How a lot for matcha? Costs for the favored powdered tea soar on account of world demand

The world’s fondness for matcha is about to be examined by steep value will increase.

Global demand for the powdered tea has skyrocketed around the globe, fueled by shopper curiosity in its health benefits and by the bright green matcha lattes effervescent up on social media. In the U.S., retail gross sales of matcha are up 86% from three years in the past, in line with NIQ, a market analysis agency.

But the matcha market is troubled. In Japan, one of many largest matcha producers, poor weather lowered this yr’s harvest. Matcha continues to be plentiful in China, one other main producer, however labor shortages and excessive demand have additionally raised costs there.

For Americans, there’s the added affect of tariffs. Imports from China are at the moment subject to a 37.5% tariff, whereas the U.S. has a 15% tariff on imports from Japan. It’s not clear if tea will likely be exempted from tariffs as a result of it’s a pure product that’s not grown in vital portions within the U.S. — an lodging that the Trump administration has made for cork from the European Union. The Commerce Department and the U.S. Trade Representative didn’t reply to messages left by The Associated Press.

Aaron Vick, a senior tea purchaser with California-based tea importer G.S. Haly, says he paid 75% extra for the highest-grade 2025 crop of Japanese matcha, which can arrive within the U.S. later this fall. He expects decrease grades of matcha to price 30% to 50% extra. Chinese matcha — whereas typically cheaper than Japanese matcha — can also be getting costlier due to excessive demand, he stated.

“People should expect an enormous increase in the price of matcha this year,” Vick stated. “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.”

Even earlier than this yr’s harvest, rising demand was straining matcha provides. Making matcha is exact and labor intensive. Farmers develop tencha — a inexperienced tea leaf — within the shade. In the spring, the leaves are harvested, steamed, de-stemmed and de-veined after which stone floor right into a superb powder. Tencha could be harvested once more in the summertime and fall, however the later harvests are typically of decrease high quality.

There are methods to chop corners, like utilizing a jet mill, which grinds the leaves with excessive strain air. But Japan has different points, together with a quickly getting older workforce and restricted tencha manufacturing. And regardless of Japanese agricultural ministry attempting to coax tea growers to modify to tencha from common inexperienced tea, many are reluctant to take action, involved that the matcha increase will fade.

That’s giving a gap to China, the place matcha originated however fell out of favor within the 14th century. Chinese matcha manufacturing has been rising in recent times to fulfill each home and worldwide demand.

Chinese matcha has traditionally been thought of inferior to Japanese matcha and used as a flavoring for issues like matcha-flavored KitKat bars as an alternative of as a consuming tea. But the standard is enhancing, in line with Jason Walker, the advertising and marketing director at Firsd Tea, the New Jersey-based U.S. subsidiary of Zhejiang Tea Group, China’s largest tea exporter.

“We are seeing more and more interest in Chinese matcha because of capacity issues and changing perception,” Walker stated. “It used to be the idea that it has to be Japanese matcha or nothing. But we have a good product too.”

Starbucks is among the many firms utilizing matcha from China for its lattes. The firm stated it additionally sources matcha from Japan and South Korea. Dunkin’ and Dutch Bros. didn’t reply when requested the place they supply the matcha.

Josh Mordecai, the availability chain director for London-based tea provider Good & Proper Tea, stated he’s approached virtually each day by Chinese matcha suppliers. For now, he solely buys matcha from Japan, however the price to accumulate it has risen 40% so he’ll have to lift costs, he stated.

Mordecai stated he noticed extra demand for matcha within the final yr than within the earlier 9 years mixed. If matcha costs proceed to rise, he wonders if shoppers will change to different tea varieties like hojicha, a roasted Japanese inexperienced tea.

“We’ll see if this is a bubble or not. Nothing stays on social media that long,” Mordecai stated.

Julia Mills, a food and drinks analyst for the market analysis firm Mintel, expects the social media curiosity in matcha to die down. But she thinks matcha will stay on menus for some time.

Mills stated matcha appeals to clients taken with wellness, because it incorporates antioxidants and l-theanine, an amino acid recognized for its calming results, and it’s much less caffeinated than espresso. Millennials and Generation Z clients usually tend to have tried matcha than others, Mills stated.

The conventional approach of getting ready it, whisking the powder along with scorching water in a small bowl, additionally appeals to drinkers who wish to decelerate and be extra intentional, Mills stated.

That’s true for Melissa Lindsay of San Francisco, who whisks up some matcha for herself each morning. Lindsay has seen costs rising for her high-end matcha, however it’s a behavior she’d discover laborious to stop.

“It’s not just a tea bag in water,” Lindsay stated. “It’s a whole experience of making it to your liking.”

David Lau, the proprietor of Asha Tea House in San Francisco, hopes to maintain clients consuming matcha by limiting value will increase. Lau raised the worth of his matcha latte by 50 cents after the price the matcha he buys from Japan greater than doubled. He’s additionally trying into alternate suppliers from China and elsewhere.

“We’re 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,” he stated. “We wish to be actually cognizant and conscious of not doing that.