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More than an hour before Nakamura Tokichi Honten tea house opens, a queue has formed along its outside wall and down the main street of Uji. When the doors are unlocked, each person will be allowed to buy one small metal tin of matcha powder.
Among the nationalities represented in the line are the US, Thailand, the Netherlands, China, Greece and Argentina. Many devotees have spent days in Uji — a picturesque town outside Kyoto famed for its roasters and its centuries-old teacup craftsmen — to secure sufficient quantities of their prize. What little stock the shops have is usually sold out completely within an hour.
It is a microcosm of global matcha mania. Jiro Katahira, a shaggy-haired 41-year-old tea-obsessed farmer, says he is inundated with emails from traders, cafés and retailers around the world begging for the umami-flavoured green powder made from tea leaves.
“One email came from Benin. I thought, ‘Where on earth is that?’ I had to look at a map to see where it is,” he says, standing in his green tea field with Mount Fuji visible behind wisps of clouds. “I told them, ‘I can only make a small amount and don’t mass produce.’ And they replied, ‘I’ll give you the money to mass produce.’ That’s out of the question though.”
Katahira started producing small batches of matcha last year, making big profits from the 75 kilogrammes sold this year. Next year’s supplies are already sold out. He is profiting from a “double boom”, he says, as the “matcha bubble” has spilt over to green tea, driving leaf prices up three-fold. All his debts will be repaid within years, new machinery will be ordered and the inflow of requests will be batted away.
Global consumer appetite for the finely ground powder has been ignited by matcha lattes, matcha-flavoured KitKats and a range of other sweet treats from ice creams to cookies that use the flavouring. Propelled by its social media friendly “matchatok” bright green colour, heightened health awareness during Covid-19 and Japan’s tourism boom, sales are on fire.
No longer an esoteric drink for health freaks and Japanophiles, matcha is now a staple in Starbucks and trendy cafés. “Uji matcha is the best anywhere in the world,” says Sam Giordano, a native of New York who arose at dawn to secure her position in the Nakamura Tokichi Honten queue. “I’ll get my allowance here, because it’s the first to open, then we’ll go down the street to the places that open later and get some more. This isn’t for gifts. I’m a matcha addict.”
Japan’s exports of powdered green teas were up 75 per cent to ¥27bn ($177mn) in 2024 and have trebled since 2019. It has already exported twice as much matcha and green tea, in value terms, during the first seven months of 2025 as it did in the whole of 2020. The price of Uji’s machine-harvested leaves for matcha production has tripled since last year, to ¥14,141 per kilogramme, according to the JA Zen-Noh Kyoto, the regional branch of a farmers’ co-operative. Supply cannot keep up and the strains are being acutely felt.
“Honestly, it’s so severe that I can’t bow my head any further in apology,” says Kazuhiko Nakajima, head of international business at Ito En, Japan’s largest green tea supplier. “All I can say to customers is, ‘Sorry, please wait until May next year’ . . . All of this year’s supply is sold out. We have to turn down all new customers.”
Tea ceremony grandmasters lament that overseas buyers are pricing them out of the highest grades of matcha, only to destroy the subtle flavour with copious sugar and milk.
Matcha’s supply crunch follows an earlier national rice supply crisis and has symbolised Japan’s painful return to inflation after three decades of declining prices — a development that rankled some voters enough for them to back a populist party in recent elections.
Many question the ability of domestic agricultural policy to scale up, modernise and liberalise the nation’s fragmented farming sector as the country’s population rapidly ages.
Farmers and traders debate the longevity of the boom; with some worrying that it will prove to be a fad similar to “Dubai chocolate” or kale, while others insist it is a structural growth story, like coffee. But for now, the priority is just to catch up with the demand.
“It’s crazy right now. All the stakeholders want to scale up the whole supply chain,” says Jason Eng, business development at Kametani Tea Company, a bulk supplier.
“But every section has a really massive problem.”
The matcha supply crisis has been brewing for years. The number of farms around Katahira’s plantations has gone from 40 to six, as ageing farmers have struggled to anoint successors.
Katahira describes himself as “Shizuoka’s panda”, a reference to the scarcity of young farmers in a country where the average farmer is 69 years old.
Changing tastes have also weighed on sales. Domestic green tea consumption has been in decline since the 1980s, depressing prices and giving farmers little incentive to find successors or invest in modernisation. Resultantly, annual domestic tea production declined from 96,000 tonnes in 2008 to 74,000 tonnes in 2024.
To make more matcha, farmers need more tencha, the type of tea leaf specially grown for grinding into powder. Tencha comes from the same plant as sencha, Japan’s everyday brewed green tea, but it is cultivated and processed differently. Many growers are now trying to convert sencha fields into tencha production to keep up with the matcha boom.
Haruhiko Yamada, director of sales at Kawasaki Kiko, Japan’s largest supplier of tea factory machinery, says his company is supplying 15 factories per year with production lines to steam, dry and sort tea leaves for matcha, up from three in 2020 and zero just over a decade ago.
Machines can process five times more leaves per hour compared with traditional brick furnaces. Work for the next two years is fully committed, Yamada adds, and matcha now makes up 70 to 80 per cent of revenues, which have staged a stunning recovery after dropping to half of their 1980s peak.
“We used to have a lot of conversations that went, ‘We’ll wait until next year or the year after as we don’t have the budget.’ It has now turned into a conversation of, ‘We’ll do one more factory and another one,’” he says.
The Japanese government can cover up to half of the expense of Kawasaki Kiko’s production lines, which cost about ¥300mn-¥400mn each, part of the state’s drive to tackle bottlenecks by boosting productivity and focusing on high-value goods.
Tomoyuki Kawai, the agricultural ministry’s deputy director of tea and fruits, says that aggregating tea fields will make farmers more likely to introduce mechanisation and automation. By March, all local regions in Japan had to create area plans that could accelerate farmland consolidation.
“By raising overall productivity and promoting a shift to higher-demand segments, we can expand tencha production, improve productivity in the industry as a whole, and reshape it to better fit demand,” he says.
But while factories have been mechanising, the tea gardens are lagging behind. Kagoshima, in the south, has made progress but steep slopes elsewhere are challenging. “Unfortunately, the speed of the population shrinking is overwhelmingly faster” than the introduction of automation, says Masayuki Maruyama, sales manager of Maruyama Tea, an integrated tea farmer, processor and wholesaler.
Given the squeeze on the supply of both matcha and green tea, conversions will reach a limit and new fields will need cultivating. But that will take time: at least five years from first planting to first harvest.
Supply snags are not limited to the fields. Small matcha packaging is typically done by hand because up to 15 per cent gets wasted when machines are used, says Eng. “Before this boom, we thought we would do it by hand. But they can’t keep up with the packaging,” he adds.
Processors that buy the raw leaves and turn them into powder or green tea are suffering as beverage groups cannot pass on all the costs to price-sensitive Japanese consumers. Despite booming exports, this year is expected to set records for bankruptcies in the tea-processing sector with 11 companies closing down by July, according to Teikoku Databank. Yamada said 33 factories closed in Shizuoka alone this year.
Shohei Ohtani drives his car through an overcast Los Angeles, before stepping out holding a luminous green plastic bottle. After taking a glug, the clouds clear and the baseball megastar says: “To become a better version of myself, there are things I never change: my green tea.”
Ohtani is the figurehead of a global expansion plan for Ito En, the producer of his beloved Oi Ocha, that aims to transform green tea from a domestic staple into an international brand. Ito En’s goals are grand: to rival Coca-Cola and for its bright green to be as recognisable on retailers’ shelves as the sugary drink’s red.
Japan’s biggest tea producer is aiming to expand from 40 to more than 60 countries by early 2029 and become truly global at 100-plus countries by 2040. The matcha boom has introduced global consumers to green tea and put momentum behind its growth like never before.
Nakajima, the executive behind Ito En’s international push, says the reason green tea had not previously caught on was its characteristic bitter and raw taste. “When it comes to matcha, it’s not like that as it’s tasty mixed with sweet or fatty contents. It’s the same as cacao — bitter when taken by itself but tasty together with chocolate or sugar,” he explains.
But the rush to increase tencha output by converting sencha fields has led prices for the latter to triple or even quadruple since last year. For Ito En, convincing consumers of the virtues of green tea has given way to securing enough supplies to meet demand and expand globally. “It had always been a problem of getting from zero to one but now it’s the complete opposite,” says Nakajima. “Supply chain is now the problem.”
Japan has long targeted exports of high-value agricultural goods and has set a target for ¥5tn of exports by 2030, up from ¥1.5tn in 2024, to diversify its economy beyond automobiles and boost farmers’ income. But surging demand has pushed up Oi Ocha’s price a further 11 per cent this month to ¥216 per 600ml bottle, up from ¥151 at the start of 2022.
Worried about the threat from Japan’s declining farming population, Suntory and other big beverage groups have over the past decade introduced long-term contracts that pay above market prices. Ito En is stepping that up further, establishing a dedicated supply chain team to strengthen its procurement network and expand contracting activities.
“We’re investing aggressively in the factories themselves and we’re looking at all of these measures — potentially even including M&A — to strengthen our system,” says Nakajima.
“From here, supply is going to increase. We won’t catch up, but we’ll try our best to chase the growth as much as we can.”
Even as demand booms and Japanese producers rush to expand, those reading the tea leaves see a familiar cloud on the horizon: China.
The country is a huge market for tea, and some industry insiders fear government-sponsored Chinese consumer boycotts or influencers who become ill due to overconsumption of the tannin-rich and high-caffeine beverage turning against matcha.
On the supply side, they note that China is one of several countries with far more land and much better labour availability than Japan, and fear it could diversify its already huge production of green tea and compete more directly.
“I believe that the sharp rise in tea prices will settle down within two to three years,” says Rikiya Sato, general manager of beverages at Marubeni Foods, a trader. “China is a big tea producer, and if China can expand production volumes while seriously working on improving quality, the current surge in prices will probably subside.”
He fears Japan may drop its standards in the race to capture demand. “I’m worried that in the rush to increase volumes, anything and everything might be turned into matcha,” he says. “If that happens, we’d end up lowering the quality standard that we ourselves are recognised for. Once quality drops, other countries might be able to produce something similar.”
Tea traders say Chinese competitors are already on an aggressive sales drive that includes using chlorophyll, a green pigment, to brighten its matcha.
At the agriculture ministry, Kawai agrees that China will make inroads into lower grades of matcha and solve the shortages. “If a country with production capacity dozens of times larger switches into matcha, they can produce a considerable volume,” he says.
“Even if Japan cannot supply the entire global market, we must differentiate Japanese matcha from matcha made elsewhere, especially China.”
The global commercialism pushing Japan’s farmers to modernise their operations sits uneasily with the spirit of tradition, craftsmanship and attention to detail that built the country’s tea brand.
Toru Nanami, chief executive of tea wholesaler Hamasa-en, is urging the secretive industry to open up. He is working to get deep-pocketed foreign buyers of matcha to invest upfront to revive abandoned farmland in return for securing matcha supplies in five years’ time.
“This is a closed industry, so what individuals like me must do is to bring in outsiders,” he says. “Preserving tradition is important, but unless we also accept new ideas and push for reform, it will be hard for Japanese tea to compete globally.”
But back in Shizuoka, Katahira is convinced the matcha bubble will burst. He plans to stick with 3.5 hectares of farmland, after finding that cultivating more resulted in a lower quality. Matcha is a nice side hustle, he says, but he wants to focus on the “artwork” of green tea.
“The people rushing to make it are not thinking of matcha’s tradition or meaning, they’re just thinking of matcha lattes . . . At some point, the people coming into profit from matcha will chase the next big thing,” he says over a cup of green tea.
“The more you make, the more the quality goes down. If we do that, there’s no point making tea here.”
Additional reporting by Alex Drayton
Letter in response to this article:
Matcha matchmaking / From Raphael Chow, Managing Director & Co-founder, Brut Tea, London W1, UK