The matcha market cracks under pressure

Once consumed mainly in small, formal tea ceremonies, matcha is now mixed into fruity lattes and preyed on by counterfeiters. Can it survive its own popularity?

Over four centuries, Japan built a tradition of drinking matcha that was based on four principles: wa, kei, sei and jaku, or harmony, respect, purity and tranquility. It took just a few years for a worldwide matcha craze to upend those values and replace them with disharmony, disrespect, impurity and fraud.

Highly respected Japanese firms are at war with scores of vendors who resell their matcha far above the normal retail price on Amazon, Facebook Marketplace and other sites.

Others are hawking the tea trade’s equivalent of $45 Chanel bags, counterfeit packages filled with third-rate product or with ordinary tea ground to a dull yellow dust.

Tea companies that have built their reputations over centuries are in despair. Marukyu Koyamaen, founded by Kyujiro Koyama in 1704, has been taking action against counterfeiters for eight years, fighting them in court and making its packages more difficult to copy.

Some of the fakes are filled with “low-quality powdered green tea,” Motoya Koyama, the company’s president and a direct descendant of the founder, said in an email interview. “It would be definitely a great harm to us if those customers who purchased these counterfeit products think that they are produced by Marukyu Koyamaen.”

Other practices, while not as deceptive, are wildly untraditional. Green lattes and smoothies are prepared with shortcuts (batched concentrate nicknamed batcha) and flavourings (banana bread!) that send ripples of horror down the spines of matcha purists. Baristas inhale so much airborne green powder that they joke about coming down with matcha lung.

“It’s like the Wild West because there are so many unknowns and so many new contenders in the game,” said Sebastian Beckwith, an importer whose company, In Pursuit of Tea, has offered matcha for more than 20 years.

Matcha, in its most traditional and prized form, is tea that is shielded from the sun for several weeks before it is picked, steamed and ground to a powder between granite millstones. The process is painstaking. The number of people in Japan for whom it is an everyday drink has never been large. About 80% of the tea grown in the country is sencha, a whole-leaf green variety. Matcha’s share is about 6%. It is very much a niche product.

In the past five years, it has become more popular abroad than it is at home, rocketing to stardom on TikTok and displacing coffee on cafe menus. Japan now exports more than half the matcha it grows. According to the market research firm NIQ, retail sales of matcha in the United States grew by 86% over the past three years.

Wholesalers are fielding requests from coffee shops in Warsaw, Poland, and in Kazakhstan. Retailers sell out of new shipments in minutes. With demand streaking ahead of the limited supply, all kinds of shady practices have crept into the gulf.

Matcha labelling is almost completely unregulated, making it easier for less scrupulous operators to pass off second- and third-tier products as premium stuff. Previously unknown classifications, like imperial grade and barista grade, are popping up. Even “ceremonial grade,” which is widely used outside Japan, is an invention of American marketers with no formal definition.

The word matcha itself is open to interpretation these days. Although matcha is historically associated with Japan, powdered tea sold under that name is now made in Australia, Kenya and other countries. Starbucks buys its matcha from China and South Korea as well as Japan.

There is brown matcha, black matcha and white matcha, in addition to old-fashioned matcha in the vibrant green colour of a tree frog. Some of these products were on display at the North American Tea Conference in Charleston, South Carolina, last month.

“There were a lot of different coloured matchas, and this is an issue for a lot of companies that make matcha,” said Rona Tison, tea ambassador for a Japanese firm, Ito En, who attended the event. “There are no regulatory guidelines.”

You’d never know there was a shortage on the streets of Los Angeles, Washington and London. Starbucks, which reported a 40% year-over-year increase in matcha sales for the first quarter of 2025, introduced a new line of protein drinks in September that includes three flavours of matcha. This summer, Blank Street Coffee rolled out a visual rebrand so drenched in foamy green that Fast Company called it “full-on matchacore.” In the process, Blank Street, an international chain, dropped Coffee from its name, and for good reason. Matcha drinks now outnumber coffee drinks on the menu and make up about half the company’s business, according to The Wall Street Journal.

In downtown Manhattan and parts of Brooklyn, it’s hard to round a corner without tripping over an A-frame sidewalk board advertising tiramisu matcha lattes, vanilla matcha fogs or spinach-fortified Mega Matcha smoothies.

This month in Brooklyn, Kettl, a Japanese tea dealer, plans to open a store devoted to matcha appreciation, with canisters for sale in front and guided tastings behind sliding doors in the back. The shop, Kettl Matcha Sen Mon Ten, is meant to offer a bit of counterprogramming, showing a side of matcha that isn’t deeply explored on TikTok.

“It’s an artisan product like wine, and I wanted to have a space focused on that,” said Zach Mangan, Kettl’s founder.

To understand why farmers cannot simply keep all the overnight converts happy by tripling production, it’s useful to remember that the most coveted matcha is milled from the first harvest of spring, when the leaves are sweetest.

“There’s really a supply shortage of first flush,” said Hannah Habes, founder of Matchaful, a New York-based retailer and wholesaler. According to Habes, first-flush matcha grown by a single farmer is the foundation of most of the lattes and other drinks sold at the seven Matchaful cafés. Buying directly from the producer or from well-established retailers is the best way to get what you’re paying for, tea experts say.

There is never as much of this first-flush tea as there is matcha from the second and third harvests, which tends to be more bitter and astringent. It’s typically labelled “culinary grade.”

Culinary-grade matcha is suited for chocolates, brownies and sweet, milky drinks. Tea connoisseurs feel strongly that the finer grades are wasted in lattes and smoothies.

“Using that in a latte is like using red Burgundy to make sangria,” Mangan said.

Adulterating high-grade products with fruit, honey and other sweeteners is more than a waste of good matcha, Koyama said. It also contributes to shortages that have made it difficult to stage tea ceremonies, or chado, a cornerstone of traditional Japanese culture.

A more accurate translation of chado is “the way of tea,” and understanding the rituals of preparing and serving it is a lifelong pursuit, said Ann Abe, chief of administration at Urasenke Los Angeles, a nonprofit cultural group devoted to the tea ceremony.

“Being third generation Japanese American, to learn about the culture is fascinating, and I’m still learning,” Abe said. She studied chado under influential teacher Sosei Matsumoto, who stressed the importance of never wasting any of the powdered tea. Abe has mixed feelings about matcha’s modern ubiquity outside Japan.

“It’s nice to see an interest,” she said. “However, I don’t think most people understand or realize what’s behind a bowl of tea.”

For Tison, who grew up in Japan and whose great-grandmother was a tea ceremony instructor, the sudden global thirst for this esoteric drink is still hard to fathom.

“I would never have foreseen it,” she said. “Whoever would have thought?”