Why is there a shortage of matcha and will prices rise
Matcha is not merely a passing trend amplified by social media aesthetics. It represents centuries of cultural practice, wellness traditions, and community rituals.
What is matcha and why is it so popular?
Matcha is known as the Champagne of green tea, where the best leaves are stone-ground into fine powder, which dissolves in water to form a vibrant and naturally sweet green team. Matcha is made from the same plant as most teas, Camellia sinensis. However, the leaves undergo a unique process before harvest. This labour-intensive process is why Matcha is among the world's most expensive teas.
Matcha has moved from Japanese tea ceremonies to the shelves of every café and health food store. Its vibrant colour, antioxidants, and “calmer caffeine” energy have made it a favourite among wellness-conscious consumers. Platforms like TikTok and Instagram have propelled matcha further into the mainstream.
In Australia, matcha has become a café staple. Cafés in Sydney, Melbourne, and Brisbane now charge between $6 and $8 per matcha latte, with some high-end venues introducing premium offerings at higher prices. Even in smaller cities like Adelaide and Perth, demand has driven average prices up to $5.50 to $7.00 per serve. Australian imports of Japanese green tea rose by nearly 20% year-on-year in 2024, reflecting surging consumer demand.
Here's how prices have increased over the past 5 years:
| Year | Sydney | Melbourne | Brisbane | Perth | Adelaide |
|---|---|---|---|---|---|
| 2020 | $5.50 | $5.20 | $5.00 | $4.80 | $4.70 |
| 2021 | $5.80 | $5.50 | $5.30 | $5.00 | $4.90 |
| 2022 | $6.20 | $6.00 | $5.70 | $5.40 | $5.30 |
| 2023 | $6.80 | $6.50 | $6.20 | $5.80 | $5.70 |
| 2024 | $7.50 | $7.20 | $6.80 | $6.40 | $6.20 |
| 2025 | $8.50 | $8.20 | $7.50 | $7.50 | $6.80 |
Factors contributing to the matcha shortage
The global matcha shortage is the result of several interconnected factors. From supply chain bottlenecks to climate disruptions, the challenges are compounding at a time when demand is at record highs.
Global supply chain disruptions
Matcha production is concentrated in Japan, particularly in Uji and Nishio, where centuries of expertise ensure high quality. However, the sudden international demand has caused supply chains have become overstretched. Wholesalers are struggling to secure enough stock, and record-high prices are now filtering down to consumers. The cost of ceremonial-grade matcha has climbed to nearly $100 USD per 100 grams in global markets, compared to an average of $60 USD just 2 years earlier. Worldwide demand has grown so quickly that even large-scale producers cannot expand production fast enough.
Unlike coffee, which can be cultivated across multiple continents, true matcha requires meticulous cultivation and stone grinding. This consumer demand has caused cafés to reduce serving sizes or limit daily sales.
Climate change and agricultural challenges
Another major factor is climate change. The cultivation of matcha, derived from the Camellia Sinensis plant, is highly sensitive to environmental conditions, much like winemaking. Rising temperatures and unpredictable rainfall are affecting yields in Japan, making crops more vulnerable to pests and disease. Japanese producers reported a 15% decline in harvest yields in 2024 compared to the previous year.
Extreme weather events, including record heatwaves in Uji (Kyoto) and heavier rainfall, are already reducing the quality of tea leaves used for matcha. This means less ceremonial-grade powder is available for export. With limited growing capacity, producers are looking to alternative regions such as Taiwan and China.
Implications for the hospitality industry
The matcha craze presents both opportunities and challenges for the hospitality sector. On one hand, cafés, hotels, and restaurants benefit from the profitability of trending drinks and can often charge a premium for matcha-based drinks. The ingredient’s versatility also extends into patisseries, cocktails, and experiential menus, allowing hospitality businesses to tap into consumer curiosity.
However, the reliance on a single imported product creates vulnerability. As shortages worsen, venues risk customer dissatisfaction, reduced menu variety, and increased operational costs.
Sustainability plays a crucial role in ensuring the long-term viability of matcha production and consumption. Just as other products such as seafood and seasonal vegetables are managed through regulated harvesting and responsible sourcing, Matcha production and consumption should be approached with the same mindset.
Sustainable practices have the potential to mitigate pressure on supply chains, preserve cultural traditions, and support the livelihoods of tea farmers.
The future of matcha demand and price
Industry experts predict that demand will remain strong for at least the next 5 years.
Matcha’s integration into desserts, skincare, and packaged health drinks suggests it is no passing fad. Global matcha sales are projected to grow by 7.5% annually through 2030, underscoring the long-term demand. However, prices are unlikely to stabilise soon. Shortages in Australian cafés were observed as early as 2024, and the situation worsened into 2025, with record-high import costs. Global demand shows no signs of slowing, meaning matcha could remain a luxury item in the near future.
Businesses may need to adapt their menus and consumer expectations to navigate sustained shortages. Cafés and hospitality operators must prepare for consumer frustration if supply remains limited, as many may not understand the agricultural and cultural constraints that restrict matcha availability.
For consumers, this could mean higher prices per serve and for hospitality businesses, matcha may transition from a daily menu item to a premium upsell.
By fostering responsible usage and adapting consumption patterns, the industry can prolong the availability of matcha, preserve its cultural heritage, and ensure that this tradition continues to thrive amid modern challenges.
