Not so breaking news: there’s a matcha shortage. While there are already dozens and dozens of articles and podcasts about the shortage, as a tea professional and tea ceremony practitioner, I thought it'd be prudent to express my thoughts and opinions on what is going on, how we got to this state in the industry, and what this might mean moving forward.

Put simply, this shortage is one of supply and demand: demand has been rising steadily, but a recent surge (dubbed the “Matcha Boom” in Japan) has meant that supply has struggled to keep up, exerting pressure at every point along the matcha supply chain.

To understand this shortage more fully, I think it’s important to have the relevant industrial, historical, and cultural context. So before we address the current situation, let’s briefly look at the modern matcha supply chain (and its variants), dive into the past to get some historical context on how we arrived here, before returning to the present to see how and where the current situation is putting pressure on the industry.

The Matcha Supply Chain

 

Diving deeper into this is probably a topic for another blog post but here’s a brief overview.

There are a few variations on the modern matcha supply chain which are outlined in this mildly confusing flowchart (don't worry, I'll explain it). I've also included a glossary for some important terms.

Flow 1 (Market)

This is the current standard supply chain. Here, farmers harvest and process their freshly picked leaves into crude tencha (aracha). This aracha is then sold via auction at the wholesale market where tea producers bid on it. After buying tencha at the market, the producer refines the tea (shiagecha) and blends multiple tenchas together to create the desired flavour profile, adjusting ratios and ingredients to match their current offerings. The tencha is rested in cold storage until late summer/early autumn to allow the excessive green aromas dissipate and the flavour to mellow. After this resting, the matcha is ready to grind.

Flow 2 (Iretsuke)

Iretsuke (入れ着け) is the oldest system and has been in place for centuries before the first market opened up in the early 20th century. Instead of selling their tea at auction, farmers have direct annual contracts with the matcha producers who agree to buy their tencha every year for an agreed upon price. This enables lower prices for producers, guaranteed customers for the farmers, and a direct collaboration between the two. 

After this, the process is identical.

Flow 3 (Direct)

While most farmers only have access to an aracha factory (either owned or shared between a few farms), some farmers also refine, blend, and grind their own tea. The processes are more or less the same as what happens in the larger tea producers factories, but at a smaller scale.

Glossary

Aracha (荒茶): unrefined/crude tea. For matcha, this is specifically aracha tencha: freshly picked leaves that are steamed, dried and deveined. This crude tencha is the type of tea that is sold to producers either directly or on the wholesale market. It is not yet suitable for grinding into matcha

Aracha Tencha as sold at market (note the large leaf size)

Market (市場 - shijo): The wholesale market where crude tea is sold to producers. Farmers bring their aracha tencha to the market where representatives from producers examine, taste, evaluate, and bid on it. Evaluating crude tencha is a very difficult skill that requires years of experience.

Tencha (碾茶): the raw material for grinding into matcha. Shaded tea leaves that have been steamed, dried, and de-stemmed. Crude tencha (aracha tencha) is produced by tea farmers before it is sold to producers who refine it into refined tencha (shiage tencha, typically just called tencha) which is then ground into matcha and packaged for sale.

Refined tencha, ready to be ground into matcha

 

Shiage (仕上げ茶 - refining): This refining includes removal of stems (called 骨 - hone, lit. ‘bones’), along with sorting, sieving, and cutting the leaves down to the size seen above. Lastly,,,,,,,,,,,,,,, the tencha is blended and fired to finalise the flavour and dry out the tea further.

Blending (合組 - gōgumi): a traditional step taken by producers to create a matcha with a specific flavour profile at a specific price point. Blending takes place at the tencha stage before the resting and grinding of the teas, so the blenders (chashi - 茶師) must be well experienced in predicting how these processes will affect the blend. 

 

Producer: Buys crude tencha from the wholesale market or directly from the farmer and refines, blends, stores, grinds, and packages it for retail or wholesale.

A Brief(ish) History of the Matcha Industry

Tea Seller from Maple Viewers - Kanō Hideyori (mid 1500s)

With the frameworks outlined above in mind, let's look at how the matcha industry got to where it is today, and how the recent uptick in demand has stressed each link along this supply chain.

From its earliest days, tea in Japan was farmed and enjoyed by the Buddhist clergy before it spread to the elite—nobles, samurai, and wealthy merchants. While tea was accessible to the general public through stalls outside temples, the majority of the ‘good’ tea was only available to the clergy and the elite. Within the samurai and merchants classes, the practice of matcha drinking evolved into chanoyu (茶の湯), what we now know as the Japanese Tea Ceremony. The exact date for the birth of matcha remains unknown, but evidence shows that the whisked tea that would evolve into modern matcha was being consumed in Japan as early as the late 1000s, but widespread consumption and cultivation likely didn't start until the late 1200s or early 1300s.

Manual Tencha Sorting from "Illustrations of Uji Tea Production" by Saitō Motonari -1803

For the first 700 or so years of matcha production, from around 1200 to 1900, all of the matcha in Japan was only ever harvested once per year, and picked, processed, sorted, and dried by hand (with the aid of simple tools such as tweezers, screens, feathers, and charcoal heaters). The vast majority of the hand-producing techniques and culture of tencha that had developed over these centuries was lost in the rapid industrialisation of tencha production in the 20th century. Additionally, during most of its history, matcha was sold in its unground leaf form, tencha, to be ground at home (by hand) by the customer using a stone mill. As such, the vast majority of matcha was bought and sold as tencha, rather than matcha.

While the amount of tea produced steadily increased throughout this 700 year period, the exclusivity, price, and sheer manual labour involved meant that the production of crude tencha (aracha tencha) peaked at around 40¹ tonnes [for clarity, I’m using metric tonnes, i.e. 1,000kg] during the late 1500-early 1600s.

Historically, all of this crude tencha was manually sorted, refined, sorted again, screened, fired, blended into usucha and koicha etc., before finally being sold as tencha and then ground into matcha. After all of this processing and refining, the yield of the actual amount of refined tencha was about 50%¹, meaning these 40t of crude tencha produced around 20t of refined tencha, i.e. 20t of matcha. I’ll be using this 50% estimate moving forward to convert from crude tencha to matcha yields.

To put these numbers into perspective, let’s do some quick maths.

20t is 20,000kg which is 20,000,000g. Assuming a solid 2g of tea for a bowl of usucha, that’s 10,000,000 bowls of usucha per year. Divide that by 365 days to get 27,397 bowls of tea a day.

Which means 20t of matcha per year is enough tea for 27,397 people to have one bowl of tea every day. (And keep in mind, koicha was the fashionable beverage during the chanoyu vogue, which uses 3.5-4g/bowl). This might not sound like very many people at all, but keeping in mind the exclusivity of tea during most of Japanese history, this was plenty of tea to satisfy the tea-drinking population.

For the latter 250 years of this 700-year timespan (i.e. the Edo Period: 1600-1868) Japan had adopted a closed-border policy called sakoku (鎖国 - chained country). This, combined with a rigid social hierarchy with very little social mobility, meant that this matcha-consuming population remained relatively stable.

Tea Grinding from 酒飯論 (mid 1500s)

During this time, the Kyoto tea industry as we know it began to take shape. Many of today’s largest producers were either established in the Edo era or trace their roots to Edo-era farmers. Continuing from the innovation of artificial shading in the mid-1500s, the Edo era also saw an increase in matcha quality with the production and processing continuing to be refined and perfected, becoming closer to modern matcha. 

The first major sign of change was in 1854 when Japan was forced to open its doors (thanks Commodore Perry) and the ensuing dissolution of the existing power structure and succeeding rapid westernisation saw a complete evaporation of any interest in traditional Japanese culture, tea included. As such, in 1872, the production of crude tencha dropped to a record low of only 4t. Using the same math as earlier, that’s 2t of matcha: enough tea for a mere 2,739 people.

After these few years of rapid westernisation, certain members of the government wanted Japan to swing back hard in the other direction, doubling down on preserving and promoting traditional culture and values while making use of western technology. Part of this movement was the promotion of sadō (茶道 - tea ceremony) in schools and making it part of polite women's education in 1872. This opened up a large new market for matcha, as up until this point, sadō was virtually a male only practice. 

[Side note: this ‘nation-building’ era of Japanese tea history is very fascinating and worth a dedicated blog post]

While Japan tried to return to its traditions culturally, its embrace of technological progress heralded the arrival of industrialisation to the tea industry. While semi- and full mechanisation attempts of the more popular and more complicated sencha had already been underway since the mid-Meiji, it took until the early Taisho (1915-25) for the mechanisation of tencha and matcha. This was spurred by necessity as economic effects of WWI shook the Kyoto tea industry’s supply and labour markets. The following flurry of mechanisation and industrialisation is what allowed matcha to become as widespread and accessible as it is today:

• 1912 - the invention of the first electrically operated matcha mill
• 1913 - beginning of electricity transmission in Uji
• 1919 - The first mechanical tencha dryers (碾茶炉 - tencha-ro) began to replace manual drying on hoiro (焙炉) in 1919
• 1920s - Refrigerated grinding rooms and packaging of ground matcha into airtight cans

Horii-style Tencha-ro - 1920s

This rapid industrialisation of tencha production increased both average quality and production volume, while also transitioning the industry from the sale of tencha to customers to the sale of ground matcha to customers. Compared to the measly 2t of refined tencha produced in 1872, the end of the 1920s saw crude tencha production hit around 90t, meaning matcha production was around 45t—enough tea for daily usuchas for over 61,000 people (using the above maths).

This surge in supply opened matcha up to new customers outside the tea room. In Kyōto, people started using lower quality matcha to make ice cream, to make sweets, and to make a traditional treat called Uji-Shimizu (宇治清水), a mix of matcha, sugar and cold water for a refreshing treat on a summer day.

While production was already growing naturally to meet the induced demand, the Japanese Government also sought to increase production of cheap matcha to fuel the rapidly growing Japanese military and navy. To do this, in 1933 the Kyōto Prefectural Tea Industry Laboratory (京都茶業研究所) began to experiment with modifying existing sencha machines to produce low quality “tencha” called moga. Three years later, they also ran a study experimenting with alternatives to stone mill grinding using various mechanical grinders, such as compression grinders and shear grinders and ball and bead mills. Both of these cost-cutting techniques would later become widespread, so these early studies for the Japanese military were in the early stages of the culinary or ‘processing’ (加工用 - kakō-yō) sector of the matcha industry.

As these tests and studies on culinary matcha continued to take place, traditional matcha production—matcha intended to be consumed as usucha or koicha—remained the dominant side of the industry. That is, until 1985 when everything changed.

Let’s briefly look at what the traditional matcha industry looked like in Kyōto Prefecture in the mid-late 1970s, right before this paradigm shift.

The Matcha Industry in the 1970s

Kyōto Prefecture is the home of Ujicha and has been seen as the centre of matcha production, especially culturally, for centuries. At this point in the 1970s, virtually all of the 120 tonnes of tencha harvested annually were picked by hand from traditional, shizen-shtitate (自然仕立て - naturally tailored), honzu (本簀 - straw shaded) tea farms where the majority of tea plants were still seed-grown zairai (在来). All of these practices are extremely rare today and I don't know of any farm that still uses all three at the same time. Cultivars were still relatively new to the scene and although a few of those bred from Uji zairai (such as Asahi and Samidori) were gaining popularity, the majority of the fields were zairai. While the market did exist, much of the tencha was traded in the old iretsuke system (outlined above). At this point, Kyōto tencha had an average wholesale value of around ¥9000¹ per kilogram. 

Honzu-shaded Shizen-Shitate Tea Field at Yoshida Meichaen

However, in neighboring Aichi Prefecture (home of Nishio-cha) where some farmers began using mechanical plucking, the decreased labour costs and increased yield this afforded drove tencha prices down to only ¥3000-4000/kg¹. In 1980, Aichi began the practice of using second-flush leaves (二番茶 - nibancha) for tencha, ending nearly 800 years of tradition. First flush leaves (一番茶 - ichibancha) are the richest in nutrients meaning they have the best flavour and aroma. Up until this point it was the only picking ever used for high-grade teas such as matcha, gyokuro, and sencha. Second flush teas were typically used for black tea or bancha. 

Häagen-Dazs Onwards

With this context in mind, let’s fast forward a few years to 1985—the year of Back to the Future, Live Aid, and the explosion in demand for culinary matcha.

In response to this surge, Kyoto Prefecture started using mechanical harvesting for the first time in 1985, and some regions within the prefecture that traditionally only made sencha began to switch over to tencha production. This included Ujitawara in 1985, Ryotan in 1988, and Wazuka in 1989. Meanwhile, in neighboring Mie Prefecture, production of the abovementioned moga (i.e. low quality tencha made on sencha machines) began in earnest in 1985.

A decade later in 1995, Kyoto's tencha production had doubled to around 240 tons, and this was split 50-50 between handpicking and mechanical harvest. At this point, Kyoto still produced half of the nation's tencha, with the total national harvest being around 500t. To keep up with rising demand, Kyoto also began to use second-flush leaves for tencha production.

One year later, 1996 marks one of the biggest inflection points in matcha history (until now): the Häagen-Dazs Shock. This is the year that Häagen-Dazs introduced matcha ice cream, buying up heaps of Kyoto tencha in the process. This huge overseas influx of interest caused the tencha prices to shoot up over 150%. This compounded the earlier 1985 boom and furthered the rapid expansion of the culinary/processing sector of the industry. Another boost to this growth was the 2006 Starbucks Shock, which was when Starbucks introduced their first matcha latte.

In 2012, the national tencha harvest had risen to 1,400t, and by 2023, the last year that we have reliable data for, this had almost tripled to 4,000t. This still makes up only 5.6% of the total tea harvest in Japan, the other 94.4% being everything else: sencha, houjicha, bancha, kamairicha, gyokuro, etc.

What this harvest figure doesn't reflect is the actual quality of this tencha. Only about 5% of it is hand-picked, and roughly half of it comes from second harvest teas or even later harvests. Using the wisdom of some of those well-experienced in the industry, we can put this into perspective. While some of these numbers are hard to compute and thus are merely conjectural, it's estimated that the actual production of traditional high-quality tencha (i.e. destined to be sold as usucha or koicha) is only around 1300 tons, or roughly one third of the total tencha production.

Using the same math as before, this is enough tea for about 2 million people to have one bowl of usucha per day for a year. (Coincidentally, the number of tea ceremony practitioners in Japan is also estimated to be around 2 million, though that is an old estimate and trends show that number is in decline). Again, apart from the harvest data, some of these numbers are ballpark figures, but they can help us roughly understand where the industry is at.

This brings us to the present day which I’ll analyse in part 2!

---

¹桑原