Latest / Specialty Matcha Podcast / The Price of Transparency

Transcript

The Price of Transparency · Specialty Matcha Podcast

0:06
Hello and welcome to the Specialty Match Podcast.
0:08
My name is Ryan. This is my Coho Zhongjun, who
0:10
also goes by Sam. Hello.
0:12
Hello. And we're the cofounders of
0:14
Sanko Match Products. Yeah, we'll launch this podcast
0:16
to discuss our learning journey and matcha, share startup
0:18
stories and interview experts. And today's episode, actually,
0:23
Ryan just called me and send me a big list of things that he
0:27
felt very inspired today and tell me to not read it super
0:31
carefully. So I follow his advice and
0:34
didn't read it super carefully. So what?
0:35
What was it, Ryan? So it's the price of
0:39
transparency. I don't know, it's actually.
0:42
So I live in France and I'm slowly learning French.
0:44
I was walking to French class and these ideas just kind of hit
0:47
me. So I quickly took some notes and
0:49
I was like, I'm like, so curious what your reaction is to some of
0:52
these ideas sound. So I didn't want you to get too
0:55
much contacts because I didn't want to kind of prime you to
0:58
think the same way that I was. Well, I mean, like we, we've
1:01
been advocating for transparency on label, on the tea, on the
1:07
cultivar, on the tawar, on everything, all kinds of
1:10
information that the people can gather about the product that
1:13
they sell to consumers. But you know, along the way, we
1:17
talked to a lot of these brand owners across different
1:20
countries and we also heard some pushbacks from them, mainly from
1:25
a field brand owners in particular.
1:28
You know, they don't actually know each other, but they, you
1:30
know, all brought up this very interesting point is that like,
1:33
how can they feel safe to share all this information up to
1:38
everybody after being through all these difficult, these
1:42
difficulties and turmoils of sourcing, because sourcing is
1:45
particularly hard today. And they're just not that many
1:49
farmers to source farm. Like once you discovered, you
1:53
know, some farmers that are, you know, underdiscovered, you know,
1:58
if you share that piece of information, like people will
2:01
flood like that house in probably a few days.
2:05
We heard some. Is it nowadays?
2:08
We heard some stories of farmers in Wazooka where people, because
2:11
in, in Japan, you have to put your address on your website.
2:15
It's sort of your business profile and information.
2:17
And apparently all of these, these foreigners go up to
2:21
people's door in like middle of the countryside, knock on it and
2:25
like ask, can I buy like one metric ton of matcha, please?
2:32
So it's a, you know, so I thought it was really
2:35
interesting investigation to talk about like what is the
2:37
price of transparency? And it was actually very
2:40
personally motivated. I even this morning and, and
2:43
yesterday night, I was in the process of sourcing or talking
2:47
from someone that we want to source Tenja from.
2:50
And it is just unbelievably difficult pulling information
2:53
out of the people, at least the particular person that I was
2:57
talking to. And like, they were like, what's
2:59
your budget? And I said, you know, it really
3:00
depends, right? You know, we're happy to pay 100
3:03
to $200 a kilo for like really good Yabu Kita.
3:08
And, you know, if you have nicer, higher end cultivars like
3:11
Oku Midori or Asahi, you know, we'll pay up to five, six,
3:15
$700.00 a kilo. And if it's competition grade,
3:18
maybe we'll pay even more in terms of wholesale prices.
3:22
But like, I need to know what you have before you can give,
3:24
before I can give you my budget. And there is this long back and
3:28
forth of like, like, we're both trying to pull information from
3:31
each other. And it got me thinking, wow, you
3:34
know what? There's a real knowledge
3:35
asymmetry here for new players, right?
3:38
Like if people don't really divulge a lot of information
3:42
very quickly, and if you don't know what the market rates are
3:45
for conventionally grown semi dori, you're not going to have
3:50
like what I would call schmuck insurance.
3:52
You're going to get duped into paying way more for something
3:56
than it is worth because you don't understand what all the
3:59
rates are from different producers.
4:01
So like this is true for brand sourcing Macho and Tencha, but
4:06
it's also true for consumer sourcing Matcha.
4:09
And I realize that that's actually a huge change that's
4:13
occurring right now in the industry.
4:15
If you know that you're specifically want organic
4:18
Okumadori from Wazuka, but you can probably find 5 or 6
4:22
different companies sourcing from different places in Wazooka
4:26
selling it. And then you can start doing
4:28
some some of your own price comparison and you can learn,
4:31
OK, what is the market range? Am I paying $20.00 for a tin all
4:36
the way up through $60.00 through a tin?
4:38
Is the $60.00 one differentiated in any way that what would cause
4:43
me to spend the extra money? Maybe it was hand picked.
4:47
Maybe they were using really high quality organic fertilizer.
4:51
Maybe it was shaded longer, Maybe they were using Tana
4:55
shading, Kanlei Shaw versus the shading, the mechanisms that
5:01
directly cover the plant, which generally lead to lower quality
5:05
compared to the ton of shelves shaded.
5:07
And then you can Start learning all of these things and then you
5:10
can start being able to do some price justification.
5:14
But ultimately what's going on now is that consumers are doing
5:17
a lot more price arbitrage and ultimately the consumers are
5:22
doing and what all of us should be doing, even brand owners who
5:25
are sourcing, is getting the knowledge and context to
5:28
understand, am I getting a good deal?
5:31
Yeah, it's it's pretty difficult because like actually there are
5:36
three parties in this whole discussion, right?
5:39
Like that, that that will be directly impact by a transparent
5:43
label. You have the farmers who
5:45
frequently do not want to be discovered, do not want to be
5:49
bothered. You have all these brand owners
5:51
or these sources who do not necessarily want their source to
5:56
be discovered by other people or competitors.
5:59
And you have, you know, all these consumers who want to know
6:04
more about the product that they are paying a very hefty price
6:09
for. So it's, it's very tricky that
6:12
you know, like ultimately it's really just the consumers who
6:16
are getting the end benefit of having a transparent label.
6:20
And also like price is really not a good quality reference
6:24
anymore for now because the price is so volatile.
6:27
Like every quarter you're seeing a price increase.
6:30
So it's not really a reliable reference anymore for consumers.
6:35
So it's really a terrible time really to learn or set up the
6:40
linkage between price and, you know, attributes for tea, for
6:45
matcha that they drink. Well, what you really need to do
6:48
is separate price volatility from drivers of price or price
6:53
drivers. Like if a tea is handpicked,
6:55
that is a price driver because there is a direct, you can draw
6:59
a straight line from labor cost to a higher price.
7:03
And now with the craziness of the market, right, like you have
7:07
all of these price volatilities which are actually just like
7:11
supply and demand and the market readjusting to meet that supply
7:15
and demand. And you know what happens is
7:17
that price changes. So even across the board, you
7:20
know, you, you, your mental model needs to be relative to
7:24
the moment, but not necessarily relative comparing prices to
7:27
last year or the year before, because and then you have all of
7:31
this like general market volatility.
7:34
But the mental model of understanding the price drivers,
7:38
it's the same model. You just have to readapt it for
7:40
these new market prices. But you can still know pretty
7:43
fundamentally that if it's shaded longer, it's probably
7:46
going to cost more. If they use better fertilizer,
7:49
it's probably going to cost more.
7:51
Hand picked costs more. Certain cultivars that are lower
7:54
yield and harder to grow like Asahi, that's probably going to
7:57
cost more. Different shading styles like
7:59
Tana or Hanzu shaded, which are more labor intensive and like
8:03
higher infrastructure capital cost also going to cost more.
8:07
And it's like having this framework in mind so that you
8:09
can like start comparing products to make sure like
8:13
you're not buying like machine harvested tea from a very high
8:17
yield cultivar. You know that's auto harvested
8:20
in Kagoshima for 60 dollars. It can like that is different.
8:23
On the label if that information is on the label.
8:26
If the information is even on the label, clearly the price of
8:29
transparency is too high for a lot of those people.
8:32
It's pretty interesting that, you know, if you especially us
8:36
end up talking to all these brand owners and farmers, they
8:39
really do not have a lot of, I don't know how to say how to
8:43
frame, but the demand or the impetus of sharing more
8:46
information. It's really the consumers who
8:50
are benefiting from all these informations and consumers have
8:54
very, very little ways to pull this information from all these
8:58
brands or all these farmers. So how, how, how can we like
9:03
pull or push all these people in sharing more information?
9:08
So what's interesting is you're starting to see more and more
9:11
companies be much more transparent about whether Macho
9:14
has grown. And then you have a bunch of
9:16
people who are not for very good reason, you know, worried about
9:19
supply issues. But what's super interesting is
9:22
that like even a company like Kettle, if you use them as an
9:25
example, I feel like they've gotten significantly more
9:29
transparent in the past year, even about who they're sourcing
9:33
from the chashis that they're working with, the farms, the
9:36
farmers that they're working with.
9:38
You know, they were real pioneers in leading the
9:39
transparency of this whole specialty matcha movement.
9:42
But even even within the past year, it feels like a noticeable
9:45
uptick. And I think they can, and this
9:48
is just me speculating, I have no insider information, is that
9:51
they just have such good relationships with these people
9:54
and these farmers and these chashis are at such Max
9:57
capacity. There is no price to that
10:00
transparency, because they are not.
10:02
They're afraid, yeah. They're not afraid of sharing
10:06
all this information because they know that even if people
10:09
end up getting the suppliers information, they wouldn't be
10:13
able to get it. Yes, exactly.
10:15
And maybe this wasn't the case, you know, two or three years
10:18
ago. But I mean, that's the problem,
10:21
you know, the these people who are not as established, you
10:24
know, over the course of a decade and who probably have
10:27
really deep references of people who have worked with them, who
10:29
recommend them internally. And you can build sort of all of
10:32
this social and political capital within the Japanese
10:36
matcha industry. Like if you don't have that
10:38
social and political capital, you know, your supply is not
10:41
guaranteed. And there's a really high price
10:44
to pay for a lack of transparency or for transparency
10:48
to make it transparent. But there's also an educational
10:51
component. So that's another cost of
10:53
transparency. You know, if we give all of this
10:56
data, all of these labels, you know, on the packaging, you have
11:00
to understand what they mean, which means you have to invest a
11:04
lot more in consumer education. Now you got to defend yourself
11:08
when it changes every year, people are going to ask why was
11:11
it shaded less this year or that year or why did the blend
11:14
components change from this particular blend from year to
11:19
year and what was going on, blah, blah, blah, right?
11:22
And you know, The thing is like true specialty is understanding
11:26
the objective attributes of a product's production that lead
11:30
to a certain flavor profile outcome.
11:32
So everything that's on the label where we can make our own
11:35
quality assessment should be predictive and can be attributed
11:40
to what causes flavor profile variations.
11:43
So it's a double sided sword because to an uneducated market
11:47
it's just blah, blah, blah, right?
11:49
It's just a bunch of technical terms with weird vocabulary that
11:52
they don't understand. And when it's different, it just
11:55
makes people worry. But to a market that does know
11:58
those differences, it's actually really meaningful information
12:02
because they can start pricing it against other people's
12:06
products who share a similar level of detail and decide is my
12:10
money better spent on this matcha versus that matcha.
12:14
So there's also the price of educating and the price of
12:18
alienating and a lot of people who just don't want that level
12:22
of detail. So I think what we've seen is a
12:25
large number of companies who aren't focused on transparency.
12:28
If you look at the product itself, the powder that's in the
12:33
can or in the sack in the bag, there's actually, there's a
12:36
really interesting corollary to this is that if you work in the
12:40
beer or liquor industry, large companies like Anheuser Busch,
12:45
InBev or Pinella Ricard or any of the big or Diageo who owns,
12:50
you know, many different alcohol brands, everyone refers to the
12:53
product inside the bottle as the liquid.
12:55
It's the liquid. We're doing liquid improvements,
12:57
we're doing liquid innovation. And it's specifically referring
13:00
to the actual product itself, which we should start doing
13:03
within matcha, right? Like matcha, it's, it's the
13:06
powder, the powder that's inside.
13:09
And so many brands are basically now built on layering on all of
13:13
these intangible assets. So maybe it's brand
13:16
associations, maybe it's connection with tea ceremony,
13:20
maybe it's about how organic it is.
13:22
Maybe it's about like the spirituality of having a mindful
13:26
ritual every morning and you layer in all these intangible
13:29
messaging to that may or may not reflect the actual powder that
13:34
they're selling. But an extreme example, would
13:36
this be like share a Coke, taste the feeling, right?
13:39
They're just selling bottles of sugar water with caramel
13:41
coloring and flavoring, right? It's all built on these
13:44
intangibles. So I think a lot of macho brands
13:47
have found really strong moats in brand building, regardless of
13:52
the quality and the actual price of the powder that they're
13:57
sourcing. Feels like a marketing.
13:59
Feels like a marketing propaganda.
14:01
I mean, it almost is. I mean, that's one way that you
14:04
can do value. I mean, the problem with the
14:06
matcha industry is that there's so little value creation that
14:09
anyone can do. Coke is an interesting example,
14:13
Ryan. On one hand, you know, like you
14:16
can read the formulation table and know exactly all the
14:20
components that goes into every bottle.
14:23
But on the other hand, Coke also has regional flavor variations
14:27
because of the sugar suppliers. And they're not necessarily
14:30
sharing that piece of information.
14:32
But you do see the Coke fan base, you know, trying to buy
14:36
imported Mexican Coke into the States because they use cane
14:40
sugar there versus corn syrup. And like, if you relate that
14:44
back to Matcha, you know, all these larger companies, they
14:47
don't necessarily tell you exactly what's inside the can.
14:52
And, you know, even if it's the same price or a higher price
14:56
every year for the same product with the same product name, you
15:01
can still taste the, you know, variations year by year.
15:05
And you know, they you don't necessarily can construct a
15:08
mental model of what went wrong or what went right.
15:12
And if you to kind of take it back to some of the smaller
15:16
companies who are sharing a lot of information, you still cannot
15:20
really construct a very correct mental model of like what
15:24
exactly these flavors related to what.
15:26
So how you know how like I feel like there are a lot more that
15:33
people can do to educate consumers on the linkage between
15:38
the attributes that you are sharing on the label versus what
15:41
you can end up tasting. And I think it's very hard
15:45
because like as you said that you know, every year because of
15:48
whatever reasons like climate or availability of labored people
15:54
end up shading the tea for more days or less days.
15:57
And that's not necessarily a choice that people made to rate
16:03
a better product. Sometimes it's just a reality
16:05
and sharing those information to consumers, you know, like you
16:10
almost begging for the wrong questions or doubts.
16:13
It's true. I mean that's a huge price of
16:15
transparency actually because when there is natural variation,
16:19
the natural question is why did it taste better or worse this
16:23
year And like a huge part of the value chain doesn't have a lot
16:27
of control over the process like you said.
16:29
So some of it like literally be because the tension factory is
16:33
too full. There was no volume that was
16:36
processable today. We had to wait till tomorrow or
16:41
it was raining a little bit too much earlier last night.
16:44
Everything's too wet. We need to wait one day.
16:46
And we had to make the decision that it was worth not picking on
16:49
a rainy day versus having it be a little bit after the optimal
16:54
window for for harvesting that particular cultivar when it was,
16:58
you know, quote UN quote ripe or like, you know, perfect timing
17:01
in terms of the Leafs maturity. So that's that's you're begging
17:05
for the wrong questions. It's a huge cost to this
17:07
transparency if you really are very specific about what's
17:11
actually changing the flavor from year to year, which is
17:15
ultimately what should matter because flavor is absolutely
17:19
king. It is like market data has shown
17:21
over and over that flavor in the sensory experience of product is
17:24
the number one predictor of repeat purchase.
17:28
Put another way, if you don't like the way it tastes, you're
17:31
probably not going to buy it again and you're definitely not
17:34
going to buy it again. If you have 100 other choices,
17:38
which is what we have in this very fragmented market.
17:41
Not only do you have 100 other choices, but it's very easy to
17:45
discover them online through social media and even through
17:48
using like these new. You know, the AI agents are
17:52
really good for actually just for using it for product search
17:56
I found and for price comparison, right?
17:59
It can do all of those comparisons.
18:01
You can say find me every Oku Midori from Uji Tawara that you
18:05
can find that is under $40, right?
18:08
This type of prompt can save someone an hour of looking
18:11
things up. So these price comparisons are
18:13
getting significantly easier and makes consumers better, right?
18:18
It all the way it floods back. How do I know if I'm getting a
18:22
good deal, which is what, you know, consumers and you know,
18:25
people like us who are trying to supply the product are also
18:29
constantly asking ourselves. But one thing is very certain as
18:33
consumers are getting more educated and they're getting
18:36
having the right frameworks to ask the right questions and this
18:40
very knowledge rich environment will create winners and losers
18:44
among the existing matcha brands.
18:47
Now. So you know, there is tremendous
18:49
cost to educating your consumer, but if you don't and your
18:53
consumer gets educated somewhere else, not only are you not
18:56
educating them about what to look for, someone else is and
19:00
then you know, it's a form of narrative.
19:02
It's a form of of power when you're the one who's like
19:06
providing useful information people, especially with regards
19:10
to saving money and with in regards to something that you
19:13
put in your body that you consume.
19:16
It's, you know, these types of sharing, these types of
19:19
knowledge just are very impactful and you have a lot of
19:22
advantages if you're the one who your consumers are getting that
19:25
information from. Yeah, true, true.
19:28
But also, I I actually agree more on, you know, the first
19:33
part of your argument, Ryan, taste is king.
19:36
Information doesn't necessarily equal to good product.
19:40
You can share a lot of information about a product
19:42
that, you know, it might still taste like crap.
19:45
This happens to a lot of craft beers and natural wine that I
19:49
consumed in the past. You know, like you end up
19:51
learning a lot about that vintage and that, you know,
19:54
farm, but it's not a good product.
19:57
It doesn't taste good and maybe your and you end up learning all
20:02
the wrong taste reference about all the information you just
20:05
learned, which can also be the case.
20:07
Yeah, no, absolutely understanding the drivers that
20:10
cause flavor. And I want to record a future
20:12
episode called something along the lines of why reference
20:16
standards are so important. And that's actually what the
20:19
matcha industry is missing. I keep sharing the story because
20:23
it was so impactful to me as we tasted local Midori from Mazuka.
20:28
Same cultivar, same growing region, same processing
20:31
facility, same everything. The only difference was the use
20:34
of fertilizer and pesticides. Those were so different teas
20:40
that it blew my mind. I had no clue how much
20:44
fertilizer was impacting, how bitter it was, how umami it was,
20:49
and how just how different like. It helps.
20:52
More organic farming what that does and not feel most flavors.
20:58
I'm sorry, right. I was saying the, the texture,
21:01
the mouthfeel of the same tea fertilized and unfertilized,
21:05
it's shocking. And also like we tried to melt
21:08
some of these potential and it performs so different inside the
21:12
mill. The end powder is like very
21:15
visibly different from each other.
21:18
Very coarse, organic, much is very difficult to mill well.
21:22
Yeah, very fibrous. Yeah, much more fibrous, which
21:25
makes sense. You know, without the use of
21:26
pesticides and fertilizer, you have less umami.
21:29
You have less nitrogen. That's, you know, nutrients for
21:33
the plants, and it has to protect itself from bugs.
21:36
You don't have this magical, you know, chemical deterrent.
21:40
You have to make your own. You got to be a Hardy, hardier,
21:43
sturdier plant. Yeah.
21:45
So that happens physically, but it also probably happens
21:48
chemically, which results in different flavors.
21:50
I was repacking a bag of tensha that we recently acquired from a
21:55
place called Fukuchiyama in Japan, and I was reading the
21:59
information that we end up getting shared from the farmer
22:03
and he shared all the fertilizer ingredients that he used for
22:08
that tea, which was very interesting.
22:11
I feel like that should really be a default information on the
22:15
package in the future. That really makes a huge
22:17
difference on the end flavor. Pulp, yeah, or even if it's
22:21
reductive like synthetic versus natural, cuz there's some really
22:26
good natural fertilizing practices too, even to create
22:29
non organic tea. Understanding doesn't come from
22:32
synthetic chemicals, which we actually we don't have a huge
22:35
problem with so long as it's done very responsibly.
22:38
I mean, you know, the fact that, you know, fermentation and
22:41
chemistry can get you very nitrogen rich soil is is you
22:47
know, it's a magic of modern modern world.
22:50
And if it makes tea taste better and it takes the work down on
22:52
Japanese farmers, probably worth it.
22:55
It's a really win, win situation when it's done well.
22:58
Yeah. And actually we even recently
22:59
read some research that was actually being done in China
23:02
about nitrogen fixing bacteria. And he was a PhD student doing
23:07
some inoculation in the soil to promote a certain type of
23:11
bacteria. I think it was a bacteria.
23:13
Maybe it was some kind of yeast? Or bacteria.
23:16
Bacteria that produces nitrogen naturally, so kind of self
23:20
fertilizes and replenishes. So maybe even we'll see
23:23
technology like that and get rolled out into the future as
23:26
well as in Japan to make it even more sustainable and even more
23:29
natural. But still, you know, going back
23:32
to like us trying to buy tensha or us trying to source matcha.
23:36
Like if you understand what the market rates are for labels that
23:40
the industry trades on, like for example in a label the industry
23:44
trades on is first or second harvest 1 might be organic or
23:48
non organic or the may be cultivars, right?
23:51
If you learn all of a sudden that your favorite blend Hatsu
23:54
Mukashi is 70% Yabukita and 30% semidori, both of which are
23:58
incredibly high yielding cultivars that generate a lot of
24:03
tea per plant. And if you're paying $50.00 for
24:06
that for a 20 gram can, you're almost certainly overpaying
24:10
compared to what the market rates are for those components.
24:13
And again, you need some form of schmuck insurance.
24:16
And part of that is transparency and understanding what the
24:19
market rates are for things to do price comparisons.
24:22
Because right now we're at the early, early, early baby days of
24:26
this specialty industry and people are asking these
24:29
questions and brands are slowly releasing this information so
24:33
that everyone can make better choices.
24:36
But there's prices to be paid. There's prices to be paid by the
24:39
consumer, which typically means paying less.
24:42
I guess there's secondary consequences, I should say that
24:44
the consumers are paying less. It can hurt the people sourcing
24:48
it, or it can help the people sourcing it.
24:50
And then there's the farmers as well.
24:51
So it's actually a pretty complex system when you work
24:54
through What are the implications of transparency?
24:58
Yeah. But again, Ryan, like you talk
25:01
about, you know, like a can of matcha that's made-up of 70%
25:05
Yapakita and 30% salmon Dory. And obviously consumers knowing
25:09
that piece of information, you know with some knowledge and
25:13
experience will be able to have a pretty good mental model of
25:17
what that kind of matcha actually worth.
25:19
But the problem is like, why would these brands share that
25:24
piece of information? If like they don't decide to
25:27
share the information, consumer will never know what exactly
25:30
isn't that can. So it's really a dilemma, I feel
25:33
like. And if like brands do decide to
25:36
share some information, it usually would imply that it's a
25:40
indicator of good quality. That's why they decided to share
25:43
that piece of information. Or at least that's how, you
25:46
know, consumers usually perceived from all these, you
25:49
know, brand marketing strategy. You know, I think the ones that
25:52
they do pay a very low price because their supply is
25:56
guaranteed and their customer base is relatively well educated
26:00
and they've already paid the price in educating them and
26:03
they're fulfilling. They've literally created new
26:06
demand. Specialty matcha is a new type
26:09
of demand. It's a consumer wanting a new
26:11
thing that actually really didn't ever exist in the matcha
26:15
industry until very recently. Are you getting single cultivar,
26:18
single estate, single origin products that have this level of
26:22
transformation? It's actually an entirely new
26:24
market in a lot of ways. But since that market is there,
26:28
it is a group of consumers to tap into.
26:31
And you know, there's a really interesting thing, right?
26:33
Like if you learn the factors that impact matcha equality and
26:37
they're on the label, you know, cultivar, region, day shaded, we
26:41
can think of brands like Olica that share this level of
26:44
transparency. And if the impact on much
26:47
equality is baked into the price, right, like you're paying
26:50
more for certain cultivars than others or for certain processing
26:54
methodologies than others, then if you know these quality
26:58
factors, then you can infer what that product should be worth.
27:02
So then your whole pricing matrix has to be logically
27:06
consistent and justified. And if you do sell a Yabuquita
27:10
for $50 a can there better be something phenomenal or very
27:15
interesting about it to warrant that type of increase or that
27:21
price deviation? I'll say.
27:22
But that's just giving more information over to the
27:25
consumer, which I think, you know, that's what those
27:27
consumers want. And you saw this, you know,
27:30
start from a very niche industry in something like coffee in the
27:33
early 2000s with the so-called 3rd wave coffee movement and all
27:36
this new level of transparency. And I think it was dismissed.
27:40
I was a child at the time, but from what you read, you know, it
27:43
was relatively dismissed by a lot of people, still is.
27:46
But that's grown from a very niche cult movement to now, I
27:50
think it's a $20 billion industry with people who spend
27:55
all this time and energy and take pleasure and learning all
27:59
of these facts and enjoying the experiences that these products
28:02
give them. And because taste matters most,
28:05
the smartest consumers will start arming themselves with
28:08
knowledge because no one wants to pay more money for a worse
28:12
product. And the only way you cannot do
28:15
that now is if you are able to make your own quality judgements
28:19
yourself. Especially I think this is going
28:22
to be doubly compounded by this matcha boom because everything's
28:25
getting way more expensive. Every single can of matcha that
28:28
you buy is a bet. And it's a bet that it's worth
28:32
the 60 bucks that you spent for like how good that that product
28:37
is going to taste. And a lot of these new products
28:40
and existing products are just not going to deliver on
28:44
everyone's mental model for their price to quality ratio.
28:47
And then you're like, oh whoa, I need to learn a little bit more.
28:50
So I stopped buying things that are disgusting and I need to go
28:53
to company that are willing to share this information with me.
28:56
That is true. Even Yabukita can taste vastly
28:58
different from different regions, from Uji to Yami to
29:03
even, you know, Korea, depending on the type of tala, the type of
29:07
fertilizer, the type of processing method, you know,
29:12
like one day you might actually earn the status of, you know,
29:15
coffee. Arabica, like people talking
29:17
about this is Arabica bean. This is Arabica bean.
29:20
It's not robust, but even arabica can taste very different
29:23
from different regions. At some point I feel like it's
29:25
almost sounds like the ceremonial grade tech that
29:29
people use it to label matcha in the coffee world.
29:32
Like people keep talking about this being is Arabica, but you
29:35
know, you can still have good arabica and bad arabica.
29:38
And I feel like that will become the case for Yapakita one day
29:41
very soon, even though right now it's like the equivalent for a
29:45
mass market, mass produced matcha.
29:49
Well, saying it's Arabic because, like saying it's
29:51
camellia senensis, yeah. Yeah.
29:54
Well, it's, you know, we're not even talking about coffee
29:57
cultivars at that point. Even the fact that someone says
30:00
that basically says we're not specialty.
30:03
Anyone specialty would say we're using for bone, we're using
30:06
geisha, we're using, you know, whatever.
30:09
I forget the number SL28I think. Yeah, but I mean like mainly
30:15
people were comparing to like Robusta, which is another mass
30:19
market being, but even Robusta has their own cultivate
30:23
variations as well. So yeah, it's, it's, it's
30:26
interesting how people perceive different products based on the
30:30
information they learned from what period of the time they end
30:34
up exposing to, to the culture, I think.
30:36
It's a real opportunity for a lot more interesting
30:39
storytelling now if everyone is more transparent.
30:42
That's content marketing, it's educating.
30:44
It's content marketing, and it's teaching people what makes this
30:48
delicious. Why does it taste that way?
30:50
Why did the farmer make that decision?
30:52
That's way more interesting content marketing than matcha
30:56
versus coffee or something like your morning ritual, right?
31:00
Like everyone's using and abusing the same content
31:03
marketing and it makes sense, right?
31:04
Matcha is a new category. People are introducing it to
31:07
consumers that haven't even heard of matcha.
31:10
You know, all over the world, there needs to be a natural
31:12
progression to these things. But in markets where it's more
31:15
sophisticated, it just doesn't fly.
31:17
Like for example, I I saw that MTCH did a like a a drop of
31:23
Kerari 31 cultivar grown in Goku show, which is incredibly
31:27
unusual combination of things. Kerari 30 wants a very new
31:31
cultivar and having it grown in Goku show.
31:34
Uji, I think there's only one farmer that grows it.
31:37
Maybe there's two and I only know.
31:40
But people mainly use it for like hunta like like Wakota or
31:46
or green tea processing like they don't necessarily use it
31:49
for matcha. But everyone, you know, in the
31:52
the lines that they attracted by selling this Matcha Karari 31
31:58
from Goku show Uji were insane. Like, like if you think Thailand
32:02
is sort of the top of the mountain right now in terms of
32:05
consumer education and awareness, right?
32:07
Like, they clearly knew what all those meant and we're ready to
32:10
pay up for it. And they really cared about not
32:14
only pay up, but wait for it, like their time and money and
32:18
the effort of being able to access it, right?
32:21
Like that wouldn't happen in New York, right?
32:23
The market just isn't there. So everyone's in these different
32:26
stages. But how does New York get there
32:29
more? How does Los Angeles get there?
32:31
Well, they get there through this type of content marketing,
32:34
right? It's a huge opportunity.
32:36
That's like, I guess, a benefit of transparency, not the price
32:40
of transparency as you get these people with these much deeper,
32:43
much more complex and sophisticated preferences that
32:47
have much more nuanced understanding of what's driving
32:49
flavor, what's driving scarcity and what's driving quality and
32:54
making better decisions. And, you know, I think it will
32:57
make the industry respect consumers a little more.
33:00
If you look at like, the average person who is trying to show off
33:04
the fact that they consume matcha on Instagram, right?
33:07
And you're a Japanese tea farmer.
33:09
There's a lack of seriousness, we'll say, in a lot of this
33:12
content. But you know, when you see like
33:15
100 Thai people line up in the hot sun to buy Karari 31 from
33:19
Gokusho, it sends a very different message about the
33:23
level of sophistication that people have in appreciating the
33:27
product that they put their blood, sweat and tears into.
33:30
So Ryan, we keep talking about, you know, the price or the
33:34
benefits for consumers to have a better access to all these
33:39
transparent information. What about the brand owners?
33:42
How can they be benefit from this kind of practice or what
33:46
should they care like or if they should care about it at?
33:49
All yeah, that's like so traditionally within T sourcing,
33:53
you keep your sources pretty well protected.
33:57
We're in an interesting dilemma as we source tensha.
33:59
You know, for sometimes I feel really guilty about the thought
34:04
of buying tensha from someone that I know someone else could
34:07
find just as easily and sell it to another business.
34:10
And I just add 30%. I think there's this huge part
34:14
in the back of my brain thinking, wow, you can get such
34:16
a better deal if you just found this person yourself.
34:19
So it's like really difficult. Like, is that how we want to
34:21
build our business? Like which sources do we secret
34:24
or not secret? Like it's interesting intention.
34:28
Yeah, but that's not necessarily the case, right?
34:31
Because, you know, you have all the this like very weird and
34:35
legacy practice of consumer, not consumer client prioritization.
34:41
Like frequently, you know what, we can end up buying from a
34:45
supplier because we know them earlier.
34:48
It's not the case for other people who are late comers.
34:51
Even if they end up knowing the information or the the the
34:55
supplier, they wouldn't be able to buy it because they're
34:58
they're getting deprioritized. Yeah, I mean, that's true, but
35:01
the price of transparency is 0 then, but where the price of
35:06
transparency is high, like if we know they're sitting on a lot of
35:09
material, then we're just being completely cut around.
35:12
So, you know, it's, you know, it's important business mode for
35:17
a lot of people. And there's a really interesting
35:19
tension there meant even if your coach sort of loosely
35:22
transparent, for example, it's, there's enough like, you know,
35:27
what we would call like PPI personally identifiable
35:30
information, you can start to do some pattern matching and you
35:33
don't need to say very much. And actually, a lot of guests
35:36
that have come on the podcast that talk about some of the
35:38
farmers that they source from, I've gotten private messages
35:41
from people saying I know exactly who they source from
35:44
after after very little information actually.
35:47
Yeah. Like, for example, if you have a
35:49
hand picked Tanzu Asahi from Goku show, that's from a husband
35:52
and wife team, it basically implies a single family.
35:56
You didn't say their name, but anyone who knows, knows exactly
36:00
who you're talking about. Or if not from a husband and
36:03
wife company, like there's only I think, one or two other
36:07
candidates. Yeah, it's really, it really
36:11
narrows it down. Or even something like a newer
36:13
cultivar like 10 Mio from Uji Tawara, right?
36:17
There's just not that many people growing 10 Mio and it's
36:19
like pretty easy to track down who who you're talk, who you're
36:23
sourcing from. Even with that level of like
36:26
lack of transparency, I would say, which, you know, it leads
36:30
you up to the question is what is actually the job of a lot of
36:34
these matcha brand owners, right?
36:37
Because we're all like sourcing from the same very small pond of
36:42
producers that can produce things that are exportable, that
36:45
taste good. But there's just not that many
36:48
farmers that are discoverable and everyone that has been
36:51
discovered is discovered. And you realize the more you dig
36:54
into this industry is what you end up really paying for is just
36:58
someone else's label, right? Like the powder inside, right?
37:02
Like especially for people who, let's say you source from
37:04
Obooboo, for example, there's a lot of companies that source
37:07
from Obooboo tea Farms and farm in Wazooka and you can look at
37:11
their price and then you can just go to obooboo.com or
37:14
whatever their website is and you can see what the price
37:18
markup is, right? It's not very difficult for
37:21
brand owners or consumers or in the information age that we live
37:25
in AI to realize. Oh wow I literally just parted
37:29
with an extra $20.00 for someone else to put a label on this
37:34
product. So yeah, what that is that is
37:37
this very true. But but then did this really
37:40
adds into the argument of like, why should brand sharing all
37:44
this information? Like maybe there are some other
37:48
reasons why this brand is selling more expensive for the
37:52
same tea. Like could be the logistic,
37:54
could be the extra tax that he or she end up paying for the
37:59
country that that company or that brand is set up in.
38:02
Could be really just the price that that brand end up getting
38:06
quote from the supplier because the supplier doesn't quote the
38:10
same price for everybody. So then it's really not a good
38:15
argument for brands to share all these information knowing that
38:18
you know they are getting the same tea from other brands.
38:22
Absolutely. And I think part of it is that
38:25
the, the value, the circle of agency within the value chain of
38:31
a matcha brand owner is relatively narrow, right?
38:36
So their job is to discover tea that tastes good, right?
38:39
They need to spend marketing, right?
38:41
Their cost of customer acquisition is typically not 0,
38:44
right? So even finding you some
38:46
consumer that would like this thing costs money.
38:49
They got to curate the selection, which typically means
38:52
traveling to Japan and buying a lot of other samples that don't
38:55
taste good, right? Then they got to take all the
38:57
great videos, they got to take the great photos.
38:59
They have to warehouse the product.
39:01
They have to figure out how to import, export it, and then
39:04
they're trying to find you the best and cheapest rate on
39:07
shipping, right. So there's a lot of value add
39:09
that is being done to justify that extra $20.
39:13
And you're right, it doesn't make sense for these people.
39:16
The cost of transparency is too high.
39:18
It's just a stupid business decision, which is why we don't
39:22
see it. And in that case, you know, it
39:24
really understandable why they don't do that.
39:27
But my and then it it from a purely idealistic world.
39:33
My complaint about the way that this industry is structured now.
39:37
And by the way, I think these matcha companies are heroes,
39:40
right? The reason that this matcha boom
39:42
exists is because of all of these matcha companies, right
39:46
getting founded. And I'm sure they were
39:48
bootstrapping some of them for years, losing money until they
39:52
finally found their audience and like help build this global
39:56
demand for matcha. Really, we should everyone
39:58
should be super thankful and bowing down to all of these much
40:02
of brand owners, right? We shouldn't just think of the
40:06
the farmers as the victims to this.
40:09
Matcha boom. I think the real victims are
40:12
actually the Matcha brand owners themselves who aren't able to
40:16
get supply or are not able to get reliable supply or think
40:20
that they're ordering something. And then 50 kilograms arrives
40:23
and it's a lower quality tea. And then they reach back out to
40:27
their Japanese producer and say, hey, this doesn't taste like the
40:30
sample. And they're told, oh, that will
40:33
cost $50 extra per kilo right after the fact, right?
40:37
Like there's some. Craziness going on.
40:39
They're the real heroes of this industry.
40:42
But my complaint about, and this is not of a single company, but
40:45
of the whole structure, is that it's a model that relies on
40:49
information scarcity. You don't share much about the
40:53
product. You only selectively educate
40:56
people on things that have nothing, where you don't have to
40:58
pay a price, right, The price of transparency.
41:02
And it's, you know it, consumers aren't better for it.
41:07
But that's all slowly starting to change, right?
41:10
Knowledge is traveling at speeds faster than we can even probably
41:14
comprehend. More people know more about
41:18
matcha today than they ever have in human history.
41:22
Like, that's like, wild. It's incomprehensible, probably
41:27
for any single person in this entire system.
41:30
And everyone is getting smarter, everyone is getting more savvy.
41:34
Everyone is arming themselves with knowledge, especially for
41:37
people who are driving what we'll call compound growth.
41:41
Every new matcha consumer it's going to end up liking the
41:45
product isn't just buying it once, they might be buying it
41:48
once every two weeks for the rest of their life.
41:51
Think about how that compounds as we move from country to
41:55
country, region to region of people who are developing the
41:58
habit and the love of drinking this beverage.
42:00
So consumers are changing themselves and you have to ask
42:03
yourself, what does the competitive Moat for macho look
42:08
like in five years now that everyone's getting much better
42:11
educations on what's driving saving price?
42:14
The genie is kind of already out of the bottle in terms of the
42:17
knowledge that you need to ask the right questions to
42:20
understand what factors drive quality and therefore how these
42:24
products are priced. So what do brand owners need to
42:28
do now to be resilient in five years and give them a strong
42:33
business mode when consumers are forming preferences off of very
42:37
different sets of information than its organic ceremonial
42:40
grade, blah blah blah? Yeah, it's, it's very unclear.
42:44
And I feel like that the only way out is to figure out ways to
42:50
add more value into the product, not just marketing, but more
42:55
education, fresh milling or even blending or even like some other
43:00
ways of, you know, adding processing into the end product.
43:05
I feel like that's really the only way out.
43:08
If you look at how people are doing in coffee and wine, it's
43:13
the consumer mental model of a good and bad product will be
43:17
more and more clear in the future.
43:19
And if you are just keep recycling the same information,
43:23
people are going to get bored. And the only way to kind of a
43:26
bring in freshness into the consumer cohorts mind is to
43:31
figure out new ways of adding value.
43:33
Absolutely. I think the single greatest
43:36
opportunity within Mata in the next 5 to 10 years is not
43:40
literally marketing and repackage someone else's
43:43
product, it's actually participating in that products
43:46
creation. Imagine if the coffee industry
43:48
with just people buying like roasted coffee beans and
43:52
reselling them on right. It would be an extremely boring
43:56
industry. Now it's incredibly important
43:59
within matcha because the demand for matcha didn't warrant the
44:03
creation of people adding value on top of the system.
44:06
There weren't, if you go back 5/10/15 years, people were
44:10
worried, Oh no, are there even going to be enough people that
44:13
want to drink matcha to support the producers that are already
44:16
doing it? Right now we have the opposite
44:18
problem. And the biggest opportunity is
44:21
the fact that all of the flavor creation of these blended
44:24
products are controlled by old Japanese men that do not know
44:28
the preferences of a teenager in Saudi Arabia or a lawyer in Los
44:32
Angeles or someone working in tech in Hong Kong, right?
44:37
Consumers are just so different and it's so outside of your
44:41
experience. If you're a four formulator for
44:43
strawberry yogurt sitting in New York City and you're white and
44:47
you've only ever known American food, could you possibly be able
44:52
to create something that a young millennial consumer in Vietnam
44:57
would like? Like, probably not.
44:59
So like we need to get people closer.
45:03
We need to get the value add and these product transformations
45:08
that are driving these flavor profile outcomes closer to the
45:11
consumer from people, people who actually know and understand
45:15
what these people want because everything is predicated now on.
45:18
We need to tell you that this product is good.
45:20
And people ask what is the difference between a high and
45:23
low quality matcha? They need to be asking a very
45:26
different question. What flavors do I like in the
45:30
matches that I've had that I want to spend my hard earned
45:34
money on? And that's what I think is the
45:36
shift that's going to happen with this proliferation of
45:40
knowledge and choice throughout this value chain that it's not
45:44
going the the the business moats the way you could build a
45:47
sustainable business in the last 10 years looks very different
45:52
than it will in the next 10 years because of all of this
45:54
information change. I think that's just the reality.
45:57
And the people that don't adopt at the times will either remain
46:00
small businesses or get out competed by companies that are
46:03
adding value, creating better products, listening to their
46:06
customers and doing some optimizations and developing new
46:09
products for them, understanding new ways that people use it,
46:12
etcetera. And new blends that people like,
46:15
new cultivars that people will like, like bring them through
46:18
this rich journey. And this can happen in
46:20
incredibly sophisticated ways with, you know, master class
46:25
type, you know, workshops where you really get into the weeds.
46:29
But it can also happen in ways that are a little more silent
46:33
consumer that's not so interested in knowing the
46:35
details, but can certainly taste the difference between a matcha
46:38
company A and matcha Company B. And they like matcha Company B.
46:43
Maybe they don't know why, but that's they're going to vote
46:45
with their dollars on the thing that they enjoy more.
46:48
And it's probably matcha Company B that has localized their
46:52
product and understand what the preferences of their consumers
46:54
are versus someone just reselling a product that is
46:58
optimized for Japanese tea ceremony practitioners in Japan.
47:01
So I guess the real question is what is the price of not being
47:06
transparent in the next 10 years?
47:08
You know, there's really a lot of pros and cons in sharing
47:11
information or be more transparent for both a producer
47:16
or a brand point of view or from a consumer's point of view.
47:20
Because, you know, like the information can be misleading
47:23
and it can be even purposefully designed to hide something in
47:28
the product. And by the end of the day, you
47:30
know, the product, the taste of the product is the king.
47:32
And it doesn't necessarily correlates with how much
47:36
information you end up sharing about the product and.
47:39
Although for like a lot of these producers to get like the agency
47:44
and like literally like consumer preference data, I feel like you
47:48
need to have a group of specialty consumers first that
47:52
can tell you useful and objective information about what
47:56
people in that group of people like, right?
48:00
Like it's like way more impactful learning that someone
48:05
you know likes Oku Midori cultivar or Asahi cultivar than
48:09
it is learning that they like ceremonial great matcha.
48:12
Yeah, that's true. You know, like they what they
48:15
really like is Oka Midori or Asahi cultivar with fertilizer.
48:21
That's true. Without fertilizers, you know,
48:24
Asahi cultivar tastes very, very different, I tell you.
48:28
Spoken from experience, Yep. Yep, Yep, we recently tried.
48:32
Yeah. So or you end up sharing the
48:35
type of fertilizer you end up using on the label, but you
48:38
don't necessarily always get that piece of information from
48:41
farmers. So you really need to get the
48:44
farmers on the same page too for all of these, which can also be
48:48
very, very tricky because for what we have known about all
48:53
these politics with all these farmers, like in different
48:56
regions, they all the farmers work together pretty frequently
49:00
on processing on, you know, cultivations and packaging
49:05
frequently that they will be all gathering in one potential farm
49:09
or in front of the tension oven and telling each other, you
49:12
know, what can be optimized for this year's batch.
49:14
But one thing that they do held that they do hold a great secret
49:19
is fertilizer recipe. That's one thing that they do
49:22
not share with each other. You have the price of
49:26
transparency for all the farmers who are competing with each
49:30
other in the national tea competition is probably the
49:33
difference between a winning tea and a not with.
49:35
I bet they all taste pretty good, all these competition
49:38
teas, and the difference is probably really in the
49:41
subtleties. But it's a great point and maybe
49:45
that information will be available, maybe it won't be.
49:48
But without this group of well educated consumers that are able
49:52
to articulate what they like in objective terms, then all of
49:55
these matcha brand owners, it makes it much more difficult to
49:58
make any changes about what they should source, how they should
50:01
blend, what flavors that they should create.
50:03
So it's I think it's really important in an industry that we
50:07
can add value to because we don't want a bunch of consumers
50:10
that are basically schmucks, right?
50:12
Consumers saying that I love ceremonial grade matcha, right?
50:15
Like anyone in the industry is going to look down on that
50:19
person versus if they say I am like super into zai Rai matcha
50:24
right now. I love zai Rai matcha.
50:27
I like tasted one from this bazooka farmer that has 100 year
50:30
old plants and they're all Uji lineage zai Rai, not Shizuoka
50:35
lineage zai Rai. And I'm really all into that.
50:38
The way they that person would be viewed and the way they're
50:43
ability to articulate their preferences in objective terms,
50:47
you know they're going to get very different like levels of
50:50
how seriously they're taken and giving you useful information
50:54
about what they like and dislike.
50:55
True, true, true. And as more consumers in the
50:59
market starting to move into that direction, I feel like that
51:03
it will be a very, it will be a very critical thing that
51:06
branches learned from their consumers, what they like or
51:09
dislike. And having a shared vocabulary
51:13
will be very beneficial for communications for that matter.
51:17
Oh yeah. No, exactly.
51:19
It's it's it's a really interesting market right now.
51:22
There's some people that I want to invite on the show.
51:24
They're brand owners of tea house called Artifact in Paris.
51:29
They were, I believe they had the first commercial issue.
51:31
So that just arrived and I was talking with them and like they
51:36
work directly with their coffee shops and other tea shops that
51:39
they supply to their fresh milling matcha.
51:41
And what's super interesting about them is I don't think
51:43
they're super engaged in social media.
51:46
So like every time I talk with them and like, you know, I'm
51:48
referencing other brands that, you know, most people in the
51:51
industry have heard of like they like they did, they weren't
51:54
aware of it. So they're kind of unplugged
51:57
from all this online toxicity and from a lot of these like
52:02
probably way better for them. I'm a little bit reless
52:06
actually. But you know, talking with them,
52:09
they, you know, they're, they're not even thinking about all of
52:12
this debate because I, you know, I don't think they're exposed to
52:14
this on my world nastiness. They're like, yeah, you know,
52:17
we're, we're talking with all these coffee companies,
52:20
understanding what flavors they want to express understanding
52:23
all of these. They have like 8 different
52:25
cultivars right now that they're blending specifically to meet
52:28
the people, right? They have the agency of the
52:30
milling. They're able to source these
52:32
products and they're actively making things better, further,
52:35
further market and educating any client that walks in or any of
52:39
their clients clients in terms of AB to B about what makes
52:43
their products specifically special.
52:45
It's I think you're going to find a lot of like minded people
52:49
like that and I find what they're doing, it's so deeply
52:52
inspiring. That's what the industry.
52:54
Really needs and and that's really the magic of agency,
52:58
Ryan. I feel like you can really make
53:00
a difference from your own power, from your own power
53:03
reach. That's really different from
53:06
people without that and just being absolutely helpless in
53:10
many situations. How do I frame this?
53:12
And they're helpless, not because they don't want to help
53:15
or they don't want to make a difference, because they cannot.
53:18
And the availability of these agencies are incredibly rare at
53:23
the moment. Issue Usus or blending machines,
53:27
all of these are very large and expensive equipment.
53:31
And they also have a wait list. So I think solving that problem
53:36
in the future will really help, you know, a lot of these brands
53:40
to be able to get out from this turmoil, this quagmire.
53:43
Well, actually, and I think a lot of them are imaginary too.
53:47
Something that we touched on on one of my favorite episodes we
53:50
ever did, The authenticity Trap is that, you know, it's very
53:55
easy to tell yourself, Oh, there's people who dedicate
53:58
their entire life to tea blending and who am I to even
54:01
try to tea blend, right? Because like, it's like, it's
54:05
just ridiculous. It's like trying to become a
54:07
sushi master. Like there's really like very
54:09
specific steps, like you can't just automatically call yourself
54:12
a black belt in karate, right? It's like a very similar level
54:16
of like, I guess it's, you'd have to be very bold to make
54:19
these kind of declarations. But what's interesting is, you
54:22
know, I don't think just to use the nice folks over artifacts as
54:26
a as a wonderful case study, an example, you know, there's a
54:30
like logical inconsistency there.
54:33
And they're like, yeah, yeah, I because we were roughly talking
54:36
about this and like, yeah, tea, tea blenders in Japan are great,
54:39
but they have no idea what these consumers in France like.
54:42
And like, it's just so dead obvious, right?
54:45
So like we also fall into our own mental traps restricting our
54:49
own agency. And it's really not rocket
54:52
science. And also the product speaks
54:54
itself. It's, it's actually like, it's
54:57
probably a little bit difficult to, to, to kind of use this
55:03
framework. If we're talking about like tea
55:05
ceremony, which you do have a very specific framework of doing
55:09
things and you are getting judged by a very, very
55:12
complicated matrix. But for things is like, you
55:16
know, sushi or for things like, you know, martial arts for that
55:20
matter, like if you can end up creating a, you know, a market
55:25
winning product or if you can beat your competitor or your
55:28
your counterpart, you, you are the better one.
55:33
It's yeah. It's like in a fight, yeah.
55:37
It looks like Bruce Lee created this new martial art called
55:41
Jaquindo and he just kicked ass in the Chinese martial art
55:47
community. Like all of these generational,
55:51
you know, like martial art practitioners from other schools
55:54
are just worse in front of him. I feel like it the same kind of
55:58
like identical argument can be placed in, you know, the art of
56:02
creating matcha. If you end up creating a better
56:04
tasting product, you are the winner, right?
56:07
No matter how you do it, you end up creating something that
56:10
tastes good. And I think that should be the
56:13
only judgment matrix for this matter.
56:16
Yeah, that's interesting. It's like, you know, who did you
56:19
impress? Are you impressing the people
56:21
who are actually drinking it? Or did you impress the 10 judges
56:25
who are old Japanese men who 300 matches that day or 10 just that
56:30
day? You know, like which one do you
56:32
care more about impressing? And you know, they build
56:36
different type of capital. One builds social and and status
56:40
and symbolic capital. You know, if you win AT
56:42
competition, which then might lead to, you know, economic
56:45
capital through recognition and more sales.
56:48
Or do you just care about creating something that people
56:51
want who are outside of that group of people?
56:53
I think people in this industry have too much respect to be on.
56:56
I mean, there's a lot of people who don't have enough.
56:58
Let's let's make that very clear within the match of industry.
57:02
But there's a lot of people I think that actually have too
57:04
much respect and they don't realize that they're not
57:08
playing, you know? So like, quote, UN quote, in the
57:12
arena, in the boxing ring, it's a street fight.
57:16
Oh yeah. You're not doing it like all
57:18
that really matters and the rules that should matter is am I
57:22
creating something and delivering something to the
57:24
consumer that they actually want, not the fact that I won
57:28
this, that or this other thing. Why in the world we care about
57:32
the people? Like, if you really think about
57:35
it, you really zoom out the absurdity that is going on just
57:39
in general with a lot of all competitions for that matter.
57:43
It's like the Oscars, right? Like, the movies that win the
57:47
Oscars happen to meet the preferences of a very
57:50
sophisticated subculture, but they're not the movies that do
57:53
best at the box office, that inspire people to become better
57:57
people, like all the superhero movies do, or at the very least,
58:00
at least entertain people. So, you know, those have a much
58:03
larger impact on the broader stage.
58:06
Like, you can take a content creator like Mr. Beast and
58:08
criticize him all day for this, that or the other thing.
58:11
But the reality is people just like what he makes, like, what
58:16
are you like how you can judge him on all of these other
58:19
criteria. But like he brings so much
58:22
pleasure to people's day all over the world who watch that
58:26
content, which honestly, I think is a much more difficult thing
58:29
to do, building and growing new audiences rather than competing
58:33
in the same audience and in the same traditional system that has
58:37
existed forever. It's hopeless.
58:39
You can't do anything. There's no agency that you have
58:41
as an outsider from Japan to even try.
58:44
So we got to fight and find our own path and our own consumers
58:48
that, you know, have their own relationships with these
58:50
products built on a very different set of axes.
58:53
And if we don't tell them what those axes are and if they're
58:55
not even aware of what to ask for to get good product, someone
58:59
saying I want ujicha or I like ceremonial matcha doesn't tell
59:03
us anything really, because those terms are virtually
59:05
meaningless from an origin or from a quality classification
59:10
perspective. So a lot of ways this goes back
59:12
to what you were talking about before in the episode that we
59:15
recorded new culture creation and that the price of the price
59:19
of this transparency, one of the benefits of it is this new
59:23
culture creation. I mean, that's the price that we
59:25
all have to pay to create our new culture.
59:28
That's no longer, you know, you know, a few million tea ceremony
59:31
practitioners in Japan. It's represents the diversity in
59:35
all all humankind and all of the countries that now love and
59:39
enjoy matcha and are incorporated into their lives
59:42
every day. I think that's a much.
59:44
That's true. And also the, I guess the
59:47
interesting thing about this new culture creation is not new
59:51
culture creation, but new cultures creation is plural.
59:56
It's, you know, compare making the comparison of Oscar versus,
1:00:00
you know, all these box box house movies is almost like, you
1:00:04
know, like they can all exist within this framework.
1:00:08
You can have 10,000 different subculture groups exist in their
1:00:12
own bubbles in different countries doing very interesting
1:00:15
things that they found interesting or great, which is
1:00:18
kind of a future that I really like to see, but there's no
1:00:22
longer one. Judgement Matrix.
1:00:24
There are many. Each individual culture and
1:00:27
their community can very sustainably support their own
1:00:32
culture or their own taste. Absolutely.
1:00:36
I think that will be a very healthy future.
1:00:38
Much more healthy the people that create like Texas Chainsaw
1:00:42
Massacre too, right? Still need actors and studios
1:00:46
and film cameras and the agency to make this very nice sub drama
1:00:51
horror movie. And so do the people who make
1:00:53
like a French melodrama. You have all of these like
1:00:56
really contrasting different like subcultures and new
1:01:00
cultures that form that. When you look across these
1:01:05
cultures, there's probably a lot of cross cultural judgment, but
1:01:08
at least they can exist because they have the agency and the
1:01:12
tools and the equipment and the knowledge to do so and the
1:01:15
distribution channels. Now the ultimate, you know, the
1:01:18
awareness and distribution that's solved through the
1:01:20
Internet that you don't need to rely on old world systems for
1:01:24
someone to know that your product exists and how to get it
1:01:27
to them. We're really close to a world of
1:01:29
seeing like something much more similar to the specialty coffee
1:01:33
movement where you have real roast like roasters all around
1:01:36
the world having their own interpretation, their own point
1:01:39
of view, their own sourcing philosophy, and their own set of
1:01:42
sophisticated consumers that they can educate on different
1:01:46
aspects of what makes coffee interesting and deliver products
1:01:49
that they love. And we're very close to having
1:01:52
that world be for Matcha. I think we're like 1020 years
1:01:55
away from seeing what could be a flourishing culture of people
1:02:01
adding value on top of the system, creating better things
1:02:05
that people like, building very successful businesses in all of
1:02:09
these different markets, not just re selling a Japanese
1:02:12
product, so to speak. We're getting there, We're
1:02:14
getting there. Did you say 10 to 20 years?
1:02:17
Because that's how our new cultivar gets registered.
1:02:19
Maybe I'd love if we could have our hand in some of that.
1:02:23
That'd be super cool. I think it's a great place to
1:02:26
stop. If you enjoyed this episode,
1:02:28
please consider sharing it to Friend and we'll see you in the
1:02:30
next one. Thanks.
1:02:31
See you in the future.