Whether it is in your morning latte or your afternoon treat, matcha has quietly become a staple in many diets. But as demand grows and supply tightens, this green tea powder is teaching us a lot more than just how to stay satiated – here is what global shortage of matcha reveals about scarcity in our modern world.
[Elly studies Politics, Philosophy and Economics (PPE) and Psychology, and is a writer at ESSA. She is interested in exploring how ideas from economics, behavioural science and political theory can inform one another in meaningful ways. With her interdisciplinary academic background, she aims to explore the intersection of everyday life and abstract ideas.]
Be it in a latte, pastry or ice cream, many of us turn to small treats for a moment of delight. Said to have gained global popularity in the past few years, matcha – a powdered form of Japanese green tea – is known for its vibrant green colour, health benefits, and umami taste (Sokary et al., 2023). However, this unprecedented surge in demand has contributed to supply shortages.
Drivers Behind Matcha’s Blooming Demand
Driven by its popularisation on platforms such as TikTok and Instagram, matcha is often showcased in aesthetically pleasing drinks and desserts. The numbers speak for themselves: currently, there are more than 1.9 million posts under the hashtag ‘#matcha’ on TikTok, with many creators rating the best matcha served by cafes in their city, or comparing different matcha brands for at-home brewing. Further, matcha is branded as a gentler option for caffeine intake compared to coffee. This is because an average cup of coffee contains 80-100mg of caffeine, while a standard serving of matcha contains around 70mg (Jobe, 2024; MedicalNewsToday, 2024). Matcha has also been reviewed to have a positive effect on physical and mental health upon consumption, through its potential to prevent diseases and support cognitive function (Kochman et al., 2020). From its benefits to the body to its simply alluring appearance, it is no wonder that matcha lattes and other products are capturing the attention of more and more consumers.
Supply Falling Short
According to Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF), Japan produced 4,176 tons of matcha in 2023, almost tripling the 1,471 ton output in 2010. Despite this, Japan’s tea production dropped by more than 20% during this period, largely due to the ageing farm population (Kyodo News, 2025). As a result of rising demand, Japan’s tea industry is struggling to keep up.
Companies such as Ippodo and Marukyu, which have strong presences in the matcha market, have announced unprecedented purchase restrictions on the tea powder (The Japan Times, 2025). Matcha products are often completely sold out in Japan, while businesses in Australia are experiencing major delays in the supply of the imported product (Hogan, 2024). This is largely attributed to the fact that matcha – or, at least, high-quality matcha – can only be made from spring tea leaves (Global Japanese Tea Association, 2025).
Additionally, only a small proportion – reportedly 6% – of the tea grown during spring is actually used for matcha, contributing to its inherent scarcity (Global Japanese Tea Association, 2025). Further compounding the issue is the production process: matcha is made by gradually grinding leaves into a fine powder, which is a labour and time-intensive step that cannot be rushed to assure quality. When global demand surged, existing grinding facilities were unable to scale up fast enough, leading to delays that the Japanese matcha market was unprepared to accommodate.
Increased Costs and Government Intervention
To compensate for these pressures, some Kyoto-based producers of premium-grade matcha have recently raised their prices by as much as 40%, making price hikes in cafes and restaurants increasingly likely (Hrovat, 2024). This is an example of cost-push inflation: as production costs rise, producers pass these expenses onto consumers through higher prices. For consumers, this means paying more for the same matcha latte, often without a corresponding increase in its quality or size. Over time, these rising costs can reduce purchasing power, particularly for items once seen as affordable indulgences.
An example of a fiscal policy that was recently introduced by MAFF was the subsidy scheme aimed at encouraging tea farmers to increase the cultivation of tencha – the tea leaf that is grinded to make matcha. This would support farmers in shifting their focus from other tea varieties, such as sencha (a type of green tea that is not used to make matcha), to tencha production, ensuring more attention is placed on the global matcha demand (Kyodo News, 2025). By allocating subsidies, the Japanese government hopes to make tencha cultivation more financially viable for farmers, thereby increasing overall supply and reducing pressure on the matcha market.
As we have observed, the demand for matcha does not seem to be dissipating anytime soon – this may seem ironic. If rising prices are not driving consumers away from their daily sweet treat run, what does this say about our attitudes towards matcha?
Can Quality Matcha Be Substituted?
Matcha is a relatively inelastic product – at least as of right now – meaning that consumers continue purchasing it even as prices rise. Not only does social media influence consumers to be more discerning, clever marketing often brands matcha as a luxury product; terms like ‘ceremonial’ or ‘premium grade matcha’ actually hold little formal recognition in Japan, but attaching these words to a matcha brand creates a perception of exclusivity and higher value (Wong, 2024). Even the daily ritual of making a matcha latte at home – the careful measuring of powder, checking the water temperature, and whisking with deliberate strokes – cultivates a mindful but trendy routine that many find rewarding. These factors likely justify its higher cost in the eyes of consumers, and outweigh concerns about price.
Moving Forward
Personally, despite its current inelasticity, I wouldn’t be surprised if the matcha hype simmered over time. Over the years, we have seen various healthy fads on social media, such as ‘nature’s cereal’, Erewhon smoothies and sea moss. The concept of a health trend will likely always exist — but the specific products seem interchangeable that are rotated in and out. Matcha’s perceived exclusivity and price point definitely add to its appeal as a kind of wellness luxury; that said, whether it will endure beyond this cycle may depend on whether it can move from an aesthetic trend to a habitual staple.
As the Japanese government intervenes to support increased Tencha cultivation, and suppliers adapt to the rising demand, the matcha market is likely set to stabilise over time. Supply shortages and price hikes may persist in the short term; however, the arrival of the spring harvest each year will gradually replenish stocks. So, for matcha lovers everywhere, there is reason to be optimistic that this beloved green treat will continue to be available… just perhaps at a slightly higher price for now.
References
Cafes and suppliers say matcha demand outpacing supply. (2024, December 3). ABC News. https://www.abc.net.au/news/2024-12-04/matcha-shortage-in-australia-sparked-by-boom-in-demand/104672358
Global Japanese Tea Association. (2025, January 29). Unpacking the Matcha Shortage: An Insightful Look. Global Japanese Tea Association. https://gjtea.org/unpacking-the-matcha-shortage-an-insightful-look/
How much caffeine in a cup of coffee. (2019, April 17). https://www.medicalnewstoday.com/articles/324986
Jobe, N. (2024, July 31). The new green giant: How matcha took over the world. The Guardian. https://www.theguardian.com/food/article/2024/jul/31/the-new-green-giant-how-matcha-took-over-the-world
Kerr, C. (2025, February 23). Japan struggles to fend off a world without enough matcha. The Japan Times. https://www.japantimes.co.jp/life/2025/02/23/food-drink/matcha-shortage-global-solutions/
Kochman, J., Jakubczyk, K., Antoniewicz, J., Mruk, H., & Janda, K. (2020). Health Benefits and Chemical Composition of Matcha Green Tea: A Review. Molecules, 26(1), 85. https://doi.org/10.3390/molecules26010085
Matcha limits set and prices set to soar as global shortage hits Australia. (2024, November 1). Good Food. https://www.smh.com.au/goodfood/sydney-eating-out/global-matcha-shortage-hits-australia-as-skyrocketing-popularity-rivals-coffee-20241101-p5kn6v.html
NEWS, K. (n.d.). Japan looks to cash in on matcha boom to boost green tea exports. Kyodo News+. Retrieved May 21, 2025, from https://english.kyodonews.net/news/2025/01/ed8f08aec023-japan-looks-to-cash-in-on-matcha-boom-to-boost-green-tea-exports.html
Sokary, S., Al-Asmakh, M., Zakaria, Z., & Bawadi, H. (2023). The therapeutic potential of matcha tea: A critical review on human and animal studies. Current Research in Food Science, 6, 100396. https://doi.org/10.1016/j.crfs.2022.11.015Understanding the real difference between ceremonial and culinary grade matcha. (n.d.). Naoki Matcha. Retrieved May 22, 2025, from https://naokimatcha.com/blogs/articles/ceremonial-grade-matcha
