A finely ground powder of green tea known as “matcha” is experiencing a major supply shortage right now as Japanese growers struggle to keep up with booming global demand. Limited production has been exacerbated by an aging Japanese population and fewer people from younger generations taking up farming. At the same time, demand has never been higher thanks to an army of TikTok influencers trying to capitalize on the viral moment. But what exactly is matcha and why is supply so limited?
Matcha originated in China – The Chinese are credited with first producing matcha during the Tang Dynasty (618-907 AD) as a method of preserving and consuming green tea. Tea leaves were steamed, sometimes salted, and formed into bricks, which were ideal for transport and trade. To prepare the tea, a piece of the brick would be broken off, ground into a fine powder, and mixed with hot water. Tea preparation evolved further during the Song Dynasty in China (960-1279). Tea leaves were now stone-ground into an even finer powder and whisked with hot water, creating a rich, frothy beverage. A Buddhist monk from Japan discovered matcha while studying in China and brought tea seeds along with the preparation method back to his monastery. While Japan’s Zen Buddhist monks continued to develop their own matcha cultivation and preparation methods, the practice faded in China and was mostly unheard of in the country by the 14th century.
Evolution in Japan – During its early years in Japan, matcha was rare and highly coveted, produced in very limited quantities, and reserved for the elite. Tea plants were grown in direct sunlight, which resulted in a more bitter and astringent flavor. However, as matcha became deeply woven into Japanese culture, cultivation techniques evolved, leading to the methods we still primarily use today. Tea farmers learned that shading the tea plants for several weeks before harvest resulted in a sweeter, more vibrant tea. The traditional Japanese tea ceremony, typically known as chanoyu or sadō/chadō, centers on the preparation, serving and drinking of matcha as hot tea.
Matcha’s Base – Strict definitions of matcha are given by the International Organization for Standardization (ISO), including that it can only be made from Camellia sinensis var. sinensis (Chinese, small-leaf tea). The whole leaf form of this tea, before it is ground into powder, is known as “tencha.” All green tea leaves, including tencha, are produced without the typical fermentation process of raw tea leaves. In tea-growing terms, fermentation refers to oxidation. After being harvested, green tea leaves are promptly steamed to halt oxidation. This results in a tea with a vibrant green color, which is in contrast to the darker leaves of fermented black tea. ISO standards allow matcha to be made from tender leaves, buds, or shoots. However, the Japanese food labeling standard allows it to be made only from leaves.
Cultivated Partially in Shade – Viewed more as a medicine than a delicacy, matcha in the early days was marked by its bitter flavor. The Buddhist monks of Japan during the 15th or 16th centuries discovered – by accident – that shading the tea plants 20-30 days before harvest created a mellow, umami-sweet taste in the tea leaves. Growing the tea in shade forces it to produce more chlorophyll, which gives matcha its vibrant green color. This process also increases the concentration of L-theanine, an amino acid that contributes to matcha’s umami taste and alleged calming effects. Limited sunlight also reduces catechin production, which lowers the bitterness level. The leaves are only harvested once a year during a short spring window.
Limited Japanese Production – Japan’s matcha production is constrained by traditional, labor-intensive methods and a shrinking pool of skilled farmers. Compounding the problem, several years of harsh weather conditions—abnormally warm winters, uneven rainfall, and early frosts—have thrown off the sensitive tea-growing cycle in Japan’s prime growing regions. This has led to reduced yields and poor quality over many harvests. It’s also led to leading Japanese producers either stopping or regulating sales, which has added to the global shortage. Even if Japan’s weather was perfect, the country’s maximum output would still fail to meet booming global demand. Tencha only accounts for 6% of Japanese tea production. The government is trying to incentivize more farmers to increase production, but the country may not have enough tea farmers to make a difference. Government data shows tea farmer ranks have dwindled from 53,000 in 2000 to just 12,353 in 2020.
Other Matcha Production Countries – While Japan remains the most popular source for matcha, Chinese farmers have been rapidly increasing production. In fact, Chinese production exceeded 10,000 metric tons in 2023 (most recent data available) compared to Japan’s 4,000 tons. However, China does not have the same production standards, and matcha users complain about the quality of the Chinese products. Other countries like India, Vietnam, and Kenya also produce some matcha, but again, the quality standards are different, and Japanese matcha remains highly coveted.
U.S. Matcha Production – It’s not impossible, but you’ll be hard-pressed to find matcha that’s fully produced in the U.S. Notably, most U.S. companies that grow and process their own tea are very small-scale operations, so labor-intensive matcha production usually ends up being too much for smaller farms to handle. I can only find one that grows its own tea for matcha: Light of Day Organics in Michigan. Several others that have dabbled in matcha in the past, such as Table Rock Tea in South Carolina and the Great Mississippi Tea Company, have abandoned the product. However, there are numerous U.S. companies that import tea leaves from Japan or elsewhere and process it into matcha here in the states.
Prices are Going Through the Roof… If you can figure out how to successfully produce matcha, you stand to make a small fortune. According to Forbes, the matcha market is expected to hit +$5 billion by 2028, equating to a +10.39% compound annual growth rate from 2023 to 2028. Prices for matcha have been steadily climbing since around 2021, but they’ve absolutely exploded in the past year, rising a staggering +170%. With limited room for global production to increase, experts believe prices will continue to rise for the foreseeable future. (Sources: Food & Wine, Fortune, Reuters)
