Costa Coffee And The Matcha Market: Why Did They Miss The Millennial And Gen Z Drinkers?

Shawn

3 min read

Post on Aug 31, 2025

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Costa Coffee and the Matcha Market: Missing the Millennial and Gen Z Mark?

The vibrant green hue of matcha lattes has become synonymous with trendy cafes and health-conscious consumers. Yet, despite the matcha craze sweeping the globe, Costa Coffee, a giant in the UK coffee market, seems to have missed a significant opportunity to capture the hearts (and wallets) of millennial and Gen Z drinkers. This begs the question: why did Costa Coffee stumble where independent coffee shops and even fast-food chains have thrived?

The Rise of Matcha: A Millennial and Gen Z Craze

Matcha, a finely ground powder of specially grown and processed green tea leaves, has transcended its niche status to become a mainstream beverage. Its association with health benefits – rich in antioxidants, purported to boost energy and focus – perfectly aligns with the values of younger generations. This demographic, highly active on social media and driven by trends, has propelled matcha's popularity through Instagrammable photos and enthusiastic online reviews. Independent cafes, quick to recognize this trend, incorporated matcha into their menus, offering inventive variations and attracting a loyal following.

Costa Coffee's Missed Opportunity: A Case Study in Market Understanding?

While Costa Coffee has introduced matcha-flavored drinks, their approach appears to have lacked the innovation and marketing savvy necessary to truly engage millennial and Gen Z consumers. Several factors contribute to this perceived misstep:

• Limited Menu Innovation: Compared to competitors, Costa's matcha offerings seem relatively basic and lack the creative flair that younger consumers crave. Think unique flavor combinations, visually appealing presentations, and Instagram-worthy options – features readily apparent in the menus of smaller, independent coffee shops.

• Lack of Targeted Marketing: Effective marketing campaigns are crucial for reaching specific demographics. Costa's marketing efforts haven't effectively targeted the millennial and Gen Z audience with messaging that resonates with their values and preferences. They haven't leveraged social media influencers or engaged in the kind of online conversation that drives trend awareness.

• Pricing Strategy: The price point of Costa's matcha drinks may also have played a role. While Costa is known for its relatively affordable coffee, their matcha offerings might be perceived as overpriced compared to similar offerings from smaller competitors.

• Ignoring the "Experience": The younger generation values the entire café experience, from ambiance to presentation. Costa, while comfortable and reliable, may not offer the same "Instagrammable" aesthetic or unique atmosphere that draws millennials and Gen Z to independent coffee shops.

Lessons Learned: Adapting to the Changing Landscape

Costa Coffee's perceived failure to fully capitalize on the matcha market highlights the importance of adapting to evolving consumer preferences. To regain relevance with younger demographics, Costa needs to:

• Enhance Menu Creativity: Introduce more adventurous matcha-based beverages, collaborating with influencers or even running limited-time, trend-driven specials.
• Improve Marketing Strategy: Invest in targeted digital marketing campaigns that connect with millennial and Gen Z values, leveraging social media and influencer marketing effectively.
• Refine Pricing Strategy: Carefully consider the price point of their matcha drinks, ensuring they remain competitive within the market.
• Elevate the Customer Experience: Enhance the overall café atmosphere to be more visually appealing and Instagram-friendly.

Conclusion: It's Not Too Late

While Costa Coffee may have missed an initial opportunity, it's not too late to reclaim its position in the competitive matcha market. By learning from its perceived shortcomings and adapting its strategies, Costa can still tap into this lucrative market segment and attract a younger, trend-conscious clientele. The key lies in understanding and responding to the unique demands and preferences of millennial and Gen Z drinkers. The future of the matcha market, and Costa Coffee's place within it, depends on it.