Matcha is more popular than ever around the world. Demand has exploded in recent years, especially for “ceremonial grade” matcha. However, in the second half of 2024, several of Japan’s largest matcha producers and blending companies announced that they would not be accepting new wholesale orders and would even limit retail sales.

This is not a bubble, but a real, complex problem. In the following, we will try to explain why the Japanese matcha industry is in crisis, how this situation developed, and what it could mean for tea lovers around the world.

📈 Demand is growing, but supply can't keep up

The root of the current shortage is surprisingly simple: demand is growing much faster than supply. However, the problem is not currently in the lower-quality, “culinary” matcha segment, but in the premium category, where traditional, traditional, slow methods limit capacity.

If you've started drinking matcha in the last 1-2 years, you've most likely contributed to this. Now let's look at what it all means on the other side.

⛩️ 800 years: the journey of matcha from tea ceremonies to cafes

The history of matcha in Japan began in the 13th century, and for centuries it was consumed exclusively by nobles, samurai, and tea ceremony practitioners (tea artists). It was considered a real luxury item. The tea was hand-picked once a year and ground at home from tencha (the raw material for matcha before grinding). (So it was typically the tencha that was sold, not the finished matcha powder.)

Quick start: Tencha is the stemless, “leafy” ingredient that is ground and becomes matcha. We have already made a YouTube video about matcha and we also have a blog article about it – it is worth watching and reading.

• Until the late 1800s, raw tencha production did not exceed 40 tons.
• After hand grinding, this was enough for about 27,000 people to consume one cup of usucha per day, annually.

Japan opened its borders in the late 19th century (after the 250-year Sakoku period). Modernization began in the early 20th century, with the introduction of electric grinders (1912), refrigerated storage, and the widespread sale of ready-made matcha (instead of home-ground tencha), which allowed the industry to grow. There was also a demand for lower-quality matcha, such as for the Japanese military, and for light, sweetened summer refreshments.

Key moments driving demand

• 🍨 1996 – “Häagen-shock”: Häagen-Dazs introduces matcha ice cream – opening up a serious international market for the first time.
• ☕ 2005 – “Starbucks shock”: the matcha latte appears – matcha finally enters the mainstream beverage world.

🚜 Machinery, artificial shading, second harvests

At the beginning of the 20th century, sencha machines and cheaper, faster grinding were already used to produce matcha. Improved “clonal” tea plant varieties appeared, replacing the natural Zairian varieties grown from seeds. From the 1970s and 1980s, they gradually switched to machine picking, artificial (not straw) shading, and they began to make tencha from second and even later harvests ( nibancha , sanbancha , etc.) – something that had previously been unthinkable (for 700 years). (Until then, only the most pristine first harvest was processed – ichibancha .)

• By 1995, Kyoto Prefecture still produced ~50% of Japan's tencha crop.
• By 2012, the harvest reached ~1,400 tons, increasing to ~4,000 tons by 2023.
• However, this does not mean that all tea was of premium quality.

• Only ~5% of tencha is traditionally harvested by hand.
• Only about one-third of the total harvest is considered high-quality, traditional tencha.
• That's about 2 million cups of usucha (weak tea for tea ceremonies) per day – and that's roughly the number of tea ceremony practitioners in Japan.

The real bottlenecks in production

1. 🌱 New plantations designed for tencha? Not tomorrow.
   Switching from sencha or establishing a new plantation from planting to harvesting: 3–5 years.
2. ❄️ Stock? Out of stock.
   Larger tencha blending companies store tencha in deep freeze for years to ensure stable quality. In 2024, this reserve was also exhausted.
3. 🪨 Grinding? The mill grinds slowly.
   A traditional stone mill grinds ~40 g of matcha per hour. There are about 7,500 such mills in Japan, each with a capacity of ~100 kg per year. It takes ~1 month to make a new mill, and only a few master stonemasons know the craft.

🌍 What drove the demand?

• The return of tourism to Japan, especially Kyoto.
• Tea companies trending on social media (e.g. Ippodo, Marukyu Koyamaen).
• The trend of "ceremonial quality" matcha - even if the term is not technically accurate; "extra green" drinks in photos and videos (Instagram/Facebook, TikTok).

This demand is concentrated on higher quality matcha, so the category that tea ceremony practitioners and premium tea shops are looking for is sold out.

🧪 Don't choose the most expensive one, choose the right one

• Koicha: high quality, thick tea – not always enjoyable when diluted, as it gives a “flat”, empty feeling. It is designed to be made thick.
• Usucha: softer, thinner – a different blend is ideal for this; its complexity comes into play in this proportion.
• Matcha latte: often a stronger, "lower" category is better, specifically for milk, so that the flavor is not lost.

🔮 Where to next?

• Price increase in the premium matcha market (as early as spring 2025).
• Several culinary-grade matcha can be made.
• Some Japanese manufacturers may stop exporting to serve their old partners – mainly tea art schools.

🧘♀️ What can you do as a tea drinker?

The most important thing: use the right tea for the right purpose!

• Before buying, ask: what is it recommended for (koicha, usucha, latte)?
• Always buy from a tea shop where matcha is stored refrigerated.
• Don't get hung up on the "ceremonial" label - it alone is no guarantee of quality.

At Teavolution, we're working to help you navigate the world of matcha in a transparent way - even during these challenging times.

Source of Japanese agricultural data: tezumi.com

Video: https://youtu.be/CZyAT1jBixo