist history out there about Chinese matcha, Chinese mota. It's a dead culture. It hasn't been practiced. The practitioners are dead, they're long dead. The farmers and producers that made it are long dead for 800 years.

Ryan · 41:05

And anything that you see now is revisionist. It's not a continuous or living culture. It's not bound by any rules or lineage. It's some people reading some old text and making a whole lot of assumptions trying to replicate this thing.

Ryan · 41:18

And that's great, but it could lead to a new powdered tea renaissance in China of them, like leaning into that disconnected heritage. I guess it's still heritage and kind of reinventing it. There's a new cafe in Indonesia that focuses totally on Chinese matcha and they're doing some really interesting specialty drinks.

Ryan · 41:37

There's even like an Osmanthes matcha specialty drink there. And Osmanthes is like a real, really trendy flavor in mainland China right now. And I think Chinese like reclaiming that heritage and reinventing it is a really cool way that just tea culture can evolve in general and then be exported to the rest of the world.

Zongjun · 41:59

I totally agree which this leads to. My next prediction is that the definition of macho will become more and more blurry and I think it's a very good thing to happened. I think it should be blurry enough to actually. I have have some contradicting thoughts. One hand, I think the very definition of matcha is itself should be blurry so they can unleash more freedom. And on the other hand, I think it might be actually better for matcha to remain as matcha.

Zongjun · 42:30

And this powder tea or this Chinese morcha should live in a totally different bucket. Or maybe people should start adopting the term morcha to vaccinate for, you know, powder tea or powder. Not just green tea, but all kinds of powder tea. That's not coming from Japan.

Ryan · 42:47

I don't know which way is the correct way. There's probably no correct way in doing this, yeah. But I think this, this is something that needs to happen. And I think it's really good that China can be part of it because it can really kind of shut that shut down or conclude a lot of these debate over traditions or cultural heritage relating to Japanese matcha. You've unleashed a can of Worm Sam. That's for our listeners.

Ryan · 43:17

This might be the single most debated topic between Sam and I Privately. We have probably spent close to 20 hours disagreeing with each other over whether or not matcha should be exclusively made from Japanese tancha. Or is it just a format? It's just like another way of calling, you know, powdered green tea.

Zongjun · 43:37

And still unresolved. But I think I've moved you a little more in the center than you were before. Yeah, yeah, maybe maybe, you know, like I think, you know, owning Mwacha is still very beneficial in a way that it really gives everyone a fresh start in doing things differently and it really kind of help everyone cuts cleaned in receiving any criticism or accusation of, you know, not respecting the tradition, which I think, you know, in some ways it's it's true, right? Like people disrespecting the tradition in some very unique and interesting and really stupid way that we saw in some products last year, to which one

Zongjun · 44:22

of the product is a much apace. Coming from Oku Midori, Japan. Oku Midori, that's the actual place is it? But I think I think that people needs kind of like a safe umbrella to to do creations and to do innovations. And I think Chinese Mocha, I'm speaking from a Chinese myself, is a very safe haven for people to do so.

Ryan · 44:45

Yeah, On the other side, it's very confusing for consumers. A lot of Chinese mocha will look, taste and have the same health benefits of matcha. And you have thousands, 10s of thousands of unique players out there that are all going to label it the same way because there's no labeling standards and you're already seeing it. And you're going to what is probably going to happened as a gigantic chaotic sea of people labeling, classifying things their own way.

Ryan · 45:13

Some might call it muchas and yeah, call it Chinese muchas and the original matcha. Some might call it just muchas. Might call it other powdered teas like Goku or matcha. But call it matcha or Goku or matcha like you just cannot control people do in a highly unregulated market.

Zongjun · 45:30

That's true, that's true. It's there's a very high risk for a matcha being the next ceremonial grade. Yeah, I'm against abstractions in general, like ceremonial grade or even just like classifying and defining matcha or mocha as a form of information reduction.

Zongjun · 45:49

My, what I think is the cleanest solution for most people is to embrace as descriptive a name as possible. So, you know, Chinese matcha is OK, I guess. And some people can call it Chinese matcha. If it's made from gyokuro, you call it gyokuro matcha and you just treat it as a format because otherwise it gets so confusing for people. Or powder I.

Ryan · 46:11

Don't just call it tea powder. More powder tea, but then there's stigma and then so long as there's money to be made and so long as there's stigma, you know, people are going to go for the term that is more trendy, especially if you're in a less educated market. I mean, if you're, I'm going to pick some more random, if you're in Romania and you have a tea brand there and you are introducing powdered gyokuro, are you going to call that powdered gyokuro or are you going to call it gyokuro matcha, right. Like the correct business decision and what I would actually advise raise this person to do is to call it gyokuro matcha because people are

Ryan · 46:48

going to instantly be able to understand it versus powdered gyokuro. Like people don't know what gyokuro is for the most part, right? But people do know what matcha is and it looks, tastes and feels very similar to matcha. And they're not lying because they're saying it's gyokuro. They're just 1000 little use cases like that that will happen and it's just going to be a mess. I agree.

Zongjun · 47:10

I agree. Messy and fun. We will see. New culture formation, I mean new culture formation is always chaotic. So you know, standards will eventually come, it's just going to be on much longer time horizons. So, you know, especially within like specialty coffee movement, for example, and 3rd wave coffee, so-called 3rd wave coffee, you know, the movement grows, it develops standards, it will self police. And you know, you, you're always going to have disagreements with change and introducing new products to new places and with different marketing lenses.

Zongjun · 47:42

And it's, it's going to, it's going to happen. But anyway, to conclude, I think the bamboo ceiling on Chinese matcha is going to break in 2026 and people will begin to accept that high quality matcha can and will be grown in China.

Zongjun · 47:54

And I think it's going to happen with one or two well known brands adopting it to their menu or to their offerings, which will give everyone else quote, unquote, permission to to offer one with with less stigma. Agree. Agree. All right, Brian, you want to do a next one or do you have another one?

Ryan · 48:11

I do have another one. I think that gyokuro matcha format will also be unleashed in 2026. We've tasted it and. The. Cost equality, Yeah, it's amazing. The cost equality ratio you can get on gyokuro is insane when you compare it to matcha from tencha.

Ryan · 48:29

And I recently learned. And thank you to Marc from Ooika for sending me this article. Is that Starbucks? Japan just launched 2 new what they call, quote, gyokuro matcha drinks to their menu even. Yeah, talk about that debate.

Ryan · 48:44

You have brands like Starbucks, which are like the literal early adopter of matcha to the rest of the world are calling it gyokuro matcha. So there you go. Wow. Decision made. Hard decision. Maybe it's hard to fight trends that are controlled by other people, so sometimes it's just easier to pick the easier term. And sometimes stir self fulfilling prophecy. Yeah, absolutely.

Ryan · 49:11

Literally create their own trend because they are they have so much control and influence. Absolutely. So I think gyokuro matcha is going to become a thing. It tastes incredible and it's there's and it's more fragrant too. So in a lot of like latte formats or even like cold formats like Frappuccinos in general, at least in our experience, the fragrance that you get from gyokuro, I think will pierce through a lot of form factors even better than matcha.

Ryan · 49:38

And I actually think if you think about like what could overtake matcha as a trend. And like a lot of people talk about hojicha, but I disagree with that one because hojicha doesn't have the same functional benefits as matcha.

Ryan · 49:50

You know, it's not as nutritious and has way less caffeine, which really matters what people care about. It's gyokuro. The price to quality ratio is better and it looks, tastes and smells so similar to matcha, especially when you're putting it in these quote, unquote watered down formats, these lattes, these Frappuccinos, It might actually be better. And, and actually, if anything overtakes matcha like gyokuro matcha could really dominate.

Ryan · 50:18

And if you think about it from a Cafe brand owner perspective, like if you're thinking, OK, what cool new innovative menu option would I want that might get people interested. While everyone's interested in matcha right now, I tried to go gyokuro matcha. So fragrant.

Ryan · 50:32

Honestly, it tastes better in like my latte than the ceremonial grade matcha, which cost double, which I'm sourcing tastes in this beverage. I'm going to get a gyokuro latte or gyokuro matcha latte. It's just a very obvious line extension or innovation that cafes can bring to their menu.

Ryan · 50:51

And, and it's from a specialty standpoint, it's much closer to the craftsmanship of the farmer themselves. Because when when you're comparing to tencha, making tencha really requires a lot more interventions of machinery, which are now largely controlled by all these shaggy factories in different area. But for gyokuro like farmers can process them themselves. And that's a much, much more interesting specialty landscape for people to explore.

Ryan · 51:23

And it opens much more freedom of creativity from farmers to farmers. And actually after talking to some farmers in Japan, like gyokuro is the product that they feel proud of making because like the tencha they end up making just gets blend or gets procure by all these large blend houses. Like they don't have their own stage in the final product, but for gyokuro they do.

Ryan · 51:47

Yeah, absolutely. And the the ability to source direct from farmers is so much easier and people just need a way to mill it. So I don't know whether or not they get it ball mill there. It also mills super well in our mill that we're launching, which we'll talk a little bit about the end. All right, Sam, I have a #4.

Zongjun · 52:02

Do you have a last one? I do, I do actually relates more to the Chinese matcha topic that we were talking about. Mine does too. OK. I'm curious. Oh really? Well, my prediction is that not only the production in China from matcha is going to show some tractions to market to I think in a lot of areas is finally making a comeback for people to start consuming matcha in China.

Zongjun · 52:28

Because for all these years, like people in China, they, they don't drink matcha as far as it goes, Matcha latte and all these people are, you know, fighting their brains outside of Asia for this new hot popular drinks. And there were nothing going on in China. But I think there's finally that we're seeing some changes happening here.

Zongjun · 52:48

And I think it's not only due to the global trend, but also it's of the increase of production of matcha. I think it's it's it's making a very interesting influence onto the market itself, especially if we are start seeing some places getting, you know, some markets in some areas getting saturated or plateaued or the production of Japan is not catching up to a point that they can service all of these areas.

Zongjun · 53:17

I think naturally a lot of these factories and farms that invested so much money in making all these new facilities, I mean making all these new production equipments available, I think they naturally going to want to seek new lands of expansion.

Zongjun · 53:35

And I think the domestic market is a very, very easy decision for them to make. That's easy, and especially if that actually creates a overproduction of matcha in China. We actually saw this happened in the US before in the 80s when they launched the Got Milk campaign. Ryan, I don't know if you know that. Yes, but you know, there was a systematic over production of milk in the US back in the 80s and 90s that the government actually sponsored a campaign to create this trend of drinking milk.

Zongjun · 54:09

Like drinking milk is healthy, drinking milk is hot, drinking milk is, you know, very beneficial. And it's it's the new trend that people like to enjoy. And it actually created a trend because of there is oversupply from the back end. And I think that this might happen in China too, from matcha. That's interesting.

Ryan · 54:31

I could see totally happening especially because one of the I think the five year China just released its five year plan and one of them is to increase domestic consumption. So especially domestic consumption for product that China has cultural heritage to, that's tea.

Ryan · 54:49

And you're already seeing all of this really interesting tea innovation happened in China like brands like Chagi, brands like Luckin Coffee, introducing tea in new and interesting formats. Luckin Coffee just had a huge promotion on Guizhou grown matcha talking and bragging about how finely milled the matcha was.

Ryan · 55:11

Like this is a pretty interesting campaign from a extremely large, like almost unbelievably large from a western perspective coffee chain that exists in China called Luckin Coffee having a taste for their own product. And actually I think that there are going to start to have a taste for for Japanese matcha too as interest in matcha grows.

Ryan · 55:32

There's no reason why they wouldn't want to taste higher and higher end Japanese products. And if if Chinese like, there's no reason why Chinese people wouldn't like these profiles. You see other regions in the world have very large Chinese diasporas like Malaysia, Thailand, like Singapore, those those Chinese people, ethnic Chinese people that are part of the diaspora.

Ryan · 55:57

We're seeing matcha boom over in these markets and outside of mainland China and Taiwan, same thing. Are, you know, the the taste for it definitely is something like, you know, false that that I would say Chinese consumers are primed for probably especially in the tier one cities like Shanghai or Guangzhou or Beijing or Shenzhen.

Ryan · 56:20

And even in places like Hong Kong, it's really, really, really trending matcha. Yeah, Japanese matcha. So, you know, I think if that happens, like it's like that will be a very interesting world because the purchasing power of even just kind of 2% is so mind blowingly large that we might have a very different level of shortage.

Ryan · 56:43

There's probably a lot of money to be made starting a high end Japanese matcha brand in China. I think for, you know, the Western markets, production, the geopolitical political tension between China and Japan is serving everybody a benefit.

Ryan · 57:01

Doing business between China and Japan right now is not the easiest. But really, if you imagine that the, you know, all these consumers in Japan, in China start to buy Uji matcha in bulk. My God, yeah. It could be very interesting market, but even you see a lot of like really specialty Chinese producers lean into, you know, Chinese matcha too. There's some really interesting new cafes have opened in Shanghai that really look like elevated expressions of what a matcha cafe can be, all serving a Chinese product. And if that cultural thing could totally spread within the country.

Ryan · 57:38

So I think the opportunity in mainland China and also India, I've heard matcha is really trending in India to extremely large populations, which could really affect the whole global market. OK. Do you have a last prediction not?

Zongjun · 57:51

Necessarily a prediction for 2026, but into the near to far future, I think globalization of matcha farming is the direction that we are heading towards now. We're seeing it being mass produced in China. We saw some productions in Korea and we know of some productions in Taiwan.

Zongjun · 58:09

And I think that this needs to spread further. It needs to go to India, it needs to go to Africa, it needs to go to even the the Americas. And I think a true globalized product is when it's also produced globally. And I think that's that's really will be a very hopeful direction that we can head towards. It's happening in Germany.

Zongjun · 58:32

There's someone, there's a someone in Germany, yeah, doing doing some matcha production. I think it's very small moment, but it's still very interesting to see. And I've heard there's. Some experimental matcha production being done in the Pyrenees too in France.

Ryan · 58:50

Nothing a commercial scale I think, but still very interesting to see. I am not, I wish I was. I have one last prediction, and this is 1 is a little bit self-serving, so we put it last. But Sam and I and our team member Gwen run the company Sanko Matcha Products, which is developing A matcha mill to mill matcha fresh anywhere and everywhere. It is similar quality standard as an ishi-usu or traditional Japanese stone mill.

Ryan · 59:15

It has a cooling system. You can control the compression. The plates are swappable. So we have industrial ceramic plates, but in the future we also have stones. So you can stone mill your matcha and has cooling system so it doesn't get too hot and it can mill matcha considerably faster at the highest speeds than what can be done through a traditional stone mill. So I think matcha innovation not only from our company but from other companies will also really start to make some changes in 2026. 2026 will be the go to market year for us. We're launching, we've already launched our countertop matcha mill.

Ryan · 59:52

The first units will be delivered early this year. So we'll get those out into the world, which is super exciting. And I think fresh milling in general is going to enter really the mainstream thoughts of the average matcha consumer this year, not only through our mill, which we hope is going to have a pretty major impact on the way people view matcha and matcha freshness. But for everyone out there, all the businesses that are requiring each uses all over the world, people are buying the equipment and the infrastructure to develop, to have the agency to mill matcha themselves.

Ryan · 1:00:26

And I think this idea was sort of in its infancy and let's say 2023, in 2024 and 2025 was really the year where you really started to see it pop up in new places. 2 in Paris and there's a bunch in Germany, There's a bunch all over the United States now in, in places like Philippines, in Thailand and Singapore, in Malaysia. It, it went from sort of something that was very uncommon to something that more and more brands are starting to adopt and realizes incredibly important for quality. And so I think this is the year of fresh ground matcha where it starts to take root.

Ryan · 1:01:05

This idea like really firmly starts to take root where it's not just the novelty or a trend, but it slowly becomes like status quo for quality. And we hope that this is will be not just the first step, but also very important step that we trying to unlock the blockage of all these capabilities of how people can add value into matcha production.

Ryan · 1:01:28

Milling is a start, but next blending, next shiage, there are a lot of critical components in this value chain that people can start to make a difference. And right now, a lot of these components are largely being locked because these machineries or these capabilities are just not that easily accessible by people outside of Japan. And I think that's also part of the company's mission, is to create new equipments, new leverage for people to unleash their creativity and imaginations. Absolutely couldn't have said it better myself. All right.

Ryan · 1:02:07

So just to summarize it, we've got the matcha shortage intensifies, bamboo ceiling on Chinese matcha brands, gyokuro in matcha, we'll begin to, we'll start to see that more and more. The market in mainland China and potentially India too really starts to take off for in terms of domestic consumption and fresh milled matcha enters the mainstream. Do I miss anything?

Zongjun · 1:02:33

And also specialty market, the specialty movement is going to either continue to explode or plateau left the market to decide which direction it wants to go. I think it will continue to grow so long as the supply is willing to sell to us newcomers. Yeah.

Zongjun · 1:02:53

So it's, but I think the future is bright in general. And if they don't, and you know, a lot of these matcha brands, new matcha brands focusing on specialties, single origins, being single cultivar, you know, you know, if they don't, who knows what innovation that brings, you know, when you don't have access to your plan A, Plan B can lead to a lot of new innovation. In fact, we would have never started milling gyokuro experimentally had it not been so challenging for us to source the tencha that we wish we could source. So could be just some really interesting new innovations in this new culture formation we

Zongjun · 1:03:28

have in the specialty matcha world. Totally, totally. Well, that's all the predictions we have for this year. Actually, by the end of the year, Ryan and I were thinking about doing a recap to see if all these predictions got validated or invalidated.

Zongjun · 1:03:44

Hopefully this is an annual tradition, the new tradition, new tradition. See if there we go, new movements, new traditions. Hopefully it's one that will stick. So let us know, what do you think? Do you agree with us, disagree with us? Is there anything that we missed? We'd love if you you reached out and let us know what you think and let us know if you where you agree and disagree. We'd love to make this a conversation. So thank you so much for listening and have a happy 2026. See you in the future.