The world\u2019s fondness for matcha is about to be tested by steep price increases.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
But the matcha market is troubled. In Japan, one of the biggest matcha producers, poor weather reduced this year\u2019s harvest. Matcha is still plentiful in China, another major producer, but labor shortages and high demand have also raised prices there.<\/p>\n\n\n\n
For Americans, there\u2019s 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. It\u2019s not clear if tea will be exempted from tariffs because it\u2019s a natural product that\u2019s not grown in significant quantities in the U.S. \u2014 an accommodation that the Trump administration has made for cork from the European Union. The Commerce Department and the U.S. Trade Representative didn\u2019t respond to messages left by The Associated Press.<\/p>\n\n\n\n
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 \u2014 while generally cheaper than Japanese matcha \u2014 is also getting more expensive because of high demand, he said.<\/p>\n\n\n\n
\u201cPeople should expect an enormous increase in the price of matcha this year,\u201d Vick said. \u201cIt\u2019s 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.\u201d<\/p>\n\n\n\n
Even before this year\u2019s harvest, growing demand was straining matcha supplies. Making matcha is precise and labor intensive. Farmers grow tencha \u2014 a green tea leaf \u2014 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.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
That\u2019s 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.<\/p>\n\n\n\n
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\u2019s largest tea exporter.<\/p>\n\n\n\n
\u201cWe are seeing more and more interest in Chinese matcha because of capacity issues and changing perception,\u201d Walker said. \u201cIt used to be the idea that it has to be Japanese matcha or nothing. But we have a good product too.\u201d<\/p>\n\n\n\n
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\u2019 and Dutch Bros. didn\u2019t respond when asked where they source the matcha.<\/p>\n\n\n\n
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\u2019ll have to raise prices, he said.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
\u201cWe\u2019ll see if this is a bubble or not. Nothing stays on social media that long,\u201d Mordecai said.<\/p>\n\n\n\n
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.<\/p>\n\n\n\n
Mills said matcha appeals to customers interested in wellness, since it contains antioxidants and l-theanine, an amino acid known for its calming effects, and it\u2019s less caffeinated than coffee. Millennials and Generation Z customers are more likely to have tried matcha than others, Mills said.<\/p>\n\n\n\n
The traditional way of preparing it, whisking the powder together with hot water in a small bowl, also appeals to drinkers who want to slow down and be more intentional, Mills said.<\/p>\n\n\n\n
That\u2019s true for Melissa Lindsay of San Francisco, who whisks up some matcha for herself every morning. Lindsay has noticed prices rising for her high-end matcha, but it\u2019s a habit she\u2019d find hard to quit.<\/p>\n\n\n\n
\u201cIt\u2019s not just a tea bag in water,\u201d Lindsay said. \u201cIt\u2019s a whole experience of making it to your liking.\u201d<\/p>\n\n\n\n
David Lau, the owner of Asha Tea House in San Francisco, hopes to keep customers drinking matcha by limiting price increases. Lau raised the price of his matcha latte by 50 cents after the cost the matcha he buys from Japan more than doubled. He\u2019s also looking into alternate suppliers from China and elsewhere.<\/p>\n\n\n\n
\u201cWe\u2019re in the affordable luxury business, you know, just like any other specialty cafe. We want people to be able to come every day, and once you reach a certain price level, you start to price people out,\u201d he said. \u201cWe want to be really cognizant and aware of not doing that.<\/p>\n\n\n\n