Surging Global Demand for Matcha Strains Supply Chains Amid Price Hikes

The global appetite for matcha, a finely ground green tea powder from Japan, has surged dramatically in recent years, driven by social media trends and a post-pandemic tourism boom. This escalating demand, coupled with adverse climatic conditions affecting crop yields and recent U.S. tariffs on Japanese imports, has resulted in significant price increases and supply shortages.

The phenomenon, often referred to as 'matcha mania,' has permeated various aspects of consumer culture, from beverages at Starbucks to desserts at Krispy Kreme. Influencers sharing recipes and brewing tips have propelled the popularity of matcha, evident in the vast reach of the '#MatchaTok' hashtag across social media platforms, which boasts millions of views.

According to Lauren Purvis, owner of Mizuba Tea Co., a U.S.-based tea importer, her customers have reported that what once lasted a month is now consumed in mere days. "Some cafes are even asking for a kilo a day. They’re desperate to keep up," Purvis stated, highlighting the drastic changes in consumer purchasing behavior.

Traditionally, matcha is produced from tencha, green tea leaves cultivated under shade to enhance their unique umami flavor. This labor-intensive process includes harvesting, drying, and grinding the leaves using stone mills, which can yield only 40 grams of matcha per hour. However, recent heatwaves have severely impacted crop yields, particularly in the Kyoto region, where approximately 25% of Japan’s tencha is sourced. The rising temperatures have led to poor harvests, compounding the challenges faced by growers already grappling with an aging workforce.

Atsuko Mori, director of Camellia Tea Ceremony in Uji, noted that demand has skyrocketed, with shops often running out of stock within hours of opening. Retailers have begun implementing purchasing limits to manage supply. "It’s a bit sad to see high-grade matcha used in cooking, where its delicate flavor is often lost," Mori lamented, emphasizing the cultural importance of preserving the integrity of matcha consumption.

Additionally, the Global Japanese Tea Association has advocated for mindful consumption practices, encouraging consumers to opt for lower-grade matcha from later harvests, which is more suitable for cooking and less strained by current supply issues. This initiative aims to ensure that matcha is enjoyed respectfully while supporting traditional production methods.

Adding to the complexities of the matcha market are the tariffs imposed by the U.S. government on Japanese goods, which are expected to elevate prices further. A recent trade agreement between Washington and Tokyo has introduced a 15% import tax on Japanese products, including matcha. Purvis expressed concern, stating, "As Japanese tea is not grown in the U.S., there is no American industry under threat that tariffs need to protect. We hope there will be a realization that specialty tea should be exempt."

Despite the challenges, there are glimmers of hope. Some industry experts believe that the current matcha boom may stabilize, with Masahiro Nagata, co-founder of Matcha Tokyo, predicting that the high demand will cool within two to three years. "Low quality matcha is selling for a high price, and we think that this will no longer be a viable business," he stated, hinting at the potential for market correction.

As the global market for matcha continues to evolve, the implications extend beyond mere economics, touching on cultural preservation, agricultural sustainability, and international trade relations. The future landscape of matcha will depend not only on consumer habits but also on the environmental and economic conditions that shape its production.