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Anticipated to grow at a rate of 7.1% annually, the matcha market is expected to see revenues soar past $81 million by 2030, representing a $27 million surge over current figures.
However, supply challenges persist. The cost of tencha, the primary leaf used to produce matcha, has skyrocketed. At a recent auction in Kyoto, prices reached an unprecedented 8,235 yen per kilogram (approximately $82 per kg), marking a 170% increase from the previous year, as reported by the Global Japanese Tea Association.
“Japanese matcha, on the other hand, is sweeter and more delicate, ideal for hot drinks or pairing with dairy milk.”
Matcha’s popularity is surging around the world, an opportunity for Chinese suppliers amid price hikes in the Japanese industry. Source: SBS News / Nicole Gong
The cafe said it was the first in the city to offer the alternative — but it’s unlikely to be the last.
Kumar said the price of premium “tier-one” Japanese matcha has jumped from $390/kg to $500/kg in the past 12 months.
Melbourne matcha cafe owner Umesh Kumar said his profit margins are shrinking as Japanese matcha prices soar. Source: SBS News / Nicole Gong
His cafe uses about 120kg a month. While he’s kept prices stable, his profit margins are shrinking.
“If the [Japanese matcha] pricing is going more than $600/kg, that means one cup’s cost will be $5.80. It’s not worth it to run at $9,” he said. “If nothing changes, Australians could be paying over $12 a cup soon.”
China’s matcha comeback
“In 2023, China might not have been ready, but 2025 is different — many factories now receive strong subsidies to expand their matcha production lines.”
Zihan He travels to different tea regions in China and globally to promote Chinese tea. Credit: Supplied
While Japan’s matcha enjoys international prestige, He pointed out that matcha actually originated in China.
Now, matcha is experiencing a revival in China, with major production hubs in the Zhejiang and Guizhou provinces.
What are the key differences between Chinese and Japanese matcha?
Still, He remains optimistic: “China may be slow from zero to one, but once it learns, it moves fast from one to one hundred.”
