Matcha, a green tea powder steeped in Japanese tradition, has gained popularity in the U.S. Vibrant and trendy, it is often showcased on social media by influencers and health-conscious consumers.
Despite its appeal, matcha’s taste can be divisive, with some finding it delicious and others likening it to grass. However, its high cost is a common factor for all matcha enthusiasts.
The price of matcha can vary greatly in different locations and establishments. Factors like a limited supply and new tariffs can further drive up the cost of this sought-after beverage.
Matcha represents a small portion of the U.S. tea market, with prices fluctuating based on the type and quality of matcha being served. Different grades, such as ceremonial, ready-to-drink, and culinary, come with varying price tags.
Starbucks and other chains offer matcha beverages at different prices across locations. Making matcha at home can also be a cost-effective option, with prices varying based on the brand and quality of the powder.
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Ceremonial:
First-harvest tencha leaves ground into a fine powder, ceremonial grade matcha is the most expensive due to its quality. Prices can range from $30 per ounce to $6,000 per pound.
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Ready-to-drink:
Made with second-harvest tencha leaves, ready-to-drink matcha falls between ceremonial and culinary grades in taste and cost.
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Culinary:
The most affordable grade, culinary matcha is used for cooking and baking. Made from older tencha leaves, it is priced between $10 to $25 per ounce.
Matcha’s current shortage is primarily due to the surge in demand driven by social media trends and health-conscious consumers. With Japan being the primary source of ceremonial matcha, local producers are struggling to keep up with the global demand.
The seasonality of matcha production, along with the time-consuming process of cultivating and processing the tea leaves, further contributes to the shortage. With matcha exports on the rise, both Japan and other nations are facing challenges in meeting the growing demand for this popular beverage.
While matcha only accounts for a small percentage of Japan’s total tea production, its popularity has put pressure on suppliers to meet the increasing demand. The unique production process and limited availability of ceremonial matcha make it a coveted and expensive commodity in the market.
The tea production industry in Japan is facing a decline primarily due to the aging population of individuals involved in the tea business. With most tea farms being family-owned, there is immense pressure on both tea consumption and production in the country.
One of the main challenges faced by matcha producers is the labor-intensive nature of the process, coupled with a shortage of workers to meet the growing demand. This trend is exacerbated by the aging workforce in agriculture, as fewer young individuals are choosing to pursue careers in tea farming.
Climate change also poses a significant threat to matcha farmers, with rising temperatures affecting production levels. Japan experienced its hottest year on record recently, with July being the hottest month ever recorded in the nation.
The impact of tariffs on matcha prices is a looming concern. While President Donald Trump’s tariffs aim to boost domestic manufacturing, the reality is that U.S. production cannot replace Japanese supply. The U.S. represents a minimal percentage of tea consumed domestically, making imports essential to meet consumer demand.
The Tax Foundation projects that tariffs will affect 75% of all food imports, leading to higher prices for consumers. Matcha, primarily sourced from Japan, faces a 15% tariff, while secondary producers like India and China face even higher tariffs. The added cost of tariffs could result in increased matcha prices for consumers.
Ultimately, the burden of tariffs will likely be passed on to consumers through higher prices on store shelves and in cafes. As Japan’s production capacity remains limited, the combination of tariffs and production constraints could further drive up matcha prices for consumers.
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