2 days ago
Matcha's 'unprecedented' TikTok-fuelled popularity brews a global shortage
At a suburban cafe in Sydney's south, a perhaps unexpected drink is outselling coffee.
"When we first opened, people were asking, 'Oh, what's matcha? How does it taste?'" says Elvan Fan, the owner of Moon & Back Cafe, which serves both beverages.
"But now, people are just obsessed with it."
With its rich aroma, mellow umami and vivid green colour, matcha has become a staple in lattes and confections in Australia and around the world.
The Japanese green tea powder is made from young tencha leaves of the Camellia sinensis plant.
It contains caffeine and the amino acid L-theanine, which some researchers say promotes calm alertness without the crash of coffee.
When Ms Fan first opened her cafe five years ago, she sold around 6,000 matcha drinks annually.
Now, she sells more than 20,000 a year — accounting for over half her total drink sales.
"Now people may have other choices. They can come to a coffee shop and grab a matcha as an alternative drink," she says.
While matcha has been used in Japanese tea ceremonies for centuries, its global popularity has exploded — especially among millennials and gen Z — thanks to viral videos featuring homemade matcha latte recipes and rating brands.
The Kyoto-based Global Japanese Tea Association describes the impact of the current hype as "unprecedented".
"For the first time in history, we are experiencing a matcha shortage, since autumn of last year," says association co-founder Anna Poian.
The organisation has not observed such a surge in demand since Häagen-Dazs launched its green tea ice cream in the 1990s and Starbucks introduced matcha lattes in the early 2000s.
Ms Poian says Japan's post-COVID-19 booming tourism industry has exacerbated the shortage.
"Many foreigners would buy lots of matcha to bring back home as souvenirs, sometimes even in bulk or sometimes, we've heard, to resell."
In 2024, a record number of more than 36 million people visited Japan, including a record 920,000 Australians, according to official data.
Despite major Japanese producers enforcing purchase limits, such as "one item per person", popular matcha brands continue to sell out shortly after restocking.
Kyoto-based Ippodo Tea tells The Business "demand has surged beyond all expectations", adding that "all of our matcha varieties are currently limited".
In Australia, Yukino Matsumoto runs a wholesale importer of matcha from Japan, supplying cafes and restaurants.
She says the disruption has been severe.
The founder of the Sydney-based Simply Native says if she does not secure stock quickly, "the next day you can't get 500kg of matcha".
Cafe owner Ms Fan says the shortage has prompted her to pre-order supplies and keep more in stock, to prevent it from running out.
At the year's first tea auction in Kyoto, tencha prices nearly doubled year-on-year, surpassing 8,000 yen ($87) per kilogram, which is a record high.
Renowned matcha producer Marukyu Koyamaen has already announced price hikes from July, saying its matcha products will increase by 50–60 per cent.
Although Ms Matsumoto's matcha sales have tripled this year, she says her costs have nearly doubled.
"We're all sharing the pain — producers, distributors like us and customers. Price is going to go up for sure," she says.
The government of Kyoto Prefecture, one of Japan's major matcha-producing regions, says it is hard to measure the exact shortfall.
A spokesperson tells The Business that overseas demand currently far exceeds Japan's 15,000-tonne export target for 2030.
"It is difficult to calculate specific figures because we are turning down exceptionally large orders from countries with high demand for tea, such as the United States, Germany and Dubai."
In 2023, matcha made up more than half of the 8,798 tonnes of green tea exported from Japan — double the volume of a decade ago, according to Japan's Agriculture Ministry.
But increasing matcha supply is not as simple as scaling up.
Daniel Tan, a professor in agronomy from the University of Sydney, notes high-quality matcha is harvested only once a year and is "a specialised crop".
He says farmers shade the plants about three weeks before harvest, to boost chlorophyll and amino acids — the source of matcha's vibrant colour and umami flavour.
After harvesting, the leaves are steamed for 10 seconds, air-dried, then ground using traditional stone mills, which produce just 40 grams an hour.
"All these very tedious procedures actually slow down the scale-up of matcha production," Professor Tan says.
Recent poor weather, such as frost, has also hit harvests, which he notes has reduced the production by 30 per cent in some parts of Japan.
While Japanese producers are trying to increase planting and upgrade machinery, those efforts may take years to yield results.
Ms Matsumoto expects the shortage could persist for years.
"I'm so uncertain what's going to happen in the next few years, and it makes it really hard to plan."
As for Ms Fan, she is optimistic about her current stock levels — but knows higher prices for matcha lattes are inevitable.
"We can expect a little price change in the future, but it won't be a very big jump."
