Introduction to the Matcha Shortage
Your midday matcha latte is getting more expensive and harder to come by as supply shortages and skyrocketing demand squeeze cafés. Matcha, the bright green powder swirled into drinks, ice cream, and pastries, has soared in popularity over the last few years, fueled by social media and a post-pandemic tourism boom in Japan.
The Rise of Matcha Popularity
Matcha has become a global sensation, with customers waiting in long lines at cafés to get their hands on a cup. Tea experts say social media helped fuel the matcha craze, with people posting their colorful creations. The bright green color of matcha is very visually appealing, and there’s also the cool Japan factor, the sort of aesthetics of trendy minimalism. It’s all being packaged around matcha.
Supply Shortages and Price Increases
But Japan’s supply is drying up with record heat and a shortage of tea farmers, spiking prices that could rise even more with new 15% tariffs on Japanese imports into the United States. Tea experts say true matcha is only grown and produced in Japan. The shortage has made it harder for cafés to get matcha. Normally, when cafés order their powder, it should take about one month to two months, but right now, it takes over six months to get to them.
The Impact of Tariffs on Matcha Prices
The new 15% tariffs on Japanese imports into the United States are expected to further increase the prices of matcha. Shops like Kettl are spending more than ever on some of their matcha options, with most of their suppliers doubling their prices from last year. The company has had to pass some of those added costs on to consumers and is worried that they will need to raise prices even more.
The Challenges of Matcha Production
Matcha comes from the tea plant, Camellia sinensis. The plant was brought from China to Japan around 750 CE, but matcha itself wasn’t made in Japan until around 1250 CE and eventually came to only be produced there. Matcha making is a specialized art: a traditional cup involves grinding shade-grown tea leaves into a fine powder, then mixing that powder into hot water with a bamboo whisk. The drink is used in Japanese tea ceremonies and appreciated for its apparent health benefits, with some evidence that matcha could help lower blood pressure, reduce inflammation, and improve concentration.
The Effect of Record Heat on Matcha Production
Record heat also hurt this spring’s harvest in Japan, with some farmers reporting their harvest was down 20% to 30% from last year due to heat. The number of tea farmers has dropped dramatically over the past couple of decades, with 4 out of every 5 tea producers or farmers stopping making tea between 2000 and 2020, according to the Global Japanese Tea Association. There’s not a lot of people to care for the fields, and as the farmers get older, there’d be tea fields being abandoned.
The Growing Demand for Matcha
The demand for matcha has gotten so high that some Japanese companies have begun to limit the amount of matcha people can buy. Tourism in Japan has climbed over the last few years, with a record-breaking 36.9 million people visiting in 2024, according to the Japan National Tourism Organization and the Japan Tourism Agency. Some of those travelers have returned home with bags full of matcha. U.S. consumers are already shelling out more for their matcha lattes, with the lattes averaging $6.15 a cup, up from $5.84 last year.
The Future of the Matcha Industry
While U.S. consumers are pulling back on spending at major food chains like McDonald’s, Chipotle, and Wendy’s, they are pouring more money into beverages. Sales at U.S. beverage chains are forecast to grow by 4.5% this year, according to food research company Technomic. Even as matcha prices rise, consumers are expected to keep buying it. It’s a flavor that’s both attractive in color, in flavor, in health, and those are just good recipes for a long-standing success.
Conclusion
The matcha industry is facing a perfect storm of supply shortages, price increases, and growing demand. The new 15% tariffs on Japanese imports into the United States are expected to further increase prices, and the shortage of tea farmers and record heat in Japan are making it harder for cafés to get matcha. Despite the challenges, the demand for matcha is expected to continue to grow, driven by its apparent health benefits and visually appealing color.
FAQs
- What is causing the shortage of matcha?
The shortage of matcha is caused by a combination of factors, including record heat in Japan, a shortage of tea farmers, and growing demand. - Why are matcha prices increasing?
Matcha prices are increasing due to the shortage of matcha, the new 15% tariffs on Japanese imports into the United States, and the rising cost of raw materials in Japan. - Is the demand for matcha expected to continue to grow?
Yes, the demand for matcha is expected to continue to grow, driven by its apparent health benefits and visually appealing color. - How much are matcha lattes costing on average?
Matcha lattes are averaging $6.15 a cup, up from $5.84 last year. - What is the effect of tariffs on matcha prices?
The new 15% tariffs on Japanese imports into the United States are expected to further increase the prices of matcha, with shops like Kettl spending more than ever on some of their matcha options.
Tariffs or customs duties are a tax on products purchased from abroad, and they are used by practically all countries.
