Why Matcha Prices Are Rising in 2025

If you've noticed your daily matcha latte costing more lately, you're not alone. Matcha prices have increased significantly in 2025, with wholesale costs up 40% compared to last year. Here's what's driving the surge.

The Perfect Storm

Multiple factors have converged to create upward pressure on matcha prices across the global supply chain.

1. Climate Impact on Production

Japan's primary matcha-growing regions have faced unprecedented weather challenges:

• Unseasonal frosts damaged early spring harvests in Uji
• Heavy rainfall in Nishio reduced yield quality
• Increased temperatures affecting the shading process crucial for high-grade matcha

"We've lost approximately 15% of our expected harvest this season," says Takeshi Yamada, a fourth-generation matcha farmer in Uji, Kyoto. "Climate patterns that once were predictable are now unpredictable."

2. Surging Global Demand

The "matcha boom" that began in Western markets has accelerated:

• US matcha imports up 87% in two years
• European demand growing 52% annually
• Australian market emerging as major consumer
• China and South Korea competing for Japanese matcha

3. Labor Challenges

Traditional matcha production is extremely labor-intensive:

• Handpicking first flush leaves
• Careful drying and deveining
• Stone-grinding into fine powder

Japan's aging farming population and younger generations moving to cities have created labor shortages. Finding skilled workers willing to do the delicate work of matcha production has become increasingly difficult.

4. Quality vs. Quantity Pressure

As demand increases, some producers face pressure to increase output at the expense of quality. High-end producers committed to traditional methods can't simply scale up production, limiting supply of genuine ceremonial-grade matcha.

Impact on Different Grades

Not all matcha is affected equally:

Ceremonial Grade: +40-50% price increase These high-end matchas are most affected due to limited production capacity and inability to scale traditional methods.

Premium Grade: +30-40% price increase Mid-tier matchas see moderate increases as supply constraints affect all quality levels.

Culinary Grade: +15-25% price increase Lower grades used for cooking and baking are less affected as they can be produced more efficiently.

What Cafes Are Doing

Coffee shops face difficult decisions:

Absorbing Costs Some cafes are eating the price increases to maintain customer loyalty, accepting lower margins.

Raising Prices Many have added $0.50-$1.00 to matcha drink prices. Most customers have accepted the increases.

Adjusting Portions Some shops use slightly less matcha per drink, though this risks quality concerns.

Sourcing Alternatives A few cafes have switched to less expensive (but potentially lower quality) suppliers. This is controversial among purists.

Red Flags for Consumers

With high prices, some sellers are cutting corners:

• Suspiciously cheap "ceremonial grade" - Likely mislabeled culinary grade
• Bright neon green color - May indicate artificial coloring
• Unknown origin - Genuine matcha should specify Japanese region
• Old harvest dates - Matcha loses quality after 6-12 months

Looking Ahead

Industry experts predict prices will remain elevated through 2025, with potential stabilization in 2026 if:

• Weather patterns normalize
• New farming technologies are adopted
• Alternative growing regions develop
• Sustainable farming practices scale

"This is the new normal," explains tea industry analyst Yuki Sato. "Matcha will never return to pre-2020 prices. Climate change and global demand have permanently shifted the market."

What You Can Do

For Regular Matcha Drinkers:

1. Buy direct from Japanese suppliers when possible
2. Store properly (airtight, refrigerated) to preserve quality
3. Learn to prepare your own - saves money vs. cafes
4. Don't sacrifice quality for price - bad matcha isn't worth any price
5. Support sustainable farming practices

For Cafes:

1. Build relationships with ethical suppliers
2. Educate customers about quality and sourcing
3. Be transparent about price increases
4. Consider offering multiple quality tiers
5. Invest in staff training on proper preparation

The Silver Lining

While higher prices challenge accessibility, they're also driving positive changes:

• Increased investment in sustainable farming
• Greater appreciation for quality and craftsmanship
• Development of organic certification programs
• Innovation in production methods
• Fair compensation for Japanese farmers

As with specialty coffee before it, matcha's evolution into a premium product could ultimately benefit everyone in the supply chain - as long as quality and ethics remain the priority.

The matcha market is maturing, and with maturity comes both challenges and opportunities. The key is ensuring that growth remains sustainable and benefits the farmers who have preserved this tradition for generations.