Matcha Prices Surge as Demand Outpaces Supply, Shifting Sourcing to China
NEW JERSEY – The price of matcha, the vibrant green tea powder popular in lattes and wellness routines, is experiencing a important increase due to soaring global demand and capacity limitations in customary growing regions. While Japan has long been considered the gold standard for matcha, rising costs are prompting major brands and smaller businesses alike to explore choice sources, particularly china.
According to Walker, Marketing Director of FIRSD TEA, the American subsidiary of Zhejiang Tea Group – China’s largest tea exporter – interest in Chinese matcha is growing alongside the price hikes. “Before ther was an idea that it should be Japanese Matcha or nothing. But we also have a good product,” Walker stated, noting a shift in consumer perception.
The impact is already being felt across the industry. Starbucks utilizes matcha sourced from both China and South Korea for its popular lattes. While Dunkin’ and Dutch Bros. declined to comment on their sourcing, other businesses are actively reassessing their supply chains.
Josh Mordecai, director of London-based Good & Proper Tea, reports being contacted “almost daily” by Chinese matcha suppliers. Despite currently sourcing exclusively from japan, Mordecai revealed acquisition costs have risen by 40%, forcing him to consider price increases for consumers. He also expressed concern about long-term affordability, questioning whether consumers might switch to alternatives like hojicha, a Japanese toasted green tea, if prices continue to climb. “We will see if this is a bubble or not,” Mordecai said. “Nothing remains on social networks so long.”
Market research from Mintel suggests social media interest in matcha may be waning, but analyst Julia Mills believes the tea will remain a menu staple for the foreseeable future. Mills highlighted matcha’s appeal to health-conscious consumers, citing its antioxidant content, the presence of the calming amino acid L-theanine, and its lower caffeine levels compared to coffee. Millennials and Generation Z are the demographics most likely to have tried matcha, she added.
The traditional preparation of matcha – whisking the powder wiht hot water – also contributes to its appeal, offering a mindful and purposeful experiance, according to Mills.
This sentiment is echoed by melissa Lindsay of San Francisco, a daily matcha drinker who has noticed price increases on her preferred high-end brands but remains committed to the ritual.”It’s not simply a tea bag in water,” Lindsay explained. “It’s an experience to prepare it to your liking.”
Businesses are navigating the price increases with varying strategies. David lau, owner of Asha Tea House in San Francisco, has increased the price of his matcha latte by 50 cents after the cost of his Japanese matcha more than doubled.He is now actively seeking alternative suppliers in China and other countries, aiming to balance affordability with quality.
“We are in the affordable luxury business… We want people to come every day, and once you reach a certain level of prices you start excluding people,” Lau said. “We want to be very aware and careful not to do that.”
The surge in matcha prices reflects a broader trend of supply chain disruptions and increasing demand for specialty food and beverage products.Whether the market will stabilize, or consumers will seek alternatives, remains to be seen.