Matcha Prices Surge as Global Demand Outstrips Supply

Global demand for matcha has driven steep price increases that are beginning to reverberate through cafes, retailers and importers, industry officials and analysts say.

Retail sales of matcha in the United States have climbed 86% from three years ago, according to market researcher NIQ, even as poor weather in Japan and labor shortages in China have tightened supplies and pushed costs higher. Import tariffs also add to the pressure: imports from China currently face a 37.5% tariff while imports from Japan are subject to a 15% tariff, industry sources said.

Aaron Vick, a senior tea buyer at California-based importer G.S. Haly, said he paid 75% more for the highest-grade 2025 Japanese matcha crop, which is expected to arrive in the United States later this fall. He estimated lower grades will cost 30% to 50% more. "People should expect an enormous increase in the price of matcha this year," Vick said.

The matcha supply chain is complex and labor intensive. Producers cultivate tencha—green tea leaves grown in shade—then steam, de-stem and stone-grind the leaves into a fine powder. Later harvests in the same season yield lower-quality tencha, and some producers use faster methods such as jet-milling that can reduce cost at the expense of traditional texture and flavor.

Japan, long regarded as the benchmark for premium matcha, faced weather-related crop losses this year and must also contend with an aging agricultural workforce and limited production of tencha. The Japanese government has encouraged some growers to switch from regular green tea to tencha production, but many farmers have been hesitant, concerned the current matcha boom may fade.

That reluctance has opened an avenue for Chinese producers to expand. Matcha originated in China before becoming more closely associated with Japan; in recent years China has ramped up matcha production to meet rising domestic and international demand. Jason Walker, marketing director at Firsd Tea, the U.S. affiliate of Zhejiang Tea Group, said the quality of Chinese matcha is improving and buyers are increasingly open to it. "We are seeing more and more interest in Chinese matcha because of capacity issues and changing perception," Walker said.

Major beverage companies already draw on global supplies. Starbucks said it sources matcha from China as well as Japan and South Korea. Representatives for Dunkin' and Dutch Bros. did not respond to requests for comment.

Smaller suppliers and specialty cafes report similar cost pressures. Josh Mordecai, supply chain director for London-based Good & Proper Tea, said he is approached frequently by Chinese matcha suppliers but for now continues to buy Japanese matcha; he added the cost to acquire it has risen about 40% and he expects to raise prices to customers. At Asha Tea House in San Francisco, owner David Lau said the price of matcha he buys from Japan more than doubled, prompting a 50-cent hike in the cafe's matcha latte price and a search for alternative suppliers.

Some consumers say they will absorb higher costs, in part because of the ritual associated with traditional matcha preparation. Melissa Lindsay of San Francisco, who prepares matcha each morning, said she has noticed prices rising for her high-end product but finds the process part of the appeal. "It's not just a tea bag in water," she said. "It's a whole experience of making it to your liking."

Analysts say social-media-driven interest has accelerated demand but may not be permanent. Julia Mills, a food and drink analyst at Mintel, predicted social-media attention for matcha could wane but that matcha will likely remain on menus for some time because it appeals to customers interested in wellness, antioxidants and a lower caffeine profile than coffee. Younger consumers, particularly millennials and Generation Z, are more likely to have tried matcha, she said.

Retailers and suppliers are weighing whether consumers will switch to alternatives if prices continue to climb. Mordecai said he has seen more demand for matcha in the past year than in the nine years before that and speculated that rising costs might push drinkers toward other Japanese teas such as hojicha, a roasted green tea. Producers and importers also noted technical trade questions that could affect prices: it is unclear whether tea could be exempted from tariffs as a natural agricultural product, an accommodation previously made for items such as cork by U.S. trade policy makers. The Commerce Department and the U.S. Trade Representative did not respond to messages seeking comment.

For now, industry leaders say consumers should expect higher prices and some shifts in sourcing. Suppliers and cafes are exploring alternative origins and grades of matcha, and some are considering modest menu price increases to spread the impact. Whether rising prices will dampen demand or merely reshape the market depends in part on consumer appetite for premium matcha and how quickly producers can expand capacity to meet growing global popularity.