Matcha Crisis: Global Demand Surge Strains Supply Chain

The rising global obsession with matcha, fueled by social media and Japan's tourism revival, is creating drastic supply shortages of the prized green tea. The combination of increased demand and adverse climate conditions has led to significant price hikes and limited availability, resulting in a call for more mindful consumption.

The vibrant green hue of matcha is enchanting consumers worldwide, but an escalating global demand for the Japanese tea is leaving suppliers grappling with a precarious situation. Matcha, traditionally consumed for its rich health benefits and unique flavor, has seen its appeal surge, partly due to social media influencers promoting blends and recipes. The viral success of the hashtag “Matcha Tok” is testimony to this trend, racking up millions of views across social platforms.

This craze has coincided with a post-pandemic revival of tourism to Japan, attracted by a favorable exchange rate, which has increased the demand for Japanese goods, including matcha. Lauren Purvis, a tea importer based in the U.S., highlighted that some cafes are requesting nearly a kilogram of matcha daily, a stark contrast to what was once considered a month’s supply.

However, producers are facing a dual challenge of skyrocketing demand and diminished crop yields due to recent extreme heatwaves, coupled with U.S. tariffs impacting Japanese imports, which have contributed to a steep rise in matcha prices. The Kyoto region, known for generating roughly 25% of Japan's tencha leaf production, has reported poor harvests due to these harsh conditions. An aging farming workforce is also exacerbating the supply issues, as fewer young individuals are entering the tea cultivation industry.

Retailers in regions renowned for matcha, like Uji, are placing strict purchasing limits on customers amid overwhelming tourist traffic. For instance, Camellia Tea Ceremony in Kyoto restricts buyers to just one tin each, as demand surged significantly within the last year. Rie Takeda, a tea master at Chazen, a traditional tea ceremony chain in Tokyo, echoes this sentiment, indicating that restock times have stretched from mere days to over a week.

Despite the supply challenges, the increased visibility and interest in matcha have led to an influx of new growers entering the market, underscoring the sector's adaptation to meet heightened interest. The Japanese agricultural ministry reports a tripling of matcha production from 2010 to 2023, with green tea exports, matcha included, climbing by 25% last year.

In the midst of this matcha boom, there is a growing movement advocating for mindful consumption. Many efforts are directed at countering hoarding behaviors and emphasizing the value of savoring high-quality matcha in its purest form, rather than as an ingredient in various recipes—potentially diluting its delicate flavor.

The Global Japanese Tea Association is promoting the use of lower-grade matcha, which is more readily available and suitable for cooking. This initiative aims to protect the integrity of high-grade matcha while encouraging respect for the traditional craftsmanship of Japanese tea.

In light of new tariffs imposed by the U.S. on Japanese goods, experts like Lauren Purvis remain concerned about future price increases. After a recent trade deal announced a 15% tariff, there's speculation regarding the viability of current pricing structures.

However, some analysts are optimistic about a possible easing in matcha prices. Masahiro Nagata, co-founder of Matcha Tokyo, indicates that while the demand is currently booming, it may stabilize in the next few years, potentially normalizing supply and pricing within the industry.

As the matcha trend flows through cafes and homes globally, understanding and appreciating its deep cultural significance and mindful consumption practices will be essential to ensure its continued place on the global stage.