The numbers on both ends are stark

The global matcha market was valued at around $4.3 billion in 2023, according to Grand View Research. One forecast projects growth to $7.4 billion by 2030, at roughly 7.9% annually. Demand is being driven by café menus, wellness purchasing, and social media exposure in the U.S. and Europe.

On the supply side, Japan had approximately 53,000 tea-farming households in 2000. By 2020, that number had fallen to around 12,000, a decline of roughly 57% over two decades. Kyoto Prefecture, the origin of ceremonial-grade matcha, dropped from 1,679 farming households in 2008 to 645 by 2023. More than half of active producers in Kyoto are over sixty years old.

New farms do not solve this quickly. Tea trees take five years from planting to first harvest.

The price signal is already visible

Tencha, the shaded leaf that gets ground into matcha powder, reached 8,235 yen per kilogram at Kyoto auction in 2025, up roughly 170% year-over-year, according to Reuters. When prices move that far that fast, it reflects a supply constraint with no short-term fix.

Matcha accounts for approximately 6% of Japan's total tea production. The raw material pipeline is narrow. Running sharply higher demand through it creates predictable pressure: some major producers have already introduced purchasing limits for certain products.

Japan's green tea exports reached 36.4 billion yen in 2024, up 24% year-over-year, according to the Japan Tea Export Promotion Council. Powdered formats, primarily matcha, led the growth. Export volume rose 16% in the same period.

The production geography is concentrated

Shizuoka and Kagoshima together account for the majority of national output. For tencha specifically, Kagoshima now produces around 38% of the national total, with Kyoto second. Eight prefectures together account for roughly 90% of national production. Disruption in any of those regions affects the global supply picture directly.

Kyoto maintains a price premium despite its smaller output. First-flush sencha from Kyoto trades at around 3,000 yen per kilogram, compared to a national average closer to 2,000 yen. The Kyoto Prefecture Tea Industry Promotion Plan, covering 2025 to 2029, sets an export target of 10.5 billion yen by 2029, more than double the 5 billion yen baseline recorded in 2023.

Structural shifts worth tracking

For importers and procurement teams, the plan outlines several shifts worth following. Kyoto is actively converting conventional farming to tencha production to meet demand. It is also investing in EU-compliant organic cultivation and pesticide residue standards through import tolerance registration, which involves requesting equivalence approvals from destination countries. The prefecture targets 14 new farming entrants per year by 2029, against a current rate of around 8.

Demand from domestic consumers has also shifted in form, not total volume. Household leaf tea spending in Japan fell to around 64% of its 2008 level, while ready-to-drink green tea beverage spending rose to around 146% of the same baseline. The consumer is still drinking green tea. They are not preparing it at home from loose leaf. Powder and processed formats are where growth sits.

What this means for sourcing

The market structure creates a specific problem for businesses building matcha into their supply chains. Volume procurement at stable prices is harder to guarantee than it was five years ago. Origin verification matters more when premium and commodity-grade matcha compete under the same category name.

Kyoto Prefecture has a certification system for premium grades, and a new certification specifically for Uji matcha is under development. The plan also references blockchain-verifiable traceability as a direction for differentiation, though this is not yet standard practice.

For cafés and beverage brands, the operational question is not whether matcha demand will grow. The trajectory across multiple forecasting firms and export data is consistent. The question is whether your sourcing relationship is durable enough to hold through a supply-constrained period that has no clear resolution date.

The farmers are fewer. The trees take five years to mature. The demand keeps moving.

Sources

Grand View Research matcha market report, 2023. Reuters tencha auction pricing, 2025. Japan Tea Export Promotion Council export data, 2024. Kyoto Prefecture Tea Industry Promotion Plan, 2025–2029. Japan Ministry of Agriculture farming household data.