New York, Sep 16 (AP) The beloved green tea, matcha, is facing a potential test as prices are set to surge.
Worldwide demand for the distinctive powdered tea has soared, thanks to its health benefits and the rise of vibrant matcha lattes on social media platforms. In the United States, matcha's retail sales have jumped by 86% over the past three years, according to market research firm NIQ.
However, the matcha market is encountering challenges. Japan, a major producer, has seen a decrease in harvest due to poor weather conditions. Although China, another leading producer, has ample supply, increasing demand and labor shortages have led to price hikes there as well.
The situation is exacerbated for American consumers by tariffs. Currently, imports from China incur a 37.5% tariff, and there's a 15% tariff on Japanese imports. It's unclear if tea might be exempt from these tariffs, given that the U.S. does not grow it in significant quantities — an exemption previously granted to EU cork by the Trump administration.
The Commerce Department and the U.S. Trade Representative have not yet responded to inquiries from The Associated Press.
Aaron Vick, a senior tea buyer at GS Haly, a California-based tea importer, reported that he is paying 75% more for the highest-grade 2025 Japanese matcha crop, which is expected in the U.S. later this fall.
Vick anticipates that lower grades of matcha will see price increases of 30% to 50%. While Chinese matcha is generally less expensive than Japanese matcha, its prices are also climbing due to heightened demand.
"People should brace themselves for a significant increase in matcha prices this year," Vick commented. "It's going to be challenging for matcha enthusiasts, who will need to demonstrate their commitment financially."
Even before this year's harvest, the rising demand had already been straining matcha supplies. Producing matcha requires precision and labor. Farmers cultivate tencha, a type of green tea leaf, in shaded conditions. In spring, the leaves are harvested, steamed, de-stemmed, de-veined, and ground into a fine powder. Though tencha can be harvested in summer and fall, these later harvests are typically of lower quality.
Some cost-cutting measures exist, such as using jet mills which grind leaves with high-pressure air. However, Japan faces additional challenges, including an aging workforce and limited tencha production. Despite efforts by the Japanese agricultural ministry to persuade tea growers to switch from regular green tea to tencha, there is hesitancy due to fears that the matcha craze might wane.
This scenario provides an opportunity for China to capitalize, where matcha first originated but lost popularity in the 14th century.
Recent years have seen Chinese matcha production increase to meet both domestic and international demand. While historically viewed as inferior to Japanese matcha and often used as a flavoring instead of a premium tea, its quality is improving, according to Jason Walker, marketing director at Firsd Tea, the U.S. subsidiary of China's largest tea exporter, Zhejiang Tea Group.
"We observe growing interest in Chinese matcha due to capacity challenges and evolving perceptions," Walker noted. "The perception that it must be Japanese matcha or nothing is changing; we offer a quality product too."
Starbucks, for instance, is among the companies utilizing Chinese matcha for its lattes, while also sourcing from Japan and South Korea. Dunkin' and Dutch Bros. did not specify their matcha sourcing when asked.
Josh Mordecai, supply chain director at London-based Good & Proper Tea, said he is frequently contacted by Chinese matcha suppliers. Currently, he buys exclusively from Japan, although his acquisition costs have jumped by 40%, forcing him to consider raising prices.
Mordecai remarked that demand for matcha in the last year surpassed that of the preceding nine years combined. If matcha prices continue to escalate, he speculates that consumers might turn to other teas such as hojicha, a roasted Japanese green tea.
"We'll see if this is merely a bubble. Nothing lasts forever on social media," Mordecai said.
Julia Mills, a food and drink analyst at Mintel, predicts social media interest in matcha could taper off, though she believes it will continue to feature on menus for some time.
Mills emphasized that matcha attracts health-conscious individuals by offering antioxidants and l-theanine, an amino acid with calming effects, and contains less caffeine than coffee. According to her, millennials and Gen Z are more inclined to try matcha.
The traditional preparation method, which involves whisking the powder with hot water in a small bowl, resonates with those seeking a more intentional drinking experience, Mills added.
This is certainly the case for Melissa Lindsay of San Francisco, who daily whisks matcha for herself. Although she has noticed rising prices for high-end matcha, she remains committed to her routine.
"It's not just about brewing a tea bag; it's the entire experience of crafting it to your preference," Lindsay stated.
David Lau, owner of Asha Tea House in San Francisco, is taking steps to retain matcha customers by keeping price increases minimal. Although his supply costs have more than doubled, Lau only raised his matcha latte prices by 50 cents. He's also exploring alternative suppliers from China and other regions.
"We're in the business of affordable luxury, similar to other specialty cafes. We want customers to come daily, but pricing them out needs to be avoided," Lau explained, noting the importance of being mindful of not exceeding customer affordability. (AP) GRS GRS
(Only the headline of this report may have been reworked by Editorji; the rest of the content is auto-generated from a syndicated feed.)
