Starbucks Turned This 20-12 months-Outdated Product Into A $1 Billion Enterprise By Taking a Web page Out of Its Rivals’ Books
Coffee chain challenger brands have won market share by going all in on personalization. Starbucks is clearly taking notes.
Starbucks is making headway towards its goal to create an afternoon rush hour. Better snacks and Gen-Z friendly refreshers are big reasons why, but so is the company’s effort to lean into a product that’s been on its menu for 20 years—and is driving growth for its competitors.
Starbucks first introduced matcha to its menu in 2006, launching a drink called the “Green Tea Latte.” The earthy green powder is now officially a more than $1 billion category for the Seattle-based company, chief financial officer Cathy Smith said during yesterday’s Q4 2026 earnings call.
Matcha consumption has exploded over the past few
Matcha consumption has exploded over the past few years. Retail sales of the powder grew by 86 percent from 2022 to 2025, according to data from market research firm Nielsen IQ. Its popularity has both led coffeehouses to expand their matcha offerings and inspired entrepreneurs to launch new products that incorporate it, such as matcha liqueur Yoshi.
Over the last three years, Starbucks tripled the number of matcha drinks it sells. The coffee chain’s menu now includes a classic line with iced, hot, and frappuccino versions; a specialty line with seasonal and fruity flavors; and a protein-packed line.
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In January 2025, Starbucks released an unsweetened matcha powder in response to customer feedback. The move resulted in a nearly 40 percent lift in matcha sales compared to the previous year, CEO Brian Niccol said during the company’s Q2 2025 earnings call.
Starbucks reported early this year that its overall
Starbucks reported early this year that its overall tea category revenue was up more than 70 percent across company-operated U.S. coffeehouses from fiscal year 2021 to fiscal year 2025. Smith said to investors yesterday that matcha is still “growing tremendously year-over-year.”
Fast-growing coffee chain challengers 7 Brew, Dutch Bros, Blank Street, Bluestone Lane, and Biggby Coffee have won market share by prioritizing convenience and personalization over the “third place” ethos at the center of Niccol’s turnaround plan, Inc. previously reported.
The growth of Starbucks’ matcha business, however, shows that the coffee giant is paying attention to that playbook—and using it to expand.
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Source: www.inc.com
