Currency of Trust

Ryan · 0:07

Hello and welcome to the Specialty Matcha Podcast. My name is Ryan and this is Zongjun Li, who also goes by Sam. Hello. Hello. And we're the Co founders of Sanko Matcha products. We launched this podcast to discuss our learning journey, Matcha, share startup stories and interview experts, And today we're going to talk about the currency of trust. Have you ever lied to me, Ryan?

Ryan · 0:31

Yeah, I'm to confess. Only when it's convenient. But no, we wanted to talk about the undercurrent that is so prominent in our industry within matcha and tea in general. And that's trust. And that's really the currency that we all trade in from consumer to brand interaction.

Ryan · 0:51

We trust that a brand is going to deliver on its promises. We trust that they know that the claims that they make are factual and true. We trust large institutional blend houses that when we buy a poetically named product that it's going to taste the same every year, season after season because they're masters of blending.

Ryan · 1:11

We need to trust the organizations that regulate our industry. And perhaps most importantly, when it comes to sourcing matcha, we need to have trust within the value chain and within the supply chain or. Should you be trusting them? Yeah.

Zongjun · 1:28

How do you cultivate your own trust and how do you judge whether or not you should trust others? Mistrust is not a binary thing, right? Like Sam, I can trust like any random person. Let's say we work at a fifty person company.

Zongjun · 1:43

We can probably trust pick any random employee that they're not going to steal from the company. All right, That's relatively uncommon. We can probably trust that there are not a fraud and that their degree on their resume they actually have, but you have more subtle forms of trust.

Zongjun · 1:59

Could I trust them to handle a sales call with a very important customer, right. That's a form of trust in getting to know someone. Could I trust them to close a deal? Could I trust them to uphold our culture and onboard a new employee?

Zongjun · 2:15

So trust is really a spectrum, and these judgments that get passed back and forth is really the underlying currency of the Japanese tea industry. It's not so much about money, it's about relationships and the people that you know and are willing to work with. Yeah.

Zongjun · 2:31

And these trusts don't come they, they, they don't necessarily come as a default. It's a really, you know, construct upon credibility. And this credibility usually comes after a pretty long period of time of relationship dealing with each other and and that there's almost you almost always start with a negative trust when you're dealing, you know, with with the relationships here. There's that famous Soviet line, Trust but verify. There's some contact during the Cold War, but I don't know if it's that extreme, but it's certainly the case. And just to make the Super tangible, say you want to start a new matcha brand tomorrow and

Ryan · 3:18

you're searching for potential suppliers. The Japanese tea industry is not an industry that's for new customers. There is a matcha shortage. There is way more demand than there is supply. So how do you decide who to sell tea to?

Ryan · 3:32

How do you decide to take on a new client? It's all about the values that you have and whether or not you can trust your values at least to some extent of align with the people that you're selling to, especially to Western brands.

Ryan · 3:45

It's really not that uncommon for Westerners or foreigners or anyone actually outside of Japan to come in and be requested not to reveal the sourcing information. There's a lot of farmers, a lot of very famous farmers actually, that will not let you use their name to represent them and their products, whatever brand or stage that you're standing.

Zongjun · 4:09

On yeah, I mean like once the tea is out of Japan is basically out of their control. Actually out of their warehouse is out of their control and they have no idea how their tea will be represented or, you know, be prepared or be consumed or perceived by the end consumers. The trust, you know, like by revealing their identity, that forms a association with a different brand. You're basically bounding yourself with their reputation, which is, you know, like a pretty, you know, serious consideration with you.

Zongjun · 4:42

You're basically handing your own company life to a different entity that will be representing you overseas. And so like when you want a source, it's all about trust building in the beginning in Japan, there's very few, maybe even when we started, you know, meeting producers before the matcha boom, I guess about a year ago, year and a half, in 2024 and 23, it was a little bit more transactional.

Ryan · 5:12

There are some of the larger players that would hand you a price list and you could order what you want. And maybe there was some sales pressure. But this is completely evaporated. The degree to which the currency is no longer money and is now trust is growing and growing and growing.

Ryan · 5:28

And probably it's going to be that way for a long time. But it's so much more than supply to like especially when we talk about the specialty matcha movement, we have these influx of newbies entering a very traditional industry trying to source product and then putting different lens on top of it, in particular this single origin concept or a single cultivar concept. So you have brands coming in trying to source Uji matcha, for example, and you have that being represented all over the world as a single origin product.

Ryan · 6:02

But it's actually not very widely known, I don't think even very widely known in Japan, but especially not abroad, that almost all uji matcha does not come from uji grown tencha. In fact, it doesn't even need to be processed in uji.

Ryan · 6:16

It needs to be processed in Kyoto Prefecture. And in fact, the leaves don't even need to come from Kyoto Prefecture. They can totally be legally allowed to come from Nara, Shiga or Mie neighboring prefectures. So you know, we know of a lot of brands that label and sell Uji matcha as a single origin product where we know that they're not getting their tencha or that tea is not coming from 35 ish families that still produce tea in Uji.

Ryan · 6:48

So calling that a single origin product by most people's modern understanding, by most people's parlance, semantic understanding of this word is a form of mismarketing. Yeah, but this is a very interesting phenomenon, right?

Zongjun · 7:03

Like Ryan, who do we blame to? Like who is lying to who? Yeah, that's exactly this is. Very like, like it's almost like people are not like aligned with their expectation and their communication, right? Like the people in Uji are doing their own thing. They've been planting tea for centuries and that's their way of understanding of what Uji tea is. And you know, they were not trying to lie to anybody. There wasn't even a single origin concept back in, you know, the ancient time.

Zongjun · 7:36

And now all of a sudden, you know, like all these people coming outside of Japan come into Uji and start telling them that, you know, they have been lying, you know, with a very different concept that you know, that that, that, that, that, that it's not created by the locals.

Ryan · 7:54

Well, actually I think that's less common because it's so not well known. I don't think there's very many people accusing it yet because people don't fully realize where the, you know, the fact that Uji matcha can come from these places. I think it's the opposite place.

Zongjun · 8:08

Yeah, I think people come in and make the wrong assumption. They make them. They labeling it as a single origin. Exactly, exactly. But then, you know, consumer went on to accuse them of, you know, mislabeling or, you know, using tea outside of Uji and labeled as Uji tea. But you know, these vendors or these brand owners, they, they don't know better.

Zongjun · 8:27

They don't know better. They being told that this is Uji tea and you know, all these tea suppliers in Japan, you know, they, they've been calling this Uji tea for like hundreds of years. And there's a very interesting misalignment of definition flowing in the market.

Ryan · 8:44

Like everyone is doing their own thing. And it seems like no one is trying to like intentionally lie to other people. What is this currency of trust even is rooted upon? Yeah. Well, it's a really complex story and I think it ultimately depends on what you're interested in because you know, Uji Cha, although it can be their blends from things that are come from way outside Uji proper, Uji City like Shirakawa, Goku, Shoji City, etcetera. But it can be considered what I'll call real or true Uji matcha from Uji grown tencha, of which there's about 70 tons produced last year.

Ryan · 9:24

I don't know the statistics for this year, but that's not very much. It represents about 1 to 2% of the amount of tea that could be amount of tencha matcha that could legally be sold as Uji matcha. And actually there's some loopholes around that where you can actually expand that number quite a bit and which we're going to get into in a later episode.

Ryan · 9:44

But Uji matcha is also kind of a flavor, right? It's a blend, right? So in terms of what it's delivering on its promise to the consumer, right? It's those chashis in Uji or in Kyoto Prefecture that are blending these products together to create these consistent profiles that the world now associates with Uji matcha.

Ryan · 10:06

But that's also this is where the currency of trust comes in too right? To be labeled as Uji matcha, it just needs to be processed in Kyoto Prefecture. You know, not anyone, but anyone with the right licenses or permissions can set up a shiage refinement factory anywhere in Kyoto Prefecture and buy some mills and turn it into matcha.

Ryan · 10:26

What percentage of these refinement factories have the long heritage continuous practice, multi generational pass down of knowledge as these like traditional Uji blend houses like Marukyu Koyamaen, like Ippodo, like Yamamasa Koyamaen, like those are like what we would consider like the original a blend house is creating these flavors and leading this industry historically. But that's not necessarily the case for every single shiage refinement facility anywhere in this entire prefecture. So it is a flavor, but sometimes. Yeah, it's almost a, you know, imaginary community, like a style agreement that's kind of

Zongjun · 11:11

being passed down from generations to generations. But, you know, every time it gets practiced by a different person, I, you know, it drifts, you know, like that. There's no way that you can actually clone the people, a trashy's mind onto another person, you know, and, and, and climate changes, soil changes like drifts, you know, even if it's the same cultivar, you know, new cultivars being created every year by these institutes and people's preference change, the fertilizer style change, like all these kind of changes led to it's it's it's really a very fluid concept almost that's be passed down by by all these

Zongjun · 11:54

people. So how exactly do you defined? Like how do you find a unchangeable anchor in this definition? I think it's impossible almost. Well, actually, so personally, what I care about and what I hope we promote in the Specialty Matcha Podcast, it is an exploration of objective truth on factors that control the flavor and the quality of matcha.

Zongjun · 12:18

So like an objective truth is that Uji matcha was grown in Uji. That's an objective truth. And it might taste different than a same cultivar grown in Ujitawara which is not that far away, or in Wazuka or in Ide Town or that same cultivar grown in Fukuoka.

Zongjun · 12:38

Right? Like we live in a very weird world where if you really care about objective truth and associating objective truth about a product and its flavor, you basically have to assume that everything is fake and mislabeled until proven otherwise.

Zongjun · 12:56

Like like in the beginning, beginning of my matcha journey when I started taking matcha seriously, I really wanted to understand Uji as a flavor. I wanted to be able to blind identify Uji as a flavor. I spent hundreds of dollars walking around Kyoto and Uji buying Uji matcha and I would ask, is this from Uji? I would get yes, yes, yes, yes, yes, right. That trust is now broken in me on my personal learning journey. I now have to assume that I'm being lied to, but the nature of that question, it's like they're answering a different question than I was asking, even though it's a very simple question. But I wasn't aware of their

Zongjun · 13:37

context of what Uji matcha has historically been and what the legal definition of Uji matcha was. I'm asking about origin. They're answering like it's like as if I'm asking is it like from Nike or is this a Lululemon or something? Like it's like it's like this brand idea not. But it was actually, you know, manufactured and actually sourced from a certain place, which was obviously my intention.

Ryan · 14:05

Where these trust chains get broken. They get broken at these very interesting cross cultural points and this is one of them. Yeah, it's, it's really, you know, yeah, it's almost really the wrong question to ask or a wrong kind of framework to try to understand a concept.

Zongjun · 14:28

But like also can can you call it wrong? Like this is what consumers are care about caring about. And this is industry that is so that it has its own culture, its own definition of things and doesn't necessarily have a good answer yet to this very new question or concept.

Zongjun · 14:51

Like how, how do how do we react to this reality? Because it's almost not a currency of trust, right? Like it's it's a trust. But at the level of like the judgement and context, it's, it is trust first you have to have understanding, trust, trust. It's a more base layer.

Ryan · 15:11

We don't even understand each other. Yeah, we don't even understand each other, that there's no like even there, there's no credibility to to begin with. Like people are talking over each other and it's not there there, there isn't really a definition being aligned yet.

Ryan · 15:27

Like this is as if, you know, starting a credibility, starting a relationship, you need to have a agreement. But these two groups, groups of people are signing two different agreements. So there's a very interesting artifact that comes out of this fact.

Ryan · 15:44

What we are talking about primarily are vendors who know their local market very well, whatever country that they're from, who are buying things and interacting with people in Japan and then going on to do some level of mislabeling with or without their own knowledge, probably without their own knowledge, and they just don't know.

Ryan · 16:02

And they're calling it like a single origin product when the idea of single origin in Japan is very, very, very different. But there's a huge secondary effect if you think through the implications of this. Typically because people who come to source are not very skeptical and are not willing to necessarily judge what people are being told about whether or not it's true. What like is behind the words that they're saying. It leads to this gigantic chaotic sea of misinformation that's floating out there and where people are selling Uji tea that is 100% Kagoshima claiming that it's single origin, talking about Ujitawara

Ryan · 16:41

and Uji processing history and it really is just a fantasy story that is completely nonexistent. And this exists for Chinese matcha too. The other day I was looking at a matcha, a new Chinese matcha company that was trying to do the single origin single cultivar concept and relating it back to Song Dynasty matcha or proto matcha that existed in China before it even made it to Japan. And they were saying that areas around Hangzhou and Zhejiang have actually always been growing matcha, it just wasn't very well known and they've had been doing this since the Song dynasty. I mean that is just objectively

Ryan · 17:17

false. They clearly met someone who told them this story, which is fantasy and entirely historically inaccurate. Modern matcha production in China is entirely contemporary. It is not a continuous practice, but they bought into these narratives.

Ryan · 17:34

And if you're not questioning what you do, the secondary implications of that is you have this sea of misinformation for people to sort through, and it leads to a lot of contradictory stories floating around out there. And it makes it really hard to form your own judgement because let's say you're coming into matcha with relatively little context. How do you know who to believe?

Zongjun · 17:56

Like you? That's a lot of sorting to do. Yeah. How do you learn? And then how do you learn on top of that when you can't even rely on what you perceive as an objective truth? Like this tea is Nishio matcha. This tea is Yame matcha.

Zongjun · 18:12

This tea is Shizuoka matcha, which we learned about until relatively recently. A lot of Shizuoka cha actually had a very large percentage of Kagoshima blended into it. Now, I don't think it can be labeled that way because they've changed the regulation rules, but even for things that you would think are safer are not. It's not an objective truth.

Ryan · 18:33

It just happens to be where that tea is being sold from, but it has nothing to do with where it was grown. Exactly. I mean, like, you know, tea blending is a very, very old industry and just not not just matcha, but you know, also other teas and also not just only Japan, but also, you know, Korea, China widely exists in all kinds of, you know, tea categories who are oolong cha, red tea or black tea. You know, it's and people, contemporary consumers are overfitting this single origin, single cultivar concept that's relocated from coffee and wine onto I guess, like if we want to be more solution oriented, like

Ryan · 19:14

who should adapt to who? Or should we change the definition of origin into something that's more adaptive to the reality of what tea is? Like if we are trying to find some like less changeable, less flexible anchors in the world of tea, let's use matcha as a example, a shiage factory.

Zongjun · 19:38

That's a place that people are usually moving their tea to, to do processing. And they usually have their own style and their own equipment that that that that that will be inputting into the the outcome of the and flavor profile of a certainty. That's almost like a more correct geo definition of a tea other than the terroir itself.

Zongjun · 20:03

Like the weather change every year. Like a different usage of fertilizers would really really change the profile of the tea. Like using a geolocation as a definition or as part of the definition for a certain flavor profile is almost wrong when it comes to Marsha Tashi.

Zongjun · 20:21

Doesn't tend to change that much and they have the pretty, you know, rigid lineage to pass down knowledge. So that's another anchor. Like I'm making some wild claims, but it's almost probably more accurate if we label something as single chashi or single shiage factory.

Ryan · 20:39

Could. Be actually more representative than you know, a single cultivar or a single origin. Yeah, no, I agree with that. And origin has all of these very complicated things. It's not just terroir, it's the blending style, it's the processing style, it's all the hands that touch the matcha that lead to it's very unique and interesting flavor characteristics.

Zongjun · 21:03

So that concept of single origin needs to be revised, linking it back. To but that's the question that people keep asking. Like people keep asking about single origin, single cultivar. Like it's really not representative.

Ryan · 21:17

No, yeah. Yeah, so. So it's, it's really a misalignment of questions and answers. And you know, like you are, you are almost trying to start a lawsuit to a different entity using a different agreement. Like like people are signing different contracts, like the language is is not aligned, the definitions are not aligned. Well, I guess that's part of creating trust though. It's creating that alignment and even making sure that you're talking about the same thing.

Ryan · 21:49

I mean, there's a lot of producers too that care a lot about the way their tea is marketed and to like, like are very specific. I want this to be very well known that this is actually from Uji grown tencha, for example, or we're proud that this is Wazuka tea.

Ryan · 22:04

I mean, we want it to be sold as such. So I mean, it is moving into a way where we're getting closer to objective truth about it. You know, you see all of these single cultivars, we trust that when we buy things that people aren't mislabeling them. But it's these really soft spots that become a real, real problem spot.

Ryan · 22:23

But there's a lot others in the industry too. I mean, a huge one is the people who have the final control over the matcha itself. When you sell matcha as a brand, you have to trust that the person preparing it is going to do right by your brand and make it, you know, in a quality way. Matcha is super easy to mess up.

Ryan · 22:45

It can be comfy. You can have no foam. You can use too hot water. The water quality can be low. And there's a really interesting story here is that James Freeman, the founder of Blue Bottle, back when when Blue Bottle was very cool, I think it was around 2015, 2016, had announced that they were walking away from all of their wholesale, which represented 20% of their revenue.

Ryan · 23:09

So in other words, Blue Bottle would supply their coffee to cafes, cafes would brew it and advertise that they have Blue Bottle coffee, which represented very non negligible portion of their business. Very similar to a lot of the B2B matcha companies that exist that are brand owners.

Ryan · 23:25

But these brand owners also have to trust. Are they going to represent my matcha well, my brand well? That currency of trust also really matters. And we've seen Jev from No Bad Matcha drop accounts, very probably good profitable B to B cafe accounts who are not preparing the matcha well. We're not doing anyone justice, not doing the farmers justice, not doing the Japanese matcha justice or you know, his brand justice and he dropped them. That's like another huge thread of currency of trust in this industry, just because it's so easy to mess up. Oh, yeah.

Zongjun · 24:01

I mean, it's just like coffee, right? It's not a finished product. And they are being skeptical, I would say rightfully so because, you know, like the ways of prepping matcha is just, you know, so different than, you know, what's traditionally being done in Japan nowadays.

Zongjun · 24:19

How in the world and they like and that's really just one end of or one segment of this long, long currency of trust. Very interestingly, we learned recently that a lot of the farmers, everyone knows that producing tencha is very lucrative, but a lot of farmers are in Japan are still very reluctantly switching to making tencha because even making tencha is not a finished product.

Zongjun · 24:46

Tencha gets blend into all of these larger batches all the time. It's not representative to their own definition or their own ways of making tea. Like for them, you know, making sencha, making wakoucha is actually more representative because they have the capability to create a nearly finished product.

Zongjun · 25:09

But that's not the case for tencha. It's a. It's a case for creative expression. Yeah, like tencha is really a ingredient in this long chain of product manufacturing. And they have no control of the outcome either, which is very interesting. And then, you know, like, and for these tea makers, for potential manufacturers, sometimes they're not even, they don't control also like sometimes they control the fresh leaf supply either.

Zongjun · 25:39

They end up bidding aracha from auctions and you know, turn shiage and turn that into actual tencha. So they're not the origins either. And then you go to the farmers. The farmers really sometimes don't know where their teas end up going to.

Ryan · 25:52

There's a very, very long chain of of currency of trust, and everyone on the chain is not really representative of the end. Of Hong Kong, yeah, that's interesting really is a collective mindset. You do see like regulatory pseudo regulatory agencies.

Ryan · 26:10

I know that the Kyoto Tea Cooperative Association puts out a very large set of guidelines. You can actually look it up on their website. It's all in Japanese. But there's a ton of documents over explaining the recommended processing methodologies for creating Uji matcha.

Ryan · 26:28

So there are like guidelines that people can follow. You know, I don't know how well they're enforced. I think they're like literally like educational resources for for farmers or for new farmers probably to help them switch over to tencha production too, that if they're interested in doing that. But the way the system is set up is really weird, right. Because, you know, the currency of trust gets concentrated in certain places because so many people cannot access large parts of this value chain.

Zongjun · 26:56

Yeah. And this is like even more problematic, right? Like it's a guideline. It's not even like a, a well defined or a a legalized term, right? Like you're starting a lawsuit without even a law. How do you even, like, how do you even, you know, how do you even trust the currency of trust itself? Like, does that actually exist?

Ryan · 27:18

Yeah, well, it's interesting because there's a lot of actors too. For our listeners that don't know, there's something called, I think it's called Mogacha. Excuse me if I mispronounce that. And it's basically filler matcha.

Ryan · 27:30

And what they do is they basically use sencha processing equipment, but they turn off the rolling function when you get something that sort of resembles tencha. And apparently it really doesn't taste like much and it's just as remarkably good filler where you can use it, especially when you blend and like maybe you input in about 10% and then you layer some stuff on top of it. And so, you know, there's a lot of that type of stuff going on in the industry too, like, and not to mention, even things like chlorophyll, which in some countries doesn't even need to be labeled because it is a naturally occurring substance and tea by some countries

Zongjun · 28:05

labeling laws. If you'd go deep enough on the Japanese Internet, there are entire companies that are dedicated to adding chlorophyll to matcha, not the natural way by shading, might I? They're also companies that very specifically specify in the filler matcha and that, you know, that gets lost along the chain, which makes it really hard to trace. And I think the biggest problem with traceability and building any sense of currency of trust all the way from a plant in the dirt, in the ground, all the way through your cup is that so many people are barred from very large parts of the value chain. And it has to be funneled

Zongjun · 28:44

through many, many, many different places. And I can, I'm just going to give you one example of like the supply chain. Like there's, there's a company that sells a lot of tea to cafes. We know that they're buying from someone in Japan.

Zongjun · 28:59

We know that that person in Japan is buying from a blending house in Japan. That blending house is probably purchasing it at auction, which and you know, depending on the size of that blending house, they may or may not be sending it out for refining, for shiage refining and depending on their milling capabilities, they may or may not be sending it out for milling. So you add a lot of people within the supply chain going all the way back, but the people who are allowed to purchase set auction are incredibly limited.

Zongjun · 29:31

It depends on the prefecture. Kagoshima, very, very, very few people. Apparently Uji, Wazuka is a little more open. And then it just goes from middleman to middleman to middleman to middleman before it gets to the consumer. And these middlemen add value for some reason or another. Maybe it's because they have relationships. Maybe it's because they really know how to import, export things.

Zongjun · 29:53

Maybe they have a very large resilient supply base that they can pull from, give people a lot of optionality, but it really makes the chain of trust hard to trace back if you care about objective truths about the product.

Zongjun · 30:10

Yeah, almost impossible I would say. And, and I think the outcome of that, of this practice is that if you are actually very serious about matcha, you are going to get a very unreliable product. Yeah. Like the the flavor like would really change depending on whichever factor that decided to make a difference on that year.

Zongjun · 30:35

And you have no idea what happened to this tea. But you can cannot form a educated or well informed association with these factors based on your own experience, which is very painful as a consumer. I would say if you are serious about matcha, like if you end up dumping it into milk or oat milk, you know, it's probably going to taste about the same year by year.

Zongjun · 30:57

But if you want to actually dive deep into get to know your product and form a association with whatever factors that you care about, whether or not it's cultivar, whether or not it's a it's a brand or whether or not it's a geographic region, it's almost impossible to form a accurate association of things that you like to a factor that you care about.

Zongjun · 31:22

And that's really a shame because it would lead to such a rich and interesting world, just how you have. Like totally agree. I could say like a famous Baker who makes like the best baguettes in Paris. They're talking about where their wheat is from, the amount of the humidity of the day and how they change, you know, the water ratio or how much salt that they add.

Zongjun · 31:44

Or you hear about like noodle companies, like ramen companies are totally changed their recipe every day just based on the weather and the way that like gluten forms in the noodles. Like these are some really sophisticated craft, goes on behind the scenes to making great products and all of that just gets like vanishes. Obscured away.

Zongjun · 32:05

So like this is this is also where you know, this chain of trust and this currency of trust has negative consequences because you just trust that someone has done it well and you aren't serious enough to say how do you know that?

Zongjun · 32:20

Or is this really what you mean or why was it like this? You can't ask those questions here, especially in Japan where it's a much more implicit culture and it is all trust based the. Yeah, I'm particularly cynical today because my currency of trust has just been broken.

Ryan · 32:39

Well, let's hide this matcha as sitting in front of me. Let's talk about that. This is a really, this is a really interesting point. What happens when the chain of trust is broken? Let's talk about it literally in the most intimate way. Consuming matcha?

Zongjun · 32:54

As a consumer, I will stop buying this matcha in the future, which I'm not going to name it, but you know, I really, this is almost like my gateway matcha. Like I really, really, really loved this matcha a year ago when I first tried it and just this phenomenal, phenomenal olive oil, spice, spicy notes that, that that was so impressive at the time that, you know, I, I was all into it and I'm sitting right in front of this matcha a year later. This is a different tea.

Zongjun · 33:26

Different batch, but it's a different tea. It's a different tea. This is like this is not that and I we paid a pretty significant amount. We paid double. We paid double the amount that we did. It's a $90.00 can for 20 grams. Yeah, and we paid real currency, Ryan, to, to, to back this trust.

Zongjun · 33:49

And this trust has been broken. It's a different tea. And I'm only buying this tea because of really because of this label actually, you know, I I have no idea what's in this tea. I have no idea how this tea was processed. I have no idea, you know what went wrong with this tea. Like it's all rooted upon this poetic name that basically 0 information about what this tea actually is.

Ryan · 34:16

So as a broken hearted consumer, have no I, I cannot even like, I don't even know who to play. Yeah, that's interesting. Like what? What Like it's like the ingredient or the tashi or like the milling house or different Shiage factory? Did it get forgotten on a truck somewhere and sit in the hot sun?

Zongjun · 34:40

Exactly this. This is like really frustrating and painful. Yeah. Well, I mean, that's a huge currency of trust. And arguably the most important currency of trust historically is the relationship between the consumer and these traditionally blended products. In a former episode, we highly recommend everyone listening to our poetic matcha names.

Zongjun · 35:02

Harmful. You know, these traditional companies don't give you any detail. You don't know the cultivar, you don't know where it was from. It's some blend that's supposed to taste the same every year, and the quality is supposed to live up to its reputation.

Zongjun · 35:14

And with the matcha shortage, now we see price increases. This tea is literally doubled in price since one year ago. Even we were here six months ago and it increased another, I think ¥30,000 from the last time that we saw the price for it.

Zongjun · 35:30

And I've heard rumors that it's going to go up another. So it would have effectively tripled within the span of about 18 months. Less than 18 months actually, which is insane. When I'm not paying for that right? But that's the thing, when the currency of trust is broken, especially when matcha prices are getting higher and higher and higher, the only way that this works in anyone's favor is if consumers have lower expectations and are like literally willing to spend double the price. And it just like didn't translate. So all of the best, highest end matcha, especially for Uji matcha that we've ever tasted

Zongjun · 36:07

has tasted better as koicha than as usucha. And this is a very koicha grade matcha. This one tasted better as usucha than it did koicha. Very disappointing. We're also like, we're not totally like random people tasting matcha.

Ryan · 36:23

In our prior career. For me, it was for eight years. For Sam, it was five years. We worked at the intersection of AI, flavor and sensory analysis or the analysis of taste. So I've literally done like 10s of thousands of flavor analysis reviews on a wide variety of different products.

Ryan · 36:41

So sensory is not something that's very new to us when we took a lot of notes and this tea and the same blend from a year earlier, it's a different tea. I would say I took a lot of notes of the same blend a year ago. Not a lot of notes for this one sitting in front.

Zongjun · 36:58

Of me. That's funny. The lack of complexity is real, and the lack of character is real. Yeah, it, I mean, it's, it's shocking. It's from a very well known, reputable brand. It's a poetic name that's particularly popular and prized and revered and you know, is it?

Zongjun · 37:17

You know, my hunch is actually that these types of need about 6 months of rest to blow off the green note when you pick T and there's something there's a bunch of compounds that have are associated with green flavors like cucumber, like grassiness, etcetera. And historically you age it for about 6 months underground in a chatsubo and you open it up on the Japanese tea ceremony. Holiday will be Robiraki in November and after that it's had some time to mature.

Zongjun · 37:45

You have some degradation of catechins and you have preservation of amino acids. So you reduce the bitterness and astringency and you make it still retains its sweet umami character when you have some rebalance. And we are in September right now.

Zongjun · 38:00

So we're still two months away from the Robiraki holiday. And this is probably from this year. And maybe there's just so much pressure to get these products out that they're releasing them a little bit before that they're ready, but we don't know. We don't know.

Ryan · 38:14

All could be overheating issues. So we're relying on someone's judgement who is has a brand promise. Every poetically named product is a brand promise, especially from a large blend house and doesn't taste the same. Now, is this the end of the world?

Ryan · 38:29

No, like I mean we're sitting here like in a relatively we have nothing to complain about, right? I don't know 90 bucks on account of matcha. I felt like the end of war for me for a while. 5 minutes this. Really was your your gateway matcha, your aha moment.

Zongjun · 38:47

Yeah, my aha moment. We don't know where that flavor came from or how you can find it again. And I mean, this is my criticism of the industry and this currency of trust. The more context and knowledge that you have learning about matcha, the more you realize that you everything has. You have to assume that everything is fake until it's verified.

Zongjun · 39:06

And it's nearly impossible to build preferences to understand where flavors are coming from because you can't get access to the reference samples or, and no one tells you, you know how these flavors are created. If we knew that this year, there's way more samidori in this blend than there was last year, right? Maybe that explains some of the variation. But in an industry where everything is masterfully crafted and always presented as perfect, no one selling intentionally flawed tea, then there is no way to learn. And by the way, one person's flaws might be someone else's. Oh yeah, only possible.

Ryan · 39:44

Like these flaws in the idea of quality is actually a relatively socially constructed arbitrary concepts. You know, maybe these bitter floral things might just turn into this crazy ridiculous flavor profile that's incredibly fragrant when the moment it hits oat milk.

Zongjun · 40:03

Problem is, is that the old Japanese man who do the sorting and the grating say defect, defect, defect. I'm going to use this and blend out this flavor. Aren't thinking about that. Potential outcome, and I mean, this is a great example of a lack of diversity in the creation of these new products. You have a lack of imagination, you have a lack of world experience, you have a lack of curiosity, you have a lack of understanding of other people's preferences. Now who are we to judge a hot several 100 year old industry just the way that it is here?

Ryan · 40:33

But it is a real missed opportunity, especially as the international consumer base of matcha is is growing. I totally agree. And I think that's a very difficult problem to solve because of the reality of how segmentized this whole chain is for matcha.

Zongjun · 40:51

Like the the manufacturer, the farmers and the brands, they are all being separate away from each other and from the end consumer by so many different layers of middleman and making a very healthy consumer feedback loop quite impossible.

Zongjun · 41:08

So I guess this is not very a solution oriented complaint, but it is the reality that we are facing today is that as a consumer you almost have to adapt yourself into the current system because it's really difficult to make any changes at the moment for Matcha. And you know, the best way to navigate in a world where the primary currency of bringing matcha to market is trust, not money, because there's overwhelming demand. These farmers have no problem selling their products to these middle men have no problem selling their products. The way you build up this trust and the mental model to judge of what other people are saying is

Ryan · 41:49

to arm yourself with this much context, text and as much knowledge as possible, right? To have the framework. When you say this is Uji matcha, does that mean it's from Uji grown tencha, right? Anyone who has that, right?

Zongjun · 42:03

That's a great question. And then people, a lot of people are actually very honest. They say, Oh no, this is from blank. OK, great. You know, in fact, I would love to sell it as blank and not as Uji Matcha. Yeah, or just lower your expectation. Yeah, heartbroken moment will be less painful. I mean, I mean, let's talk about the objective truths for like people who work in this industry and are trying to bring stuff to market.

Ryan · 42:29

It's about asking the right questions and about understanding what people mean. And the only way you can build trust in your own judgement to the conclusion that you come to is to understand the context of other people.

Zongjun · 42:42

Be transparent to this whole mess thing is one way of building the trust as well. Just show what you don't know about it and actually educate the consumer that how complicated this whole situation is. I think, you know, at least get some alignment with someone in this very, very long chain of relationships.

Ryan · 43:03

Yeah, and just being more straightforward and you know, that's what we intend to do. And I'll tell a story to to conclude this episode. We're sourcing a bunch of tencha at the moment and we're making our first real like large scale, large issues scale for still very tiny player potential purchases at the moment. And some farmers or some producers are willing to tell us a whole lot more than others.

Ryan · 43:25

We even have like the exact fertilizer recipe for some of our sources. And in others we know next to nothing. And you know, as we like think about like labeling these and putting up a website, we know more about some of the products that we source than others trust them. We ask for chemical pesticide residue reports. Like there's all this type of thing that we trust. But like if we want to know the exact number of days shaded or the blend composition, cultivar blend composition or the fertilizing practices or the shading methods or processing methods, we just don't know.

Ryan · 44:01

So what do we say? And then you anticipate these things like consumers asking, oh wow, you had all this great detail about this one product, why don't you have it for this other? And the reality is well. We don't know. We don't know, and we don't know the person that we bought it from well enough to ask it.

Ryan · 44:19

And in fact we were really just lucky to get this at all. And we don't really have the cultural or social capital to go back and ask what are sometimes perceived as relatively intrusive questions. People in this industry are not used to being asked all of this detail.

Zongjun · 44:37

It almost sounds like we're spies, like with my list of questions Like can you please provide the fertilizer, the processing, processing style, shading style, number of days, shading, exactly where the tea was from? OK, you Matcha agent, I'm a lawful farmer.

Zongjun · 44:53

But I mean, sometimes the truth is that it's just like we don't have the cultural or political capital, yeah, social capital to extract this information without potentially damaging the relationship. Yeah, it's quite, quite difficult. And also like it's quite difficult as a consumer because you learn some information from one specific T, but that information is not necessarily transferable to other T's because you just don't get those parameters from the other teas. You learned about this fertilizer composition from this specific tea, but the other tea they don't provide you with the with the same information.

Ryan · 45:31

Like how do you do like comparative? Tasting. How do you know what's causing what? It's extremely difficult. Very difficult. And the reality is you can, and this is a awkward way of putting it, but the only way that you can do that is if you work with rich farmers, specifically farmers that are wealthy enough and successful enough to invest in their own over control over their own processing.

Zongjun · 45:59

As Sam said, you don't have tencha is not really a finished product and very few cases does a farmer oversee it all the way from a plant that's in the dirt in the ground all the way through a can of matcha. And the ones that do have gotten very famous, They don't take any clients.

Ryan · 46:20

They're the only ones that really can give you that information because it might be perceived as intrusive or impolite at anyone on this value chain, or even be perceived as breaking trust in this environment. Am I questioning the judgement of my chashi?

Zongjun · 46:38

Am I questioning the judgement of my buyer? Am I questioning the judgement of my farmer? Am I questioning the judgement of the person at the Co-op processing facility? When we ask this type of questions, there's no culture of wondering what goes wrong and why. And like asking this batch tastes a little weird. Did you like accidentally oversteam like? Yeah, it is like ultimately there's no entity or entity with leverage that can hold them accountable. There's no regulation or regulators and there's no like a consumer union that can, you know, hold them, hold them accountable.

Ryan · 47:18

Like it doesn't exist. There is. There isn't even a law or like a well defined term sheet that we can point our fingers at. Like this is or is not tencha. This is can or cannot be labeled this way. It's all these weird trains of trust.

Zongjun · 47:33

And these trusts are sometimes positive, meaning I trust you and you trust me, and we can do business together. You know, hopefully we understand each other's contexts so we're not talking over each other, so I'm not misrepresenting this thing and that you're really answering the questions that I'm asking, like using the Uji cha, for example.

Zongjun · 47:50

But trust can also be a blinder. There's actually I think it's a famous case. I think it was a Korean pilot. Excuse me if I misremember, but there was a nasty aviation incident is a couple decades ago where there is an older pilot and the copilot was much younger and I believe they were Korean.

Zongjun · 48:11

And within Korean culture and Korean language, it's relatively unacceptable to question the judgement of an older pilot or of anyone who's older than you. And like basically the younger pilot realized something was going wrong.

Zongjun · 48:24

They weren't able to effectively communicate it to their quote UN quote authority on time, especially within their native language. And they, I think the plane ended up crashing or something. But I think now all commercial aviation international pilots are required to speak English because in English we don't have all of these weird formality rules. And Japan definitely has like, if you like, know anything about learning the Japanese languages, all these rules about formality, about what you call whom and which honorific titles. Yeah, it's built in into the language, the hierarchy, yeah. And that very much is true with

Zongjun · 49:02

this chain of trust too, because being perceived as not trusting someone is probably so socially unacceptable that who knows? Like how these slip UPS happen, whether or not they're processing defects, whether or not they're mistakes and creating the sample for a pesticide residue report, whether or not they're what we label certain things as that get lost among this chain of trust also so has some negative consequences in an implicit culture and society.

Ryan · 49:36

It's an interesting thing to think. About Yeah, it's the ultimate theater of cultural collision that we are seeing right now. Yeah, pretty interesting. But you know, we will see how it goes in the future. But one thing that is certain that is that the consumers are gaining more leverage day by day in the future.

Zongjun · 49:56

The concept of all these things that we are care, we care about is slowly being cascade down back to Japan. It it might convert at some point throughout the process, we have to deal with this mess for the time being. Yeah, well, maybe calling it a mess is a little bit unfair.

Ryan · 50:13

I mean, it's complexities that we are just beginning to understand. That's true. To our outsider perspective, collision is like a mess. Collision is a mess. Collision is a mess. Collision is mess. Collision is absolutely.

Zongjun · 50:25

A mess. Current situation shows a lot of these factors, especially his knowledge about matcha becomes more ubiquitous. But 10-15 years ago, Pete, the conversation was not about cultivars. The idea of asking that question like just wasn't fair.

Ryan · 50:40

Same thing with like where is this matcha from? Well, it's Uji cha, these things. No one cared about that. And now people do care about that. So it's, you know, it's all new and it shows some of the existing differences, I guess, or I don't want to call them cracks, but it shows some of the the real differences between these different types of approaches and the way we build up trust and the, the human messiness that comes from that.

Zongjun · 51:05

But I think actually this proliferation of knowledge is going to do really good things because, you know, it's not only a currency of trust, but there's also these undercurrents of power and who holds the power, both hard and soft.

Ryan · 51:18

I mean, ultimately now the buying power has shifted from a largely domestic market to a largely foreign market, right? That is a form of power. And that changes how we trust people and the questions that we asked and the axes on which we build trust, in which consumers build trust, thinking that they're learning about the origin of a place, you know, all of or whether or not we can label these things are telling the correct stories about historical accuracy.

Zongjun · 51:50

Very true. The consumers outside of Japan is now the new daimyos. Knowledge is power. Knowledge and you know, like buying power is power. It's ultimately what what influence, you know, tea has been manufactured and been made in Japan for hundreds of years.

Ryan · 52:09

Is this a new form of neo colonialism or is this something else? I would say this was always in a semi feudalistic system in which you had incredibly concentrated wealthy powerful people in the Edo period and the barons and oil tycoons and railroad tycoons of the Meiji period with tons of buying power. And then you had these upper middle class Japanese housewives that learned tea ceremony as part of the quote good wives and wise mothers policy in Japan, which created many generations of new tea ceremony practitioners. Right now it's just changing again, right? These who holds this type of purchasing power? Yeah, it's really still very

Zongjun · 52:50

much a hierarchy system that we're seeing right now. The structure hasn't been changed. Just because it's dislocated from outside of Japan, Yeah. Is it fair that someone says and comes in and criticizes what we're saying? It's like, why are we disrupting the way things have always been done in Japan?

Ryan · 53:08

These are traditions. These traditions should stay traditional within Japan. Like we don't want all these outside influences in the space for disrupting the purity and tranquility and respects and all waka say, Jakku, you know, if you know if you know of this industry.

Zongjun · 53:26

But it has already been disrupted. But it has already been disrupted many, many times throughout Different, you know, government governor agencies, different shogunates from from different daimyos throughout the Japanese history. Actually, the idea of wabicha has already been disrupted the moment after Sen no Rikyu was ordered to commit honor honorable suicide.

Ryan · 53:50

Wow, some would say it was a pseudo form of martyrdom and help the wabi wabi cha wabi aesthetic live on, potentially even stronger. Yeah, but I don't know, the idea of this humbleness has, you know, like really never been true. It's always about money and label and hierarchy and power. When you really study these histories, that'd be an interesting episode to do, is to look at the undercurrents of the currency of power.

Zongjun · 54:20

This can be a series currency of trust. We can do currency of power. It's could be an interesting one. Yeah, we might need some guest speakers to to learn more from this. Very interesting culture dynamic. Yeah, I'd love to do an episode just like mapping the Matcha supply chain, like really, really deep dive and look at all of the different avenues that Matcha makes it to market, which are actually just different business models.

Ryan · 54:45

Let's be honest here, like Matcha is a business too. It's that often gets forgotten. Even the tea ceremony schools are a business. It's a company. The currency of money still definitely matters, but currency of trust in the traditional industry like this really, really holds a lot of power, which is worth investigating and talking about. All right, thanks so much for listening. And if you enjoyed this, please consider sharing it with friend and we'll see you on the next one. Thanks.

Zongjun · 55:15

See you in the future.