The worldwide appetite for matcha, a finely ground green tea powder that’s a key ingredient in traditional Japanese tea ceremonies, has boomed. This unprecedented demand has upset supply chains, led to soaring prices, and put tea producers and retailers on high alert. Matcha’s popularity is at an all-time high, especially in the West. Some industry insiders are raising alarm that if these shortages carry on, we may be setting ourselves up for long-term issues.
Masahiro Nagata, co-owner of Matcha Tokyo, told the BBC about the impact on matcha producers. “Low quality matcha is selling for a high price, and we think that this will no longer be a viable business,” he stated, indicating the struggles small businesses face amid rising costs and limited availability.
In Japan, where COVID-19-related order delays are putting her supply at risk, tea master Rie Takeda keeps close watch on her matcha inventory. She emphasized the importance of matcha in Japanese culture, stating, “It’s a gateway for more people to know about Japanese culture.” Escalated demand for matcha has brought throngs of tourists to locations such as Chazen, an international tea ceremony chain with outposts in Tokyo. Within the past year, Chazen has doubled their roster of clients!
Kyoto—including nearby Uji—is well known for producing around a third of Japan’s tencha, the raw material for matcha. A string of record-breaking heatwaves are slashing regional crop yields. These weather extremes only add to the stress on production, worsening the already present shortages.
With matcha prices increasing by about 30% this year at Chazen’s retail locations, the tea industry has a steep hill to climb. Lauren Purvis, the owner of Mizuba Tea Co., echoed that concerning trend. Her customers are going through their month supply of matcha in just a few days! In early July, she began to see an increase in orders above 70%. This led her to testify about the possible effects that new Japanese tariffs would have on Japanese goods.
A trade agreement announced between Washington and Tokyo has introduced a 15% import tax on various Japanese products, including matcha. Purvis commented on the situation, stating, “As Japanese tea is not grown in the US, there is no American industry under threat that tariffs need to protect.” She added, “We hope there will be a realization that specialty tea should be exempt,” reflecting the industry’s hopes for relief amidst rising costs.
The Global Japanese Tea Association advises cooking with lower-grade matcha from later harvests. This significant step in the right direction will go a long way in addressing the shortage. This solution likely won’t please consumers used to premium culinary grade matcha for traditional whisking.
And even with the pandemic downturn, matcha green tea exports flourished. Last year, they skyrocketed by 25% to a record 36.4 billion yen which is roughly £180 million / $250 million. The larger, burgeoning international market only adds to that complexity and to that strain on production capacity, with demand coming from all over the world.