Introduction to the Matcha Market
The world’s fondness for matcha is about to be tested by steep price increases. Global demand for the powdered tea has skyrocketed around the world, fueled by consumer interest in its health benefits and by the bright green matcha lattes bubbling up on social media. In the U.S., retail sales of matcha are up 86% from three years ago, according to NIQ, a market research firm.
Factors Contributing to Price Increases
But the matcha market is troubled. In Japan, one of the biggest matcha producers, poor weather reduced this year’s harvest. Matcha is still plentiful in China, another major producer, but labor shortages and high demand have also raised prices there. For Americans, there’s the added impact of tariffs. Imports from China are currently subject to a 37.5% tariff, while the U.S. has a 15% tariff on imports from Japan.
Impact on Suppliers and Consumers
Aaron Vick, a senior tea buyer with California-based tea importer G.S. Haly, says he paid 75% more for the highest-grade 2025 crop of Japanese matcha, which will arrive in the U.S. later this fall. He expects lower grades of matcha to cost 30% to 50% more. Chinese matcha — while generally cheaper than Japanese matcha — is also getting more expensive because of high demand, he said.
“People should expect an enormous increase in the price of matcha this year,” Vick said. “It’s going to be a bit of a tough ride for matcha devotees. They will have to show the depth of their commitment at the cash register.”
Production Challenges
Even before this year’s harvest, growing demand was straining matcha supplies. Making matcha is precise and labor intensive. Farmers grow tencha — a green tea leaf — in the shade. In the spring, the leaves are harvested, steamed, de-stemmed and de-veined and then stone ground into a fine powder. Tencha can be harvested again in the summer and fall, but the later harvests are generally of lower quality.
Alternative Sources
There are ways to cut corners, like using a jet mill, which grinds the leaves with high pressure air. But Japan has other issues, including a rapidly aging workforce and limited tencha production. And despite Japanese agricultural ministry trying to coax tea growers to switch to tencha from regular green tea, many are reluctant to do so, concerned that the matcha boom will fade. That’s giving an opening to China, where matcha originated but fell out of favor in the 14th century. Chinese matcha production has been growing in recent years to meet both domestic and international demand.
Market Trends and Consumer Preferences
Chinese matcha has historically been considered inferior to Japanese matcha and used as a flavoring for things like matcha-flavored KitKat bars instead of as a drinking tea. But the quality is improving, according to Jason Walker, the marketing director at Firsd Tea, the New Jersey-based U.S. subsidiary of Zhejiang Tea Group, China’s largest tea exporter. Starbucks is among the companies using matcha from China for its lattes. The company said it also sources matcha from Japan and South Korea.
Conclusion
The increase in matcha prices is a result of a combination of factors including high demand, poor weather conditions, and tariffs. As the market continues to evolve, it will be interesting to see how suppliers and consumers adapt to the changing landscape. Whether the matcha trend will continue or fade remains to be seen, but for now, matcha devotees will have to be prepared to pay a premium for their favorite drink.
FAQs
Q: Why are matcha prices increasing?
A: Matcha prices are increasing due to a combination of factors including high demand, poor weather conditions, and tariffs.
Q: Where is matcha primarily produced?
A: Matcha is primarily produced in Japan and China.
Q: Is Chinese matcha considered to be of the same quality as Japanese matcha?
A: Historically, Chinese matcha has been considered inferior to Japanese matcha, but the quality is improving.
Q: How much have matcha prices increased?
A: Matcha prices have increased by as much as 75% for high-grade Japanese matcha and 30% to 50% for lower grades.
Q: Will the matcha trend continue?
A: It remains to be seen whether the matcha trend will continue or fade, but for now, matcha devotees will have to be prepared to pay a premium for their favorite drink.
