Introduction to Matcha Prices
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.
The Current State of the Matcha Market
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.
The Impact of Tariffs on Matcha Prices
It’s not clear if tea will be exempted from tariffs because it’s a natural product that’s not grown in significant quantities in the U.S. — an accommodation that the Trump administration has made for cork from the European Union. The Commerce Department and the U.S. Trade Representative didn’t respond to messages left by The Associated Press. 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.
Expected Price Increases
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.”
The Production Process of Matcha
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.
Challenges in the Matcha Industry
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.
The Rise of Chinese Matcha
Chinese matcha production has been growing in recent years to meet both domestic and international demand. 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.
Market Trends and Consumer Preferences
Starbucks is among the companies using matcha from China for its lattes. The company said it also sources matcha from Japan and South Korea. Dunkin’ and Dutch Bros. didn’t respond when asked where they source the matcha. Josh Mordecai, the supply chain director for London-based tea supplier Good & Proper Tea, said he is approached almost daily by Chinese matcha suppliers. For now, he only buys matcha from Japan, but the cost to acquire it has risen 40% so he’ll have to raise prices, he said.
The Future of Matcha
Mordecai said he saw more demand for matcha in the last year than in the previous nine years combined. If matcha prices continue to rise, he wonders if consumers will switch to other tea varieties like hojicha, a roasted Japanese green tea. Julia Mills, a food and drink analyst for the market research company Mintel, expects the social media interest in matcha to die down. But she thinks matcha will remain on menus for a while.
Conclusion
The increase in matcha prices is a result of a combination of factors, including global demand, poor weather, labor shortages, and tariffs. While the prices of matcha are expected to rise, many consumers are willing to pay the extra cost for the health benefits and unique experience that matcha provides. As the matcha market continues to evolve, it will be interesting to see how consumers and companies adapt to the changing prices and availability of this popular tea.
FAQs
Q: Why are matcha prices increasing?
A: Matcha prices are increasing due to a combination of factors, including global demand, poor weather, labor shortages, and tariffs.
Q: How much are matcha prices expected to rise?
A: The prices of matcha are expected to rise by 30% to 50% for lower grades and 75% for the highest-grade matcha.
Q: Will the increase in matcha prices affect consumer demand?
A: Some consumers may switch to other tea varieties if matcha prices become too high, but many are willing to pay the extra cost for the health benefits and unique experience that matcha provides.
Q: Are there any alternatives to Japanese matcha?
A: Yes, Chinese matcha is becoming increasingly popular and is considered a viable alternative to Japanese matcha.
Q: How will the matcha industry adapt to the changing prices and availability?
A: The matcha industry will likely adapt by finding new suppliers, improving production efficiency, and adjusting prices to reflect the changing market conditions.
