Scaling Our Matcha Tea Business To Beyond The U.S. Market [And Generating A 100% YoY Growth]
This is a follow up story for Matcha.com. If you're interested in reading how they got started, published over 4 years ago, check it out here.
Hello again! Remind us who you are and what business you started.
Hello, Starter Story fans. My name is Andre Fasciola (MatchaOne to those who know me) and I am co-founder and CEO of Matcha.com alongside my business partner Dr. Andrew Weil. We founded our matcha business in 2016 shortly after we landed the purchase of the domain name Matcha.com.
For more inside information regarding how we came up with the idea to start a matcha business, and details on how we went about actually launching Matcha.com, please click on this link to read our previous Starter Story article. There are a lot of golden nuggets in there on how to bootstrap your way to your first million. It’s our origin story if you will.
At matcha.com, we don’t just source the world's finest Japanese matcha green tea, we’ve built a vertically integrated supply chain for it. That means working closely with our team in Japan every single day to strategize & spearhead the explosive growth of matcha - both in the U.S. and internationally - in a sustainable and accessible way, and with authentic handcrafted matcha accessories.
Our most popular products are our Ceremonial grade and our Superior Organic grades. Due to the limited supply of these amazing matcha teas, we have a hard time keeping them in stock.
Since our last Starter Story article there have been numerous major developments happening in the business. We’ve entered our product lines in many of the major national grocery channels, formed a handful of significant celebrity partnerships (announcements coming soon), and signed several international distribution partnerships. To say we have grown by leaps and bounds would be an understatement. Still, in the US, and abroad, Matcha is still very much in its infancy.
We could go into all the many KPIs, and share some of our most important growth numbers, but instead, I think a much more telling number can be seen in the percentage below. This speaks to our true growth.
I attend several CEO peer group meetings a year and I’m often asked what our moon shot (our North Star) goal is and I always say “to get our matcha into every household in America.” I can say that as of right now we’re approaching 5% of the US population who regularly consume our matcha. For you math folks out there you can do the math and you’ll see why we're very excited. That is a lot of people! Having said that, we still have a lot of work to do.
As far as the matcha industry as a whole, between matcha.com and our celebrity partnerships we should be able to share the world of matcha with well over 100 million people. Watch out for coffee because matcha is the new coffee!
Success leaves clues. There are consistent patterns with success - learn those patterns and you’ll be well on your way to success.
Tell us about what you’ve been up to. Has the business been growing?
We were very fortunate to have entered the matcha space when we did. We’ve been able to establish ourselves as the leader in the matcha category which has enabled us to leverage the growing popularity of matcha across many of the main food and beverage categories. Much of our initial growth came during the COVID-19 pandemic - when many people were forced to shop online. Now that we are through the Pandemic many of these initial customers have stayed with us to enjoy the health and wellness benefits they get from drinking good matcha.
It became pretty clear shortly after COVID that consumers were quickly returning to shopping in person. Having established ourselves as the leading online (and offline) matcha company, customers who purchased matcha online from Matcha.com began asking for our matcha in grocery vertices as well.
In 2021 we took feedback from our customers as well as inquiries from national grocery stores and developed a grocery channel-specific brand.
In addition to rolling out our brand across grocery store channels, we’ve made major inroads with our wholesale, bulk, and private label businesses. Due to rising demand, we’ve signed with several major producers who have been receiving record levels of inquiries about developing products with matcha in them.
It’s pretty clear that matcha is now a major consumable product that is core to the US beverage market as well as central to a burgeoning and sophisticated wellness boom. It’s difficult to travel anywhere in the US and not come across a new cafe serving matcha or a matcha related product.
Just look at any social media platform and you’ll see thousands of matcha-related pieces of content. From recipe makers to extreme athletes. Folks can't get enough matcha. Let’s face it, matcha makes you feel good inside and out.
Super food companies, beverage brands, packaged food companies, ice cream companies, premium chocolate companies, skin and hair care companies, wellness brands, to tech brands. Brands that we all know and love have either been using our matcha or are in the product development phase using our matcha. It’s too many to count now.
Things started taking off for us on the nonretail side of the business in 2022. Not only did we have an increase in demand on the wholesale/bulk side of the business we also started getting approached by celebrities who wanted us to build matcha specific celebrity brands for them.
We have 4 of these types of partnerships in the works - soon to be launching. In anticipation of these partnerships, and to keep up with our growth, we’ve hired many more employees in the last 4 months. Most of these employees are on the sales side. We continue to hire great people and in fact, we’re hiring for a General Manager and a Digital Marketing Manager.
We continue to see 100% YOY growth for the business. For a 7-year-old company, we feel those numbers are pretty amazing. As far as growth channels we continue to use traditional social media channels with mixed results. Each channel requires a different approach and different types of content. Social media is a mixed bag when it comes to pushing the needle in regards to generating sales.
Most often it’s a one-to-one return at best - despite what most digital ad agencies tell you. Spend a dollar to earn a dollar. The only folks that tell you you can blow it up on social media for you are digital ad firms. I think the only companies that can crush it at scale on social media are companies that have multi-million dollar ad budgets. Or companies with really unique and engaging content. I’m not saying that ad spending on social media is a waste of money - I’m saying don’t expect killer returns right out of the gate - or even at all.
I instead suggest making a ton of great content and keep posting as much as you can. Also, send customers free products in exchange for user-generated content.
If you have any doubts or questions on marketing or growth go find Gary Vaynerchuk online. Just do and follow almost everything he says. I’ve learned more about marketing and growth from him than anyone else. Seriously.
When it comes to keeping our customers returning we spend a great deal of time sourcing and providing the best matcha in the world. Time and time again our customers tell us they keep coming back because the matcha is simply the highest quality, most flavorful matcha they’ve been able to find anywhere else. We even have customers leave us and try other matcha teas only to return.
I’d say to any entrepreneur or business person unless you have the best of whatever it is you’re selling you’re going to have an uphill climb gaining customers and keeping them. If you don’t have the best-in-class product maybe rethink your strategy and go out and get/ make the best. Seriously, it makes the whole enterprise more in line with what customers have come to expect in today’s very competitive landscape. One of our mottoes is, “Quality first, price point second.” This philosophy might not work for all business models but it still should be something founders think about often.
The other area we continually work on is our written content. We have a small team of internal folks who write great educational content. We come across people every day who have not had matcha nor do they know what matcha is. We spend a great deal of our content budget educating people on the merits of all things matcha.
I’m a firm believer that if you lead a category and set the tone for the (or if you want to lead a category - or set the tone for the category) for your category you need to lead the conversion, and you can never have too much content. One advantage to creating great content is that it has a multiplier effect in that you can dissect it and repurpose it so that it fits each of the different mediums you post it on.
We often use the word Kaizen around the office. If your goal is to create a sustainable and thriving business, understanding and implementing Kaizen in your business is mission-critical. Kaizen is a Japanese (although it was created by a US businessman) business philosophy of continuous improvement of working practices, systems improvement personal efficiency, etc.
We employ this philosophy in everything we do. We are constantly testing and tweaking all of our customer-facing interactions. One main way that we are always working on is creating a unique and personalized customer shopping experience.
For our bulk and wholesale sales channels creating a unique customer shopping experience is fairly straightforward. The customers are simply able to log into their account choose which product and sizing they want and check out through the website. Typically in a wholesale environment, a customer would need to contact a person for the pricing and logistics. We eliminated that bottleneck so that if you're a Mom and Pop company, with 4 locations, you can order everything you need with a few taps of your finger.
Building out a modern and simple user experience for our B2B customers has been a major focus for us over the last few years. We felt that we could leverage technology to disrupt a side of the industry that has not changed in over 20 years. Now we’re the standard and everyone else is copying us. You know you are doing something right when your competitors start to copy your every move.
Providing a personalized customer shopping experience is a bit more challenging when it comes to our retail customers. Beyond all the best practice items like having an easy-to-use website, a strong mobile presence, great content, and next-level branding, you have to find a way to provide a unique customer journey and shopping experience.
One way we provided a personalized customer experience was to create one of the first customer-facing (online) questionnaires that guided customers through a series of questions with the goal being to present them with the product that matched their responses.
It was very successful in that we identified exactly what customers wanted, and equally importantly exactly what customers did not want. I can’t stress enough how important it is to find out what your customers want versus projecting onto them what you think they want. It could be the difference between being successful or failing spectacularly.
Another very successful tactic we used was to design and build out a matcha.com specific mobile app. Don't confuse a mobile application with the mobile version of a website. They are unique from each other and should have different functionality and purposes. IMHO a mobile version of your website is just a condensed version of the website.
On the other hand, a specific app can be tailored to make the customer journey (sales funnel) much simpler and faster. The most impactful aspect of a mobile app is that it sits on a customer's phone rent-free. You don't have to weed your way through their email inbox or pay for targeted ads in an attempt to persuade them to visit your website.
You 100% eliminate the need to use a search engine. It’s a direct connection between the business and the customer. You have instant access to their attention via notifications, texts, and alerts.
Having said all this, customized apps come with a serious caveat. Because it is such a direct connection to your customer it can’t be overstated enough that you have to go above and beyond in the value you provide to the customer. Otherwise, it’s not going to be worth it enough for them to even take the time to download your app.
When we launched the app we were the first matcha company to have a mobile app that customers could buy from directly. In the e-commerce space, if you don’t have a specific mobile app you're missing out on a lot of direct customer interaction/data and more importantly lost revenue.
Keep testing, keep iterating, keep hustling, keep busting your ass, keep trying new things, keep reaching out to anyone who can help you, keep pitching, keep negotiating everything, keep being unreasonable, and keep on believing in yourself.
What have been your biggest challenges in the last year?
One of the main challenges (from day one) in building a successful business is making a clear distinction between what it means to spend all your time working in the business versus what it means, more importantly, to spend time working on the business.
At first, just about every entrepreneur who has ever bootstrapped a business knows what it is like to spend all of their time working on essential daily tasks. After all, if you don’t do it it’s not going to get done.
Getting a business license, building the website, taking product photos, writing content, negotiating with vendors, pushing back on MOQ with manufacturers, keeping an up-to-date QB ledger, prospecting for new clients, selling to current clients, calls with your CPA, your Attorney and the list goes on and on. It never ends.
As a business progresses from the start-up phase and into a growth phase at some point what you’ve been doing in the past as an operator will start to break down and cracks in the operation will start showing up - and usually at the wrong time. At first, it’s small things like missing a deadline, forgetting to pay an important vendor, making a bad hire, missing a launch date, letting your business license lapse, etc. Eventually, these small things that seem insignificant at first will gradually grow larger and will eventually turn into major challenges.
As you work hard to fix these growing issues and spend all your time on the day-to-day operations it’s very easy to take your eye off planning and executing your growth strategies. It’s like the race car driver analogy - If you’re driving at 190 miles an hour where you look is where you go - if you look at the wall - you hit the wall. It’s the same in business. Look at the road ahead and not the wall.
This is one of the main challenges I face every day. This year has been our biggest percentage of growth YOY. It’s been an amazing time but it’s also been a very challenging time for the entire team. I’d say the biggest challenge is scaling all our systems at the same time as we are blowing up with sales and new partnerships. It’s pretty hard to develop new procedures, train new employees, and implement these new procedures all at the same time we’re managing the daily business.
The solution is to build out an operational system and work hard to make it automated. Implement standard operating procedures to ensure consistency and quality across your organization, Document processes for everything from product development to customer service. Set it up so that every team member knows what to do and how to do it. Implement systems to monitor customer satisfaction and get feedback from your customers. The same goes for sales, inventory, HR, and all other components of your business.
To streamline and automate our systems, we employed AI pretty much as soon as it was available. I started hearing about the promise of AI back in 2022 after reading an article in the Economist. It was not long after I read that article that the first version of ChatGTP (Generative Pre-trained Transformer) was unleashed on the world. One of the first areas of the business where we employed AI was our customer service department.
We get thousands of inquiries on our website each week and many of the questions tend to be the same handful of questions. We were able to use AI to automate almost all of the responses to these questions. This allowed us to save a ton of employee time that we can redirect to other areas of the business. This is just one of about 10 areas in the business that we have employed AI to streamline and automate.
The use cases for AI are endless. AI will be to business what the internet is to information.
I could go on and on and write an entirely separate article just on how to leverage (saved us tens of thousands of dollars) AI to build and grow your business but I’ll save that for another article.
What’s in the plans for the upcoming year, and the next 5 years?
We have very ambitious growth plans over the next 5 years. We will continue to invest in our international distribution networks as we enter into new territories. To expedite our revenue and growth goals we’ve created an acquisition arm of the business that will enable us to scale faster and diversify into other areas where we have deep bench knowledge. We’ve already acquired two of our competitors and there are more to come.
Some of the most exciting future opportunities we're looking forward to are our celebrity partnerships. We’re honored to be working with such great entertainers and all-around amazing and kind people. Like us, each partner has dedicated their lives to honing their craft and curating an amazing audience. Together we create some next-level synergy as both sides bring industry knowledge and a future forward out of the box type thinking.
With these partnerships, we’ll be one step closer to our “North Star” of getting matcha into every household in America.
What’s the best thing you read in the last year?
The best business books I’ve read this year are as follows:
- The Great CEO Within by Matt Mochary -a tactical guide to company building
- Measure What Matters by John Doerr - It’s a lesson in identifying and measuring what’s most important in your business.
- Good to Great by Jim Collins - just read it!
- The War of Art - Steven Pressfield. Think of it as tough love for yourself.
Non-business:
- Devil in the White City - Erik Larson - Story of H.H Holmes - most prolific serial killer during the construction of the Columbus Worlds Fair held in Chicago. For me, the best part of the story is the momentous effort it took to build such an event.
- The Teaching of the Buddha - Author unknown. Gotta incorporate some spirituality into your life or else you will probably suck at being a good human being.
- Psychedelics Encyclopedia - Peter Stafford - For anyone interested in learning about the world of psychedelics this is a great guide.
Advice for other entrepreneurs who might be struggling to grow their business?
There are so many stories throughout history where the person who is trying to accomplish something great is right on the verge of giving up. Trampled down by defeat, exhausted by failure, bruised ego from everyone that said no, or said that you don’t have what it takes to be successful. The people who wanted it kept on pushing themselves until they eventually died or they eventually succeeded.
Something magical happens for those that push just a little more even when they feel like they can’t push anymore. Even when they feel like the world is set against them, even when they feel like they can’t handle another crushing defeat, even when they feel like they are losing all hope and sanity - and yet, they keep pushing. Pushing until one day it finally happens.
This is my story exactly.
I’d say to anyone building a business or running a business no matter what, keep trying! I’d say, keep testing, keep iterating, keep hustling, keep busting your ass, keep trying new things, keep reaching out to anyone who can help you, keep pitching, keep negotiating everything, keep being unreasonable, and keep on believing in yourself.
I’d also say you need patience. We live in a world of instant gratification where every second there is some newly minted crypto millionaire popping up on TikTok, or some new software millionaire driving a Bently - -flashing bag full of money. Don’t get caught up in that, and don’t compare yourself to that illusion. It takes a daily grind and a capacity for suffering. Not only for you but for all those around you as well. As Master Po ( from the TV show Kung Fu) would say to Cain, “ Grasshopper, you must have patience.”
I would also say you need to put as much effort into your personal development as you do into your business. If you want to do better you must be better.
Lastly, find someone who is excelling in life and business and do what they do. Success leaves clues. There are consistent patterns with success - learn those patterns and you’ll be well on your way to success.
It’s common that once you find success people will tell you that you are just lucky. Maybe.
I’d say luck is the intersection of preparation meets opportunity.
If you keep at it, practice patience, work on yourself as hard as you work on your business, and steal the clues of success - eventually, you’ll land at this intersection and be able to make your luck.
Are you looking to hire for certain positions right now?
Yes, we are looking for a seasoned General Manager with a background in scaling and growing a parent company and managing a stable of e-commerce brands and stores. This position requires experience managing both domestic teams as well as international teams of at least 20 reports. Highly organized, energetic, flexible, good with ambiguity, detail-oriented, strong intrinsic motivation, must be able to have fun, and must have tried matcha at least once! And not the cheap stuff.
For the right person, this could be a 99% virtual position with a one-day-a-month travel requirement to Arizona for team meetings.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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