Latest / Specialty Matcha Podcast / Show, don't tell

Transcript

Show, don't tell · Specialty Matcha Podcast

0:00
Hello and welcome to the Specialty Matcha Podcast.
0:02
My name is Ryan. This is Michael Hozunjun who
0:05
also goes by Sam. Hello, hello.
0:07
And we're the Co founders of Samco Matcha products.
0:09
We launched this podcast to discuss our learning journey,
0:12
matcha, share startup stories and interview experts, and
0:15
today's episode is titled Show Don't Tell and it's our case or
0:19
argument against top down position.
0:22
We thought it was really worthwhile looking at the way
0:26
that different matcha products are positioned.
0:29
What is their value, value proposition?
0:31
How is quality conveyed and communicated?
0:34
What makes it special? What makes it worth paying
0:37
$20.00 for, 40 or $60.00 for? And so you see all these
0:40
different types of like product positioning.
0:43
And this episode was actually inspired by a collaboration that
0:47
we're working on at the moment. I'm so a really good friend of
0:49
ours is a professor at the University of Wagoneggan, which
0:53
is one of really one of the top food and agricultural
0:57
universities really in the world, one of the top in Europe
1:01
and considered one of the best in the world.
1:03
And we're collaborating with a bunch of student researchers and
1:06
we had to put together decks to explain a research project for
1:10
them. And they're in the food
1:11
industry. And Zhongjin and I used to work
1:12
in product development and so kind of the intersection of
1:15
flavor AI and, and working with gigantic food and beverage
1:19
companies. So, you know, we're very used to
1:21
talking with food industry people and these are kind of
1:25
food industry people in training.
1:26
And it was a really interesting thought exercise.
1:29
How do we explain our research objectives and which I'll
1:33
explain in a second to a group who an audience that is coming
1:37
in with a lot of context, but very little context on matcha.
1:41
And we have two different student research groups which
1:43
are digging through literature and contacting experts.
1:46
And one is entirely focused on matcha is a fresh ground
1:50
product. What happens after matcha is
1:52
ground from a nutritional color and flavor perspectives.
1:56
And then we sent them in a couple different directions.
1:58
But we're really interested in what the industry would call
2:00
sensory or the organoleptic changes that happen to a product
2:05
after it's milled by how does how does the flavor degrade and
2:08
what are the mechanisms behind that flavor degradation?
2:11
So that's what one group's focusing on and the other group
2:14
is focusing on matcha as a specialty product.
2:17
So all of the intrinsic, it's a investigation into different
2:21
flavor profile and nutritional profile outcomes by the fact
2:25
that matcha is an agricultural product.
2:27
So how does anything from the cultivar to the fertilizer use
2:31
to the way that the tea is processed influence the taste?
2:34
And describing and contextualizing why that was
2:37
important to non matcha people was kind of a challenge.
2:41
Yeah. It was a very interesting deck
2:43
that you put together Ryan Hunt, and I noticed that you to really
2:48
forge a very interesting flow to try to inspire a curiosity from
2:53
people that don't necessarily know like a lot about matcha or
2:57
care about matcha to begin with. So can you maybe walk our
3:01
audience through like, how exactly was your thinking at the
3:04
time? Yeah.
3:05
So the core research, research objective that we gave them that
3:08
led to the topic of this podcast was that there's remarkably
3:12
little consumer education about what's driving flavor, aroma and
3:16
texture differences within matcha.
3:18
But consumers are not able to easily predict their own
3:22
preferences based on clearly labeled objective attributes
3:26
about the product. You see like really rich,
3:29
thriving specialty markets and things like wine or chocolate or
3:32
coffee. And it's pretty easy for an
3:34
experienced consumer to draw a straight line from, OK, this is
3:39
a washed processed coffee from Ethiopia, from Adido.
3:44
And based on all of my experiences, I can have some
3:47
idea of what that's going to taste like versus if it's a
3:50
natural processed coffee from Ethiopia, from, let's say, a
3:53
different region. I have some sense of, OK, you
3:56
know, one's going to be much more clean and ephemeral,
3:59
probably acidic. And the other is probably going
4:01
to be very complex, very fruity and almost these fermented
4:05
flavors. So we had to explain to them
4:07
that this concept doesn't really exist in matcha.
4:10
And so we had to go on to explain that there's a real lack
4:13
of transparency in traditional products.
4:16
And at the highest echelons of matcha historically are all
4:19
blended products with poetic names where things like origin
4:23
processing, cultivar, harvest season, harvest method, shading
4:26
method, shading duration, and milling technique are not shared
4:30
with the consumer. And I wanted to come up with a
4:33
pretty striking visual to communicate how people are
4:37
actually making making purchase decisions.
4:39
And on Canva, I found this fantastic graphic of three wine
4:43
bottles all with blank labels. That's approximately what we are
4:48
doing. Like imagine tasting all wine
4:50
blind based and basing your purchasing decisions on price
4:55
and by brand reputation. Like walking to a wine store,
4:58
imagine every single label is white.
5:02
Or is this basically nonsense which is like kind of the case
5:05
for an non Japanese speaking foreigner and it's also kind of
5:08
the case for a Japanese speaker? Japanese, like, they're
5:13
basically not that. They're not really getting like
5:16
any more information than you are.
5:17
Yeah, and it's a crazy world that we live in, considering
5:21
that's the highest echelons. It's all top down positioning.
5:25
And what we mean by top down positioning is you need to be
5:27
told what's good. So like, let's take this analogy
5:30
a step further. Imagine every bottle of wine now
5:34
says something like very good wine, top premium, best good
5:38
wine. Imperial grain, Imperial
5:40
fantastic wine. It's very confusing when you
5:43
have all of these labels of top down positioning where consumers
5:47
don't decide for themselves what's good.
5:49
I mean, they kind of are at the end of the day.
5:51
But from a market and positioning standpoint, it's
5:53
steeped in poetic ambiguity. Excuse the teapot.
5:57
And it's you're, you're really flying blind.
6:00
It's it's covered in mystery. A Mark from Olika is arranging a
6:04
trip right now to bring to enthusiasts, matcha enthusiasts
6:09
to Origin for a week. And I think they're going to Uji
6:12
and to Yame to visit with traditional producers.
6:15
And he made a really interesting point and it's that traditional
6:19
marketing and matcha both from these very historical legacy
6:23
brands and a lot of these newer companies that are entering the
6:27
scene trying to market matcha to the West, trying to steep it in.
6:29
The mystery and poetic names don't help you, the consumer.
6:34
You are not learning anything through the consumer assumption
6:37
of these products because they're hard to remember,
6:39
they're hard to pronounce, and they're you don't know what's
6:41
inside. You don't know what you're
6:43
drinking. And frequently they all share
6:45
the same name, like the very famous Hatsu Mukashi example
6:48
that we like to make. And it's the same name from
6:51
different company, different price tier and they taste
6:54
drastically different. Like how do you draw any like
6:58
knowledge from this experience? It would be very hard.
7:02
And The thing is that, you know, the traditional buyers for these
7:04
Bertie ceremony practitioners, they didn't necessarily care.
7:07
They weren't necessarily tea connoisseurs.
7:09
You talked to most people who study Chana Yu, they actually
7:12
don't know a whole lot about matcha.
7:13
They don't know a whole lot about the matcha that they're
7:15
buying. So we thought of a really, we,
7:18
we did 2 comparisons for them. One was a Maruq really high end
7:24
blend called Tenju, which we've also talked about on this
7:27
podcast. We love this product, tastes
7:29
fantastic. And I went online to their
7:31
website and tried to get as much information about this product
7:34
as I possibly could. And it's we've learned that it's
7:38
a prized winning matcha in the Japanese national tea
7:41
competition. We don't know like what place or
7:46
anything else about it when made from hand picked tea leaves.
7:51
OK, so it's Tizumi there. We use those words.
7:55
Please enjoy the distinctive koicha aroma and flavor
7:59
recommended for thick tea. Comes with the T's name printed
8:04
on the product box. And this this cost like 50 or
8:10
sixty U.S. dollars and that's all we know about it.
8:13
And I actually bought this product in person in Kyoto and
8:17
tried asking, what is this? Is it a psychic cultivar?
8:20
Is it honzu shaded? Do you run the mills slower?
8:24
Because again, even within when you run a traditional stone
8:27
mill, you there's a range and some of the highest end products
8:30
usually mill a little bit slower.
8:32
Nothing. I have no clue.
8:34
We enjoyed this product, but it didn't help us learn.
8:37
It didn't help us at. All it was really sad like this
8:40
is probably one of my favorite matcha in the world, especially
8:43
first day experience. The tea actually tastes
8:46
drastically different the next day we drink it Yeah out from
8:49
the can. But the first day wow this
8:51
beautiful like spicy olive oil notes that I just have never
8:57
experienced in other matcha before.
8:59
Yeah, and in effervescence is always sparkling.
9:02
How am I? Supposed to learn from this
9:05
product and maybe try to, I don't know, expand my consumer
9:09
experience landscape and try to find more product like this.
9:12
Like there's no way for me to to do that.
9:14
And the only way for me probably for the benefit of the brand is
9:18
that I go back and buy that product.
9:22
Yeah. But yeah, that's very sad.
9:24
Yeah, and there's a weird incentive system behind keeping
9:28
these products very, like, hidden or sheltered from a
9:32
transparency perspective. You know, if you go to ask a lot
9:35
of these players, like go to a live stream at Epodo that's done
9:40
in English and you can ask where is this tea from?
9:43
Like one of their new seasonal teas, Where is it from?
9:45
I think Cole was telling us this and Cole from my Matcha
9:48
addiction and someone had asked that in the Q&A and I said, I'm
9:51
so sorry. It's proprietary, can't tell
9:54
you. Confidential.
9:55
It's so sketch in any other like food application that would not
10:00
be an OK answer. I respect it, I get it, but it's
10:03
really actually kind of harmful for farmers to think about.
10:06
They have complete control what goes inside the quality.
10:10
No one's accusing them of cutting corners, but they could
10:14
and you wouldn't know to what degree it's proprietary is it
10:18
sounds more like protecting business interests.
10:21
Like who cares that someone knows what's in this blend?
10:24
Like do you think Ippoto and Harishi Shamayan are going to
10:28
turn around and try to recreate create it like these like the
10:33
people who are buying these top top products are like key
10:36
ceremony institutions and temples that have long standing
10:41
relationships with these blend houses.
10:44
Surely the only reason they're they're not buying this because
10:48
of the taste 100% like you know there there's other factors
10:52
here. So when you like look backwards
10:55
at the incentives of keeping the stuff a mystery, it's really
10:58
weird. And I think ultimately it just
10:59
gives them a whole lot of flexibility as they source
11:01
different tensha or if they lose suppliers or gain suppliers.
11:05
But it's taking away from what could be a really interesting
11:08
component. So we can learn, OK, where did
11:10
that flavor come from? Or at least try to learn where
11:14
that flavor came from so that we can buy more and support this
11:18
industry to find other products like it.
11:20
For all that we know, maybe like they bought some Narino from
11:24
from 4 ACC man who I think they're the only ones that grow
11:27
the Narino cultivar because it's registered under their name and
11:30
I don't think anyone else does. Maybe they buy a little bit of
11:33
Serino and mix it in at 50% with some asaki and boom you get that
11:37
flavor profile. That would be super interesting
11:39
to know. It's very interesting because
11:42
you know, you have to wonder why we end up having a traditional
11:46
matcha being like this. I think the problem is that they
11:48
are not responsible for daily consumers feedback.
11:53
They're responsible for their big purchaser from the temple or
11:57
from the big child youth schools.
11:59
They are responsible, responsible for their own brand
12:02
reputation so that they can win in competitions which are
12:06
dictated by a very handful of people that have their very
12:09
unique personal, I don't know criteria or taste.
12:14
So they, it's, it's top down positioning because their own
12:19
incentive is top down. They are being dictated from
12:22
someone even higher than them and they are not responsible or
12:25
care about, you know, consumers like us essentially.
12:28
Yeah, like cultural capital and where that soft power lies.
12:33
Like people like the Iyamoto, like interact with the royalty
12:37
when they come to visit Japan, like the Queen of England, for
12:40
example, Like they're really held to the highest echelons of
12:44
soft power and within Japanese society in general.
12:47
So it's the reverence is it's top down.
12:50
So here's the question, why do all of the new matcha brands go
12:54
to Amazon if you walk into Whole Foods?
12:56
And by new I mean like in the last 20 years.
12:59
Why do they also do top down positioning?
13:02
That's a good question. Why?
13:03
Like why is this idea of bottom up positioning or like giving
13:08
someone the context to appreciate something?
13:10
Why is that a new topic? Yeah, I don't know like my very,
13:16
I don't know evil suspicions is that it's convenient.
13:19
It's a convenient for the business to, you know, I, I
13:22
don't know disguise their actual ingredient list is convenient
13:26
for them to, you know, do marketing.
13:29
They don't need to necessarily spend a lot of time educating
13:32
consumers. It's convenient because there is
13:34
this huge historical inertia coming from traditional brands
13:38
that, you know, it has been like that for the past hundreds of
13:42
years. And this is the way of doing it.
13:44
This is the way that people used to this kind of status quo.
13:49
And why do we need to change? Yeah, well, I have a more
13:53
generous interpretation to I mostly agree with this, but it's
13:56
also that they're selling to an uneducated market.
14:00
But there's a difference between lack of knowledge, uneducated
14:03
and stupid, right? So just because you don't have
14:06
the knowledge does not mean that you are stupid.
14:09
And for a long time consumers did need to be told what was
14:13
good. They didn't know matcha was a
14:15
foreign product to them, right? Having different class tiers,
14:19
calling something ceremonial grade and giving some basic
14:22
stats that it's from first harvest or something, it makes
14:25
sense. But that will only work if you
14:28
are honest. If you are actually serving
14:31
something good and tag, give it a tack of that's, you know, a
14:35
good matcha. But that's not really the case
14:37
for a lot of nowadays, you know, matcha brands out there in the.
14:40
Market, yeah, everyone claims they're sourcing the best and if
14:43
everyone's doing the best, then no one is.
14:45
These things live on a spectrum. But now that it's more mature
14:49
and that people do know what different types of matcha are, I
14:52
think people, a lot of new matcha brands don't give
14:55
consumers more credit. It's like people in the early
14:58
days of the Internet thought who would want to read long form on
15:02
the Internet that something like The New Yorker like really long
15:05
form article goals or essays. People on the Internet, they
15:08
have short attention spans need to give them something quick.
15:10
No one wants to sit and read and they, to put it, I think someone
15:14
from Vox, one of the founding team of Vox and early Vox Media
15:19
journalist said that one of their founding tenants was that
15:23
they wanted to respect the intellectual capacity of the
15:27
reader and to give people a little more credit.
15:29
And that even though some of them might not be knowledgeable
15:32
on a topic, they're not stupid. And you can like explain in long
15:37
form what's good. And now you have like 5 hour
15:39
long podcasts where you go really deep and people are very
15:43
interested in it. Arguably a smaller niche, but
15:46
way too many of these new magic companies are thinking about
15:49
positioning from a complete beginner's standpoint where they
15:52
need to be told what is good. Calling something super
15:55
ceremonial grade and making distinctions that way or ultra
16:00
premium ceremonial grade means I have made the judgement for you
16:04
to tell you that this is good and I'm using these superlative
16:08
words like ultra or the superior etcetera in front of ceremonial
16:13
grade to tell you that this is better.
16:16
This is top down position. You are literally treating
16:18
consumers like they are stupid. Quite different than explaining
16:22
it's better because of XY and Z. You make your own determination.
16:27
I mean, this model has worked largely in Japan because of, you
16:32
know, the the brands that are doing so have hundreds of years
16:37
of history and credibility and they have the baggage to really
16:42
maintain their reputations. Not just, you know, for daily
16:45
consumers, but for people even higher up than them.
16:48
That's that that that they they are very much constrained or
16:52
being liable to all of that. But that's not necessarily the
16:56
case for a lot of the modern days.
16:58
So matcha brands, they don't necessarily have the baggage.
17:00
And because of that, people can literally claim whatever they
17:04
want and it's, you know, really a race to the bottom.
17:07
By the end of the day, you are trying to gain more margins by
17:11
claiming even higher, you know, hefty label for your product,
17:15
but doesn't necessarily you don't need to be responsible for
17:18
things that you put into the matcha cap.
17:21
And very convenient. Conveniently, people can borrow
17:24
the historical legacy of not doing, you know, transparent
17:28
label. And it's not a expectation in
17:31
the market to do so. Thus we are having, you know,
17:35
the matcha market that we're seeing nowadays, which is, you
17:39
know, really a mixed of, you know, good quality matcha and
17:42
really bad quality matcha. Yeah, and then they could all
17:45
labeled the same way. That they are all labeled the
17:48
same way, so or even with the same price tag, which is really
17:52
really ridiculous. And by labeled the same way, I
17:54
mean we're mostly talking about the the use of the term
17:57
ceremonial grade or different versions of it.
18:00
It's really a shame because it's unregulated.
18:03
So when there's enough crap that's the market, it really
18:07
becomes an unreliable marketing term.
18:09
So like maybe there was a good opportunity for this in the
18:12
beginning when it wasn't such a crowded space.
18:15
But now that anyone can nearly start their own matcha brand
18:18
overnight, there's tons of companies that would be very
18:20
happy to white label a product for you.
18:23
And then you can work with some distribution system, like a lot
18:26
of infrastructures in place to create e-commerce brands and
18:29
businesses. It's the barriers to entry are
18:32
so low now you don't really even need to speak Japanese to source
18:36
pretty good matcha and to create your own brand or even some of
18:40
the world's best matcha. We know a lot of people that
18:42
don't speak Japanese that can source incredible product now
18:47
and the now that the zone is flooded with really good and
18:51
really bad stuff and it's really hard to distinguish what is
18:54
what, this top down positioning for new matcha companies isn't
18:57
going to work. It's no longer a real leg of
19:01
credibility to stand on, right? Like these giant blend houses
19:05
have tremendous credibility of multi generational hundreds of
19:09
years of existence and like these new players are trying to
19:13
project credibility under their product because they've been to
19:16
Japan and they visited the farmers and touched the soil.
19:20
Yeah, yeah. I mean, like if you really do
19:22
care about the quality of your product, like you should stop
19:25
doing it. Like this is really not even for
19:28
your brand's benefit. Like you are not making yourself
19:31
send sending out from all of these crap being sold in the
19:34
market, ditching that idea and move to transparent labeling,
19:37
moving to storifying your brand and your product, moving to not
19:42
treating your consumer like stupid.
19:44
I think it's really for the benefit of our of people in the
19:49
Marshall industry. Yeah.
19:50
And the title of this episode is show, don't tell.
19:53
And it's really a kind of a call to action.
19:56
If we move away from positioning where we're telling consumers
19:59
what's good versus showing them what's good, it's a much
20:03
brighter future. Solid.
20:06
Yeah, much more solid foundation to stand on because you have
20:10
knowledgeable and smart consumers who are making good
20:14
purchasing decision. It will create the self
20:16
correcting mechanism that the bad matcha companies selling
20:20
crap at a high price are going to go out of business and the
20:24
people who are actually sourcing good product are going to do
20:27
well at a fair. Price Yeah, yeah, yeah.
20:29
The, the, really the, the key problem here is that matcha is
20:34
something that eventually you are going to put into your mouth
20:38
and you can taste it like it's a verifiable fact.
20:41
And for any claims like you can fool consumer once, but you
20:45
cannot fool them twice. They have their, you know, they,
20:47
they, they, they can make make their own decisions by the end
20:49
of the day. Yeah.
20:51
So Zhengji, what do you have to say for new brands that want to
20:54
keep it because of SEO or search engine optimization or because a
20:58
lot of consumers will walk into a place and ask for ceremonial
21:02
great matcha? I had a very interesting
21:05
experience waiting in line at MTCH.
21:08
There was this couple. There weren't a couple.
21:10
I think it was this guy going on a date with a woman at one of
21:13
the MTCH locations in in Thailand.
21:15
And this guy obviously kind of wanted to show off that he knew
21:18
a little bit about matcha. And so the first question he
21:21
asks when he goes up to the counter is do you guys serve
21:23
ceremonial grade matcha? I think the person behind the
21:26
counter working people at MTCH are so ridiculously well
21:30
trained. You could tell she thought for a
21:32
moment, is this like a Congress that I want to have?
21:36
And she was like, no, yes, it's all ceremonial grade.
21:39
Like it's all this is an idea already in consumers mind.
21:43
So actually it's more top down kind of almost condescending
21:47
education reversing this trend. But she had two choices there
21:52
with that customer interaction. So you could just say yes.
21:55
And it's actually kind of truthful to the intentionality
22:00
of what he's asking. They like he the answer is kind
22:03
of yes, even if they don't want to use that label.
22:05
And actually I've never seen MTCH use the term ceremonial
22:08
grade. I assume they take a very
22:10
similar position to us than that, but I'm I'm not sure.
22:13
Or she could say. I'm sorry Sir.
22:14
Actually ceremonial grade is a made-up marketing term.
22:18
It just is not a pleasant conversation to have.
22:20
Yeah, because you're basically now calling him misinformed and
22:23
you need to, he needs to be re educated in some way.
22:26
So like, what do we do about situations like this?
22:29
Yeah, it's, it's tricky. It's tricky, but you know, like
22:33
on one end, the the term term ceremonial grade is a total
22:36
made-up term, but on the other hand, you know, it's a totally
22:40
valid term. Like basically all much of the
22:43
worth serving in a WUSA forum is in fact ceremonial grade.
22:47
They're like you can use it in a tea ceremony.
22:49
Basically, that's what it's implying.
22:50
And I don't think that, you know, like it's necessarily to
22:54
calling out consumer you're saying something wrong, but you
22:57
know, it doesn't also necessarily hinders you from,
23:01
you know, telling them more about this much.
23:03
Yeah, this is really not. That's true, conversation
23:06
blocker. Yes, you can say yes, it is
23:09
ceremonial grade. In fact, we think it could be
23:12
even better. This comes from Asahi cultivar.
23:15
This one was handpicked to Zumi. It has delightful notes of
23:19
creaminess in umami. You get it as a light brute.
23:22
Amazing. Whereas like here Sir, here's
23:24
another option, also something that you know people would call
23:27
ceremonial grade. It's a yame matcha.
23:29
It's Oku Midori, which is really known for its bright green
23:32
color. And these roasted nifty toasty
23:34
notes in a latte format are really going to stand up.
23:37
You're going to get a lot of chocolate expression and it also
23:40
has a little bit of bitterness, but we think it really
23:42
complements that. No, these types of conversation,
23:44
you're right. Just because you're using
23:46
ceremonial grade does not mean that you don't have to be non
23:49
transparent. And these two things can
23:51
coexist. Although ceremonial grade or any
23:56
of the other versions of ceremonial grade are, even
23:59
made-up versions are a form of giving yourself your own grade
24:04
quality assessment. So it's still quite meaningless.
24:07
But you're right within the consumer education level, and I
24:10
actually think the pendulum is going to swing back a little
24:12
bit. I think being called not using
24:15
the term ceremonial grade is going to become the new fashion,
24:18
the new trend and actually a distinction of quality.
24:22
Well, you're implicitly communicating quality by like
24:27
positioning that like Mark from Ouika does.
24:29
If you go to his website, what does he have here?
24:32
12 different attributes for like every product ranging from
24:35
cultivar, vintage, shade, style, picking style, duration, harvest
24:40
time. This is implicit.
24:42
You can look at this and everything about this screams.
24:46
This is an interesting product with verified provenance and a
24:50
whole lot of tension to detail. And the vendor is proud of this
24:53
product, like it's a very subtle form of confidence.
24:57
I am proud of telling you everything about this product.
25:00
And you are feel free to, you know, verify those facts and
25:04
feel free to experience and feel free to make your own decision
25:06
if you like this product or not. And he knows all that
25:09
information. Now being like working in the
25:12
industry, you realize that it's possible that a lot of these
25:16
matcha brands in the West or let's just say outside of Japan,
25:19
the reason they might not have this level of details, they just
25:21
might not know. Yeah, they just really don't
25:23
know. It was really interesting
25:25
experience in some of the, you know, old legacy tea house that
25:29
we wanted to experience in Wuji and you know, like the vendors
25:34
in the shop, like we can tell like the person really just
25:38
don't know about the information of the question we are asking,
25:41
like they are not getting trained with those information.
25:45
It's very interesting. It's institutionalized even
25:48
within their own organization. Yeah, that's interesting.
25:51
People within the companies, these traditional blend houses
25:54
don't even have the knowledge to ask the right questions.
25:57
So that knowledge lives upstream and like this does not permeate
26:02
downwards. So it's very top down.
26:04
But so is all this Japanese Society of no surprise that it's
26:07
like that even when you do get some transparent labeling
26:10
details. We were visiting some people and
26:12
they were like, yeah, everything shaded 20 days, every 20 days,
26:15
20 days, 20 days. And the back of my head, I'm
26:18
thinking really exactly, everything is exactly 20 days,
26:24
not 21. Because I said an average
26:26
statement. Like I really am quite skeptical
26:30
of some oversimplification and I it, it, it's interesting because
26:34
all of these specialty components, like how long was
26:37
shaded or cultivar used to be like details that are abstracted
26:40
so far away from the consumer. And like, I mean, these, a lot
26:44
of these companies, even if they have anyone to deal with
26:46
foreigners that like foreign sales department is very new
26:50
relative to, to the age of these companies.
26:53
So like there's still quite a bit of of this type of
26:57
knowledge. It's like even I remember
26:59
someone saying that some like industry insiders who are in the
27:03
English speaking world, even like 5-6, seven years ago, they
27:07
were like, why does anyone want to know what the cultivar is?
27:10
Who cares? It's interesting, these
27:12
different perspectives. I admit the you know, the
27:15
demands of consumer knowledge we'll find eventually cascade
27:19
down back to Japan. You are seeing, you know, these
27:22
old Japanese tea houses using new marketing term or, you know,
27:26
embracing the the fact that a lot of their products are, you
27:28
know, in fact good with latte. You don't, you wouldn't expect
27:32
that to happen for in the past, but nowadays you're seeing them
27:34
more and more. And I think that's really want,
27:38
I would say, phenomenon that we are seeing nowadays that you
27:40
know, the foreign demand, the foreign market is pushing their
27:44
own influence back to the homeland of Matcha.
27:47
Yeah. And putting on these specialty
27:49
principles and a lot of these newer matcha companies that are
27:53
created by outsiders, by non Japanese, including US, right.
27:57
Or from a future positioning standpoint, I think the future
28:01
lies only with showing, not telling because no one has a
28:04
credibility like the stand on like the traditional players.
28:07
And it's very undifferentiated now to call yourself super ultra
28:12
premium or whatever your made-up grade is like every like this,
28:16
all of them. And I don't want to call anyone
28:17
out because a lot of people have like very specific ones.
28:20
Although I there was one recently that was extra
28:22
ridiculous. I think it said someone was
28:25
messaging me on Instagram about it, a company that has something
28:28
called s s grade. I spent quite a bit of time on
28:31
their website trying to figure out like one.
28:34
What does s s stand for and what is it and like?
28:40
I'm sure it's not a European brand.
28:42
No, I think I think they need to take a World War 2 history
28:46
class. I don't think we could get away
28:48
with calling anything s s. Great.
28:50
Well in their defense, they probably got the idea from the
28:52
gaming industry. For some characters you can have
28:55
like S level, S S level, S, S level, S S triple, S level is
29:01
usually the highest and that's my guess.
29:03
Interesting. Well, apparently it was made by
29:06
a collaboration of like a tea master.
29:08
And they didn't say even which school.
29:10
And is this guy an earth sink, a tea practitioner or Mota sink, a
29:14
one of the more obscure samurai schools didn't say that's
29:17
already a little bit of a red flag and a multi generational
29:21
tea farmer. So these two people got together
29:24
and made-up this new, or I think it's an organic grade that
29:29
they're giving themselves called s s.
29:31
There's like tons of stuff out there like that.
29:34
And like how like it, it's actually creating knowledge
29:37
structures and attempts at classifications that are giving
29:42
consumers the wrong mental framework to navigate them,
29:46
right? That is a very arbitrary, quote
29:49
UN quote label or like truth for a consumer to navigate.
29:53
Whereas like other pieces of information like cultivar and
29:56
artist method can really act as very tangible, very objective
30:02
waypoints for consumers to navigate the market and to
30:06
triangulate what they like and what they don't like and to
30:10
determine value. Really, Yeah, yeah.
30:12
Cuz like those factors are you know, ground truth, they're
30:15
verifiable ground truth that is universal, right.
30:19
It's trans brand. You can you know use that
30:23
knowledge across all the commercial products in the
30:26
market. Whereas for these made-up
30:29
classification system within the brand at its best, you will
30:33
probably be only working within that threat.
30:36
And for you to be able to use any, you know, experience or
30:39
knowledge from, you know, embracing that classification
30:44
system, you are not going to be able to easily apply to it.
30:47
Anywhere else you have two intentions behind these
30:49
different classification systems.
30:51
So there's intra brand classification and inter brand
30:56
classification. So most of these people only
30:59
have one or two matcha products. They call them all ceremonial
31:02
grade, super ceremonial grade, premium ceremonial grade.
31:05
Pick your adjective and that's basically all they sell.
31:09
Is it that? And then maybe they have one
31:10
like really low level 1, but like otherwise, like the
31:13
majority of their portfolio and probably the majority of their
31:16
volume is through quote UN quote ceremonial grade, which is an
31:19
attempt or super ceremonial grade, which is an attempt to
31:22
make inter brand distinctions amongst other competitors.
31:26
But there's also intra brand or marketplace levels or
31:30
hierarchies. But actually I find much more
31:32
useful. So someone like Ian from You
31:34
Know Me, if you go into the You Know me website and look at the
31:36
match offering, they have like 7 different grades including
31:40
ceremonial, heritage, imperial. These a bunch of different
31:43
words, but they have a wonderful little like fact page and like
31:48
exactly breaks down what they mean at each level.
31:52
So like that they're using that as a label to describe different
31:56
matcha products within their portfolio of dozens of matchas.
31:59
Like that is useful seeing heritage on their website.
32:02
I think, OK, this is probably handpicked and maybe even Kazumi
32:06
or at the very least you have raised shading beds so they're
32:09
not directly touching the leaves.
32:11
And I forget the rest of their distinctions.
32:12
And like imperial grades one lower, but they use a lot more
32:15
industrial methods and you just keep going down and down and
32:18
down. And the price is pretty well
32:20
related across all of these grades.
32:22
Kind of makes sense. Like once you learn that system
32:24
and you're within that little ecosystem, it's incredibly
32:27
useful. But then comparing, you know,
32:30
one of their ceremonial grades against someone else's, right?
32:33
Like it's then it's another roll of the dice like because
32:36
everyone defines ceremonial grade different.
32:39
So this inter versus intra brand in the utility of these
32:42
classifications can change because the way people define
32:45
them often are to differentiate themselves from other brands,
32:48
not from other products within your portfolio.
32:51
It's not that many people are selling dozens of Macha skews.
32:54
Really by the end of the day, you know the information about
32:58
each product, it's what it really matters.
33:00
And really for you, is it really necessarily for you to create a
33:05
label tier system like you know, using price as a reflection I
33:10
think would be really good enough and.
33:12
You don't think you could sell high end Napa Valley wine by
33:15
just calling it premium wine? Yeah, I mean like you know,
33:19
it's, it's very easy to tell like the tears of your product
33:23
by the price tag alone. And for all the other
33:26
information you need is you know what exactly goes into that kind
33:29
of matcha. Yeah.
33:31
I mean, with the end of the day, we really want a group of
33:33
consumers that's a quote UN quote better or good consumer
33:37
where the connoisseurship market, which and I'll put like
33:40
that sounds very Foo Foo and elitist.
33:42
But what what that really is is it's a group of people willing
33:46
to pay higher prices for a better thing.
33:48
So that's what this is. It's the specialty market.
33:50
It's very important that they can predict their own
33:52
preferences and putting up these false classifications and
33:55
creating top down positioning and assuming that everyone needs
33:58
to be told what's good and what's not good is probably not
34:01
going to be a winning strategy anymore.
34:03
Yeah, kind of makes sense within the context of a very new Fresh
34:07
Market where there's not a bunch of people in it and there is a
34:10
lot of crap floating around. Yeah, label on ceremonial grade
34:13
that probably at one time actually kind of meant
34:16
something, not by the words itself, by like reflected in the
34:19
quality of matcha that was actually available.
34:21
That's gone. It doesn't mean anything.
34:23
It's an anti indicator at this point because it's a self
34:27
declaration of quality and you have a mixture of vendors that
34:31
are sourcing very different quality products and taking
34:34
advantage as they should like show me the incentives and I'll
34:37
show you the results. Try to get a higher price for a
34:42
mediocre products. We don't want to see the
34:44
industry like that in the long run.
34:46
And we really think that, putting it very crudely, that
34:49
this type of top down positioning assumes that
34:53
consumers are stupid. We understand why the large
34:56
players do it because it's poetic, it's ambiguous, it's
34:59
serving a different clientele. Historically.
35:02
It's this wonderful cultural artifact of Japan, like they're
35:05
not going to change. They could be more transparent,
35:07
but the the top down positioning is a very Japanese thing.
35:11
But they have the credibility of hundreds of years and all this
35:14
cultural capital. But all these new incoming
35:16
players don't. And as the playbook of a
35:19
successful new magic company, we think are people that are
35:22
creating smart and knowledgeable consumers.
35:25
And consumers are getting more knowledgeable.
35:28
And as the industry all grow together and as the market
35:32
getting more and more mature, people who are still reluctant
35:36
to make any changes will eventually be, you know, ditched
35:40
by the consumers. It's really the earlier you
35:42
embrace this trend and embrace the weight of treating your
35:46
consumer correctly. I think it's really for our own
35:49
benefit. Yeah, everyone both in industry,
35:53
at the vendor level, at the farmer level and at at this
35:56
level. And when you're giving super
35:57
transparent information, think about what that does to Japanese
36:00
farmers now. Like some of them reach like
36:03
superstar status or they've grown huge followings of people.
36:07
And it's kind of nice for the consumers as well because then
36:11
they can price triage. If you're getting Asahi call to
36:14
Varmacha from Sutton Garden from Suji San, for example, right?
36:18
I can think of at least six different vendors that I can
36:21
check the price of. And then it's going to create
36:25
incentive for people doing things to raise quality, right?
36:29
Am I willing to pay $10 extra to have fresh milled Asahi from
36:35
Suji San? Yes.
36:36
Yeah. But am I willing to pay $10 more
36:39
when some other vendor who's sourcing from the exact same
36:41
person, exact same cultivar? No.
36:43
So actually it's going to be good for consumers because it
36:47
should lower price for bad quality products because they
36:51
can price compare and shop around and like are able to make
36:55
some sort of value judgment based on the label.
36:57
And they can also it's going to encourage innovation at the
37:01
vendor level who can do more value added service such as
37:05
milling it fresh, giving a fresh guarantee.
37:08
But maybe they just have fantastic customer support or
37:11
very key shipping, shipping or education.
37:14
It's going to make a lot more competition.
37:17
It's going to lead to more dynamism within the space.
37:19
Yeah. And eventually this superstar
37:22
status of, you know, a couple of farmers will, you know,
37:25
eventually being translate to all the other farmers out there.
37:28
There's so many farmers in Japan that are making fantastic tea.
37:32
And a lot of them are just, you know, being really tight to
37:36
maybe one or two, you know, repeat fires from the region.
37:41
And they have to really sell their tea at a very, very low
37:44
price and not be able to make enough living.
37:46
And being able to, you know, utilize this and cascade the
37:50
influence down to those farmers. I think it's a really wonderful
37:53
future for the Japanese tea industry as a whole.
37:56
Can create a playbook for others to copy right.
37:59
They're really, it's fantastic for the amount of like agency
38:02
and recognition that these farmers can get from their work
38:05
versus selling it wholesale. And it gets put into some like
38:08
like crazy poetically named blend.
38:10
Like no one knows they don't even know where their products
38:14
are going. And The Dirty secret of the tea
38:17
industry outside of Japan is that there's not that many
38:20
matcha and tensha suppliers willing to deal with foreigners.
38:24
So The Dirty secret is that everyone's basically sourcing
38:26
from a very small set of producers.
38:28
Everyone's sourcing from the same people more or less.
38:31
And there is a huge incentive for not giving all of this
38:35
information where you can figure out where someone's sourcing
38:38
from because then you can do your own price arbitrage as a
38:41
consumer. And that's why, no, also,
38:43
there's a huge incentive not to give this away, but it's really
38:47
not in favor to anyone except at the vendor level.
38:51
Even with the new transparent brands that are out there, you
38:54
don't have to spend that much time poking around different
38:56
people's website to start pattern matching.
38:58
It's like, oh, interesting, I've seen this thing before.
39:01
Oh, I've seen this award and it's from the same place.
39:04
Has this been shaded the same number of days?
39:07
That's what this other person is selling.
39:09
And then you can use some price arbitrage as a consumer.
39:12
So hopefully help bring down the price and closer align it to
39:15
preferences and much quality. Yeah, moving forward, you know,
39:19
it is easy for you to open a new matcha brand and start sourcing
39:23
from, you know all these already English speaking vendors or
39:27
farmers in Japan selling you a pretty high quality matcha.
39:31
But you know, it's won't be the future moving forward, like
39:34
moving forward for more value adds, for more interesting
39:38
matcha market, for better for everyone product out there.
39:42
There are so many other, you know, tea farmers in different
39:45
regions making excellent quality matcha.
39:48
We, I guess the call to action is get out from the comfort
39:51
zone, go venture, go explore and show the world how good the
39:56
Japanese matcha can be in other regions, not just in Wuji.
39:59
So don't tell. Yeah, so don't tell.
40:02
And and you know, there's a lot more farmers that can be very
40:05
directly supported if there is like a less risky bet to make by
40:10
selling your tea to not a wholesaler, but to random
40:13
foreigner who shows up on your doorstep wanting to make matcha
40:18
and start their brand. Yeah.
40:20
I mean, it is a very new industry for us as a foreigner
40:23
outside of Japan, but this industry is going to stay and we
40:28
have our own reputation to Caribou about and to build in
40:32
the future. It's time to show the Japanese
40:34
tea farmers that, you know, we care and we are going to come
40:37
back next year and keep buying new tea and keep, you know,
40:40
showing the world how good your tea is.
40:42
And showing how much other people are are loving it.
40:45
Yeah, You know, you're showing up with real data, not just
40:48
telling farmers, Oh yeah, people love matcha people love your
40:51
product. You can really show wow, like
40:53
this consumer review, like really appreciates the specific
40:57
vegetal note from this Oku Midori that you made more like
41:01
really love the olika aroma from this Sansu Asahi that you made
41:05
really show this deep level of appreciation.
41:08
So across the whole industry could benefit quite a bit from
41:10
not doing top down positioning, but where you're really showing
41:14
it. So that's the the single thread
41:16
of this episode. Show don't tell.
41:18
We're excited as we're doing our sourcing.
41:20
We're exciting to see all the new matcha companies come onto
41:23
the scene. We're by no means the first
41:25
people doing this and any consumers listening, please
41:28
support these new brands who are taking quite a risk at changing
41:32
their product positioning from what was in a very established,
41:36
predictable playbook of steeping it in mystery and poetic
41:39
ambiguity to really exposing the matcha for what it is and all
41:44
the objective truths about it and giving context to make your
41:48
own quality judgement. So it's, it's a future we're
41:51
very excited about. So sure, if you enjoyed this
41:55
episode, please consider sharing it's friend and we'll see you on
41:58
the next one. See you in the next episode.
42:00
Take care.