Why That Matcha Costs $12 (and Why We Keep Buying It)
- Farielle
- Jun 9
- 5 min read
A $12 matcha. That’s where we’ll begin.
In the words of my brother, "behind that perfect swirl of oat milk and chlorophyll green is the business of desire."
The Business of Desire
Pricing Strategy
Is Matcha even expensive? The ceremonial-grade powder averages $1–$2 per serving wholesale. Add $0.30 worth of oat milk and some overhead, and you’re still nowhere near double digits.
Given matcha’s unique flavor and health benefits, paired with the right cup, in the right setting, they can retail for $12 and still sell out.
This is the difference between value and valuation. Value is the intrinsic benefit or utility a product provides. Valuation is the price the market assigns based on perception, demand and positioning. And in consumer goods, especially in the luxury segment, the two rarely match and that gap is where brands build margin. Specialty matcha tea cafes, like Matcha Metropolis see net profits between 10–20% and up to 15% in premium urban locations.
When you’re drinking matcha, you consume the story around it: small-batch, ceremonial grade, hand-whisked, sourced from a single region in Japan. The higher the perceived quality, the higher the price elasticity. Because once a product feels premium, it becomes exempt from rational pricing logic.
Trust me, even I am guilty of buying a $12 matcha, posting it and justifying the price to myself more times than I’d like to admit .
Gen Z Emotional Psychology
According to McKinsey’s 2025 Future of Wellness report and Dentsu’s study on Gen Z wellness trends, wellness is no longer an occasional indulgence. It has become a daily, personalized practice. Post-pandemic stress and lifestyle pressures, highlighted in the Dentsu report have shifted what was once a midlife concern into a daily choice for younger consumers.
In the US alone, the wellness market exceeds $500 billion, growing at 4–5% annually, with 84% of consumers calling it a “top” or “important” priority. Gen Z and Millennials make up just 36% of adults yet account for 41% of all wellness spending. Nearly 30% say they are prioritizing wellness “a lot more” than they were a year ago, driven in part by higher reported stress levels.
If wellness is wealth, then matcha is a liquid asset. Unlike coffee, which signals hustle, matcha signals mindfulness. As one of my friends at Harvard Business School put it: “Low caffeine, high antioxidants, no sugar crash...it’s the drink of ‘I take care of myself.’”
Scientific support is growing too. Matcha’s combination of caffeine and L-theanine has been shown to promote calm focus, and it’s rich in antioxidants like EGCG.
From Jenki’s CBD Matcha to Iced Rose and Collagen Matcha Lattes, they look good and come with health benefits. In McKinsey’s research, nearly two-thirds of Gen Z & Millennials report buying functional-nutrition products in the past year, with top desired benefits including energy (43%), gut health (40%), and cognition (19%).... the wellness trifecta matcha provides.
Brand Strategy
Successful matcha brands know they are also in an identity business. They sell products that reflect how people see themselves or want to be seen.
Everything from font choice to store design is optimized to attract the right customer - those who view consumption as a form of self-expression, are attuned to trends, and are willing to invest in daily rituals that reinforce their personal brand. And when your product is part of someone’s routine, you've created recurring revenue disguised as habit.
A case in point: Cha Cha Matcha
Founded in 2016, Cha Cha Matcha quickly built a cult following by merging wellness culture with playful, Instagram-ready aesthetics. Their cafes blend millennial pink and tropical green with retro typography, instantly recognizable to their core audience. According to their website, Cha Cha aims for more than just matcha "It’s a culture - one built on good energy, unbeatable quality, and uncommonly good vibes.”
The brand’s approach is as much about experience design as it is about the drink. Every location is curated to feel like a destination, whether it’s for a quick caffeine fix or a social catch-up. CEO Jay Gujjar emphasizes this intentionality: “Until we own the experience… we want to own it.” That means controlling every touchpoint from sourcing ceremonial-grade matcha to serving it via traditional whisking to ensure the brand story stays consistent.
Cultural Relevance
That $12 includes design, ambiance, and the social currency of holding the right cup. It’s more a “personal brand accessory.” The aesthetic sets an anchor. If a drink looks like $12, that’s what people expect and accept. A TikTokable lifestyle detail that just happens to be edible.
A noteworthy example is Gstaad guy, a tiktoker who turned viral from his parodies of the ultra wealthy. He has made made videos ranking the best Matcha spots in London. He even describes a recurring "matcha wifey" archetype in his satire which gently mocks and exaggerates the lifestyle of a certain kind of wellness obsessed women in wealthy social circles. My friends tell me his recommendations work because he is speaking from his real life experiences, growing up in that environment. It feels more like a tip rather than a paid advertisement. This, along with the fact that his commentaries are both entertaining and seem trustworthy, might explain why individuals such as the Princess of Greece, Elon Musk's mother, and Central Cee are among his followers.
Another example of 'its the experience, not just the ingredients' are Erewhon’s $19-$25 smoothies, like Kourtney’s Matcha Latte. Brands like Blank Street, Cafe Kitsune, Jenki and Koub know the cup is made for being seen not just for sipping.
This drives pricing power. Aesthetic turns commodity into luxury, allowing brands to raise prices without resistance.
How matcha has become a ritual
Once matcha becomes your “thing,” the value shifts. Now it is a ritual. Brands create stickiness by embedding themselves in daily identity. You start justifying the price as self-care, productivity, alignment with your values. That emotional rationalization is priceless (and very profitable). Think Erewhon regulars lining up daily for their pricey smoothies, or influencers building entire routines around their matcha moment.
What is the financial strategy? In Direct to Consumer (DTC) economics, high-frequency purchases (habitual products) reduce customer acquisition cost (CAC) over time and increase lifetime value (LTV). The more often a customer returns, the more profit is extracted per dollar spent acquiring them.
Just look at @mobinapeiman, her drink becomes a prop as part of her “morning diaries” content. It’s part of the aesthetic and honestly, I love it!
Final sip
Desire can be engineered and priced.
No one needs a $12 matcha. But with the right scarcity, aesthetic, and storytelling…desire is designed. "Branded collabs" and all these slogans "Limited drops of flavors", “Only at this location”....The product becomes a status object and pricing becomes a tool to elevate it. When something costs more, we pay more attention. We justify it.
This is a business model for those who know how to capture a specific consumer behavior.
One that turns low cost ingredients into high margins, using perception as leverage and emotion as fuel.
It’s proof that in today’s market, value isn’t always in the product.
It’s in the positioning. The packaging. The experience. The story that makes something feel essential and exceptional.
And if a cup of matcha can do all that, imagine what else can be priced, positioned, and experienced differently.
Welcome to Priced to Move.
References:
https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/future-of-wellness-trends#/
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