MatchaBar rides booming beverage craze, reaping $8 million in star-studded energy drink launch
- MatchaBar, a Matcha cafe founded by brothers Max and Graham Fortgang has launched a Matcha energy drink called “Hustle”.
- The company closed a $8M Series A funding round led by NFL MVP Von Miller and DJ Diplo.
The worlds of professional sports, music and business coalesced this week, as a new entrant into the beverage market cashed in on the booming demand for sports drinks.
MatchaBar, a Brooklyn-based cafe that offers up drinks made from matcha — an antioxidant-rich green tea popular in Japan and gaining a foothold in the U.S. — closed an $8 million funding round that included bold-faced names like Denver Broncos linebacker Von Miller, and record producer DJ Diplo. Hip hop star Drake is known to be a big fan of the brand, and last year invested his own money in MatchaBar.
The company, which uses ready-to-drink bottles that hold a ceremonial-grade tea sourced from a family farm in Nishio, Japan, launched their first energy beverage called “Hustle” this week. The marketing campaign included an online game where consumers can gift friends a a can of “Hustle,” which will be available at retailers such as Whole Foods, Key Food and Food Town.
Launched by brothers Graham and Max Fortgang in 2014, MatchaBar beverages are gaining popularity amid a consumer shift away from sodas and other sugary drinks, especially among health conscious millennials.
Growing up, the brothers spent time at their aunt’s house in Vermont and fell in love with the concept of an ice cream shop. They used the model as inspiration to build a community rather than just a product.
Fast forward several years, and MatchaBar’s product has just crossed the 1 million sold mark.
“When MatchaBar opened, it was the first matcha cafe in the country. We found matcha by chance looking for an alternative to our caffeinated consumption,” co-Founder Graham Fortgang told CNBC in an interview.
“It was a tough cycle, there were ups, there were downs,” Fortgang said, adding that he was looking to disrupt the current market of energy drinks, some of which are less than beneficial to consumers’ health.
“I got to a point where I decided I don’t like the way these products made me feel in a world where I can go to Sweetgreen for a salad, go to Equinox or a Pilates class instead of lifting dumbbells,” he added.
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Like coconut water
The traditional way of making Matcha is a painstaking multi-step process, which raises the question of how the company can successfully mass-produce a beverage that’s rooted in Asia’s centuries-old tea culture.
For now, Fortgang is hoping to bridge the gap from old to new with lots of social media-savvy marketing flourishes. From catchy slogans with each flavor like “Apple Ginger Matcha can win an argument in 140 characters or less” or “Original Matcha has been gluten free since the year 1204” to selling their product at music festivals, the product is geared towards the coveted under-40 demographic.
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And overall, Americans certainly love their tea: According to data from the Tea Association of the USA, the beverage is second only to water as the most widely consumed bottled beverage, and is found in almost 80 percent domestic households. Last year, U.S. consumers chugged down over 3.8 billion gallons of tea, the association said.
“It’s not a nonexistent market, we’re not the first to bring it here,” Fortgang said, citing the explosive growth of coconut water and Kombucha in the U.S. “These were all brought over from other cultures, they weren’t invented in the last five years,” he added.
“For young millenials, we wanted to offer something that spoke to them from a marketing and a health standpoint,” said Fortgang.
According to figures from Foursquare, the location technology platform, nearly 500 venues that serve matcha or are dedicated matcha cafes have opened in the U.S. since 2016. In fact, the number of matcha-related businesses has more than quadrupled in 2017, compared to the number of matcha-related businesses in 2014, Yelp data provided to CNBC showed. Meanwhile, taste for the beverage continue to skyrocket, especially in major cities like San Francisco, New York and Los Angeles.
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