Japan’s “Matcha Bubble”: Tencha Prices 2–3x (ITO EN Interview)

In a recent AERA DIGITAL interview, a department-level executive at ITO EN—one of Japan’s leading beverage companies—described how Japan’s matcha supply is tightening and why tencha prices have surged to unprecedented levels.

For US café owners, purchasing managers, and buyers importing matcha from Japan, these upstream changes can show up quickly as tighter availability, longer lead times, and faster-moving wholesale pricing.

Japan is entering a “matcha bubble”

The interview describes a market where procurement has become increasingly difficult even for major players, as producers have little to no spare capacity beyond existing commitments.

The executive also warned that market conditions have reached levels that would have been hard to imagine in the past, reflecting intense competition for matcha raw material.

A key signal: tencha prices at 2–3x

A central point from the interview is cost: tencha—the raw material used to produce matcha—has reportedly climbed to roughly 2–3 times its typical market price.

The executive said this is far above previous assumptions, and described today’s tencha market level as an “unthinkable” price range compared with earlier years.

Export growth is accelerating the squeeze

The interview links the matcha boom to around 2023 (after the pandemic), driven by overseas demand for sweetened matcha latte-style drinks and matcha sweets.

It also cites Japan’s green tea export value hitting a record 36.4 billion yen last year, and reaching 53.9 billion yen by October this year—already exceeding last year’s full-year total—while noting that most exports are powdered green tea including matcha.

Why this is not a simple “temporary shortage”

According to the interview, matcha is unusual in that overseas demand can exceed domestic demand, and a weaker yen increases export profitability—encouraging producers to prioritize export response and further tightening supply.

The executive added that even before the matcha boom, Japan’s green tea production had been trending down due to structural constraints such as an aging grower base and a shortage of successors.

What US café buyers can do now

• Buy earlier: The interview suggests that “extra” procurement beyond established sourcing routes is increasingly difficult, so earlier forecasting and earlier buying matter more than before.
• Expect pricing to move: With tencha trading at 2–3x typical levels, wholesale matcha pricing may need more frequent adjustments than an annual update cycle.
• Menu-design for volatility: Consider tiering matcha offerings (for example, a core latte-grade item and a limited seasonal/special item) so shortages or cost spikes don’t force a complete menu stop.
• Set expectations with customers: When price updates happen, explain that the driver is upstream tencha costs and the broader supply squeeze described in Japan’s industry reporting.

Tea term (Japanese): Tencha

Tencha (碾茶) is the shade-grown green tea leaf material produced specifically to be ground into matcha; when tencha becomes scarce or expensive, matcha supply and pricing typically tighten as well.

Source

AERA DIGITAL: 市場価格は2～3倍「抹茶バブル」が到来　過熱する争奪戦に伊藤園の担当部長「考えられない価格帯」