Why fast-growing tea brand Naoki Matcha is looking to open stores
Founded by Chiam Sing Chuen and Samuel Loo in 2015, Naoki Matcha is a Singapore-based brand that specialises in selling matcha tea online. The brand has built a reputation for sourcing high-quality products from various tea regions in Japan, and caters to a growing global audience in Singapore, the US and UK. “Over the years, we’ve built close relationships with our network of Japanese tea estates, processing factories and tea masters. It wasn’t easy but now we get access to high-qua
gh-quality matcha thanks to these relationships,” Loo told Inside Retail.
Matcha is a type of Japanese tea that is grown under shade for up to eight weeks before it is harvested. After the leaves are harvested, they are steamed, dried and cut up into tiny pieces, then ground into a very fine powder.
Unlike green tea, which is brewed with tea bags or loose leaves, with matcha, hot water is poured directly onto the powder, mixed and consumed whole.
Just like with specialty coffee, Naoki Matcha places a strong emphasis on the origins, flavours and particular blends of its products, and the knowledge that the brand has accumulated over the years allows it to offer many types of specialty matcha at reasonable prices.
Appealing to matcha newbies
Naoki Matcha has experienced a meteoric rise since the founders first started selling their products on Amazon.com in 2016. Initially launching in the US, before expanding to the UK and Singapore, the brand’s first shipment of matcha was just 10 kilograms. Now, it sells a few tonnes of matcha each year in its three main markets.
In that time, Naoki Matcha’s revenue has nearly doubled each year, and more than 50 per cent of its business revenue comes from the US. In 2021, it entered the UK market, and this year, it aims to expand into B2B sales and explore product development.
Its growth has been driven in part by the increased popularity of matcha tea over the last five years. Chiam Sing Chuen said that many consumers think of matcha as a superfood because it is rich in antioxidants, even more so than regular green tea. By growing matcha tea under the shade, the chemical properties of the leaves actually change.
“As matcha becomes more and more popular, we notice that our customers also become more sophisticated. They are looking for a higher quality matcha experience,” Chuen said.
One difficulty that the brand has faced is that simply offering top-grade matcha is not enough to satisfy every customer. For example, matcha with a rich umami profile is highly sought after in traditional Japanese tea circles. However, other people who are new to matcha may not be quite ready for such intense flavours. They prefer something milder with more balance.
In order to better serve customers, the duo have had to study how matcha is produced and how the taste profiles are derived.
“Essentially, when you vary the composition of the blend, you will form different matcha flavour profiles, this is what tea masters do in Japan. They blend different types of tea to balance the tastes and achieve certain flavours,” Chuen explained.
The main blends
The brand has three main blends that account for the bulk of its sales. The Superior Blend was the company’s first product, and its ingredients come from Uji, which is a city in Kyoto, Japan.
“You will frequently hear Uji when people talk about matcha, as Uji is the original place where matcha production started in the 12th century. The Superior Blend is designed to be a beginner friendly variety, and is good for match lattes,” Chuen noted.
The brand also offers the Fragrant Yame Blend, which the duo recommend for people who already enjoy green tea, but are looking to try matcha tea. It has an intense green colour, and a nutty aroma.
Lastly, there’s the Chiran Harvest Matcha, which is suited to enthusiasts who are looking for something unique.
“It’s made in Kagoshima, which is a region at the southernmost tip of Japan. The soil is very rich due to a number of active volcanoes in the area. The tea comes from a very small plot. So, very small quantities are available each year,” Loo stated.
Physical stores are next
Loo is clear-eyed about the future of the brand, and although the company has made great strides by selling its products online, the duo recognise that having physical stores is the holy grail.
“Digital and e-commerce are always good for kick-starting a brand, but we are not arrogant enough to say that physical stores don’t matter. For our product, having a physical store is an extremely important element to ensure our customers get to experience the product,” he said.
Opening up physical stores is the next stage of expansion. The brand is still exploring opportunities, even thinking about partnerships and collaborations with other organisations to bring its offerings to customers in Singapore.
“The biggest challenge for us is to get people to have a taste of our products. So it’s all about giving them a sample of our products in a very cost-effective way. Matcha tea is complicated to work with. You need the right equipment, water temperatures, and so on,” he explained.
Ultimately, Loo said that the brand still sees the US as its key market with a lot of room to grow. In Singapore, it’s going to be all about strengthening its omnichannel approach to get more customers. He feels that the online to offline (O2O) is the missing link in Singapore.
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