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The Global Matcha Shortage: Trends, Impacts, and Solutions for Singapore Businesses

General Report March 5, 2025
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TABLE OF CONTENTS

  1. Summary
  2. Understanding the Global Matcha Shortage
  3. Impact on Singapore Businesses
  4. Alternatives and Solutions
  5. The Future of the Matcha Market
  6. Conclusion

1. Summary

  • The unprecedented global shortage of matcha has created a significant ripple effect throughout the food and beverage industry, with particular ramifications for businesses in Singapore. This burgeoning crisis stems from a combination of escalating demand, largely driven by an intense social media presence and a growing awareness of the numerous health benefits associated with matcha. Previously a niche market, matcha has transformed into a globally sought-after ingredient, showcased through visually appealing preparations and promoted by wellness influencers. As registrations for Japanese tea exports soar, reaching an astounding ¥29.2 billion in 2023, the urgency for securing matcha has led to severe logistical challenges and substantial interruptions in supply chains, impacting pricing and accessibility.

  • Among the many factors contributing to the shortfall is the highly seasonal nature of matcha production. The exclusive harvest of tencha leaves, which occurs only once a year, cannot be readily expanded to accommodate the soaring demand for quality matcha. Coupled with the influence of consumer behavior—such as tourists purchasing matcha in bulk—specialty tea retailers in Japan are forced to impose purchase limits to manage the dwindling stock. Consequently, these market dynamics have sparked a series of responses from Singaporean businesses, as they strive to adapt their strategies under these challenging circumstances.

  • Additionally, the rising enthusiasm for matcha consumption has prompted various local businesses to explore alternative sourcing strategies, including the examination of non-traditional supply options from regions like China and Taiwan. As they navigate these market limitations, companies are increasingly prioritizing sustainability and innovation in production practices. Retailers and consumers alike are presented with new avenues—such as seeking substitutes that mimic matcha's distinct flavor and health properties—to mitigate the effects of this shortage while maintaining the growing culture surrounding matcha.

2. Understanding the Global Matcha Shortage

  • 2-1. Overview of the global matcha market

  • The global matcha market has experienced unprecedented growth in recent years, driven not only by its unique flavor and health benefits but also by its cultural significance rooted in Japanese traditions. Originally, matcha was primarily consumed in Japan, where it has been celebrated for centuries, particularly among devotees of the tea ceremony. However, as global consciousness about healthy eating has risen, matcha has gained popularity around the world, especially in Western countries. In 2023, Japanese tea exports, including matcha, reached an astonishing ¥29.2 billion, nearly doubling from 2019 levels, showcasing the surge in international demand.

  • This surge is not just driven by health trends but also by the beverage's visual appeal on social media platforms, such as Instagram and TikTok, where matcha lattes, desserts, and other matcha-infused products attract significant attention. Cafés and restaurants across regions have capitalized on this intriguing aesthetic, integrating matcha into various food and beverage offerings. Matcha consumers globally are increasingly searching for quality and authenticity, often seeking premium brands that uphold traditional Japanese growing and processing methods.

  • As matcha's status transitions from a niche product to a mainstream phenomenon, it has also led to logistical challenges. Despite matcha's increasing presence in food culture, its cultivation is plagued by limitations in supply and seasonal harvesting schedules, complicating the dynamics of availability and pricing.

  • 2-2. Factors contributing to the current shortage

  • The current global matcha shortage can primarily be attributed to several intertwined factors impacting supply chains and production capabilities. One major aspect is the annual harvesting limitation of tea leaves used to produce matcha. These leaves, known as tencha, are harvested only once a year for a brief period, generally occurring in April and May. The desire for high-quality matcha, specifically from the first flush, has intensified pressure on producers, leading to stock depletion well before the next harvest season. Given that matcha's production cycle cannot readily expand to meet surging demand, the supply has become critically strained.

  • Moreover, the rise of digital platforms has amplified not just consumer demand but also consumer behavior related to matcha purchasing. Tourists visiting Japan have been known to buy matcha in bulk, leading to a phenomenon where personal hoarding contributes to the scarcity experienced by consumers and retailers alike. Specialty tea shops in Japan have started imposing purchasing limits to manage the stock more effectively, reflecting the difficulties producers are encountering in keeping up with rising global interests.

  • Furthermore, the logistical difficulties of transporting matcha from Japan to international markets exacerbated the shortage. With increased demand, businesses reported longer wait times, even as some suppliers sought to blend lower-grade matcha for certain products. Rising shipping costs post-pandemic have added financial strain on businesses trying to source this superfood, which has resulted in higher prices for consumers and limited accessibility to the premium products.

  • 2-3. Rising popularity of matcha among consumers

  • The explosion in matcha's popularity is closely tied to shifts in consumer trends, particularly influenced by social media dynamics and the growing trend towards health-conscious eating. Matcha, once a regional specialty, has transformed into a global celebrity among food and beverage segments. Influencers and celebrities, embracing a clean and health-driven lifestyle, have turned matcha into a symbol of modern living, not just a beverage choice. This is further augmented by aesthetic trends—where food's visual appeal matters just as much as its taste—leading to a social media phenomenon where cafés prize their matcha offerings for their 'Instagrammability.'

  • Additionally, the COVID-19 pandemic sparked a rise in home-based food and beverage experimentation, with many turning to matcha lattes as a crafting activity during lockdowns. Platforms like TikTok fueled this trend, presenting matcha as an essential item for achieving the 'clean girl' or 'balletcore' aesthetic, where the drink has become a staple not just for its flavor but also for its connotations of elegance and mindfulness.

  • Young consumers are also increasingly aware of matcha's health benefits, including its content of antioxidants, vitamins, and energy-enhancing properties, which compete favorably against traditional caffeinated beverages. This multi-dimensional appeal—combining taste, health benefits, and visual allure—represents a convergence of cultural and health trends that continue to drive the increasing consumption of matcha across diverse markets.

3. Impact on Singapore Businesses

  • 3-1. Local business responses to the matcha shortage

  • The matcha shortage has compelled numerous businesses in Singapore to adapt their strategies in response to the increased demand and reduced supply. As reported, various cafes and tea retailers have begun to experience significant difficulties in securing sufficient matcha supplies, with many resorting to imposing purchase limits on their customers. For instance, renowned Japanese supermarket Iroha Mart announced a ten percent increase in the price of its premium matcha powder due to sustained shortages over several months. Consequently, a 30g can of Rikyuen matcha powder saw its price rise from $36 to about $40. Such price adjustments reflect the broader trends within the market, where business responses are driven by the need to manage dwindling stock while still catering to an avid customer base. Moreover, companies like Tealife Singapore highlighted a concerning drop in their matcha supply by sixty percent, pushing them to consider sales restrictions. Many businesses have adopted a strategy of ordering smaller quantities more frequently, which not only increases shipping costs but also affects their overall profitability. The urgency to secure matcha has influenced various establishments to explore alternative sources, but the challenge remains daunting given the stringent production limits linked to the annual harvest cycle.

  • 3-2. Customer reactions to price increases

  • As businesses adjust their pricing strategies due to the matcha shortage, customers have had mixed reactions. Enthusiasts like Jillyn Lee, a regular matcha consumer in Singapore, indicate frustration regarding the necessity to pay higher prices amidst the scarcity. Prices have increased by as much as fifteen percent, leading to some products exceeding the $10 mark—a significant rise for casual consumers who previously enjoyed more affordable matcha drinks. Although consumers understand that these inflationary pressures stem from genuine supply constraints, the shift has nonetheless led to dissatisfaction, with reports of individuals turning to online marketplaces where resellers are exploiting the situation by charging exorbitant prices—sometimes three times more than retail price. Additionally, customers have communicated their concern over the prolonged availability of matcha products. Frequent buyer Ang Wei Man noted that online stores have been sold out of popular matcha brands, which exacerbates the frustration. While there is an understanding that price increases are necessary for maintaining supply, customers are left in a precarious position of having to choose between paying more or potentially missing out on their favorite products altogether, leading to a delicate balance between supply, demand, and customer satisfaction.

  • 3-3. Case studies of affected businesses

  • Several local businesses have emerged as case studies in the evolving landscape shaped by the matcha shortage. Nana's Green Tea, a popular brand known for its matcha offerings, experienced delays in receiving supplies for approximately one year but managed to mitigate stock shortages successfully. Their Director, Takahiro Yumisaki, indicated that while disruptions occurred, they did not severely affect the overall operations, largely attributed to their established supply chains driven by long-standing relationships with suppliers in Japan. On the other hand, newer businesses like Matsu Matcha, which launched just two months prior to the shortage, faced significant challenges due to their inexperience with sourcing under pressure conditions. Founder Bryan Ong described how tracking down alternative suppliers became crucial as original sourcing avenues became compromised. The brand's commitment to providing premium matcha has seen them negotiating new contracts with tea farms, and it is noteworthy that they have implemented a subscription model to stabilize their customer base, indicating a proactive approach to building consumer trust during times of scarcity. Furthermore, other newer brands such as Mori Matcha and Matcha Masta have appeared, driven by market demand for quality yet affordable matcha products. These businesses often tackle the shortage by establishing relationships with multiple suppliers to ensure steady product availability. Mori Matcha, for example, emphasized that their lower volume orders allowed for easier procurement amid rising global demand, illustrating an ability to adapt that could ultimately enhance customer loyalty and business resilience in the face of ongoing challenges.

4. Alternatives and Solutions

  • 4-1. Exploration of alternative sources for matcha

  • The ongoing global matcha shortage has prompted consumers and businesses alike to search for alternative sources beyond traditional Japanese suppliers. Companies are beginning to explore matcha imports from regions outside Japan, such as China and Taiwan, where cultivation practices may not carry the same historical significance but can offer comparable quality. This shift not only alleviates dependency on the Japanese supply chain but also allows for diversification in flavor profiles and cost options. For instance, some newer brands are importing matcha from Taiwanese farms that have started to gain recognition for producing high-quality green tea. Furthermore, sourcing matcha through established international distributors or online platforms can provide access to lesser-known farms that prioritize organic practices and sustainable harvesting methods.

  • In addition to regional alternatives, innovative approaches are being taken by some Singaporean companies. New retailers are leveraging direct relationships with Japanese farmers, finding a way to sustain supply despite the challenges posed by increased global demand. For example, Matsu Matcha has sought to establish direct communication with multiple tea farms, allowing them to secure limited quantities even as major suppliers restrict international sales. This strategy highlights an increasing recognition of the importance of building sustainable sourcing practices to manage future shortages.

  • Moreover, some businesses are considering the adoption of technology in agriculture that can enhance matcha yields. Precision agriculture techniques and advanced hydroponic systems may facilitate greater production capacity for matcha, optimizing growing conditions and allowing for a more consistent supply regardless of traditional harvesting constraints.

  • 4-2. Potential substitutes for consumers seeking similar products

  • In light of the shortage of authentic matcha, consumers are exploring various alternatives that can provide similar flavor profiles and health benefits. One popular substitute is spirulina, a blue-green algae known for its high nutrient content and vibrant green hue. Often marketed as a superfood, spirulina can be used in smoothies, lattes, and even baking, offering a health-conscious alternative. Its nutty taste and striking color have made it an appealing option for those looking to recreate aesthetically pleasing drinks and dishes without the use of matcha.

  • Another alternative that has gained traction is barley grass powder. This option is rich in vitamins and minerals, and its grassy flavor can mimic the earthy tones found in matcha. Barley grass is also touted for its antioxidant properties, making it a healthful choice for consumers who seek nutrition similar to that of matcha. Commercial blends often combine barley grass with other ingredients to create a drink that captures the essence of matcha without relying on the scarce green tea powder.

  • Additionally, powdered green tea blends from different varieties, such as sencha or hojicha, are being embraced as substitutes. These teas, while not identical to matcha, can still satisfy the craving for a green tea experience and are available in varying grades and forms. Exploring these substitutes allows consumers to maintain their green tea rituals while circumventing the supply constraints imposed by the current matcha shortage.

  • 4-3. Emergence of new matcha retailers in Singapore

  • The matcha shortage has catalyzed the emergence of new retail brands throughout Singapore, reflecting an adaptive response to the evolving market needs. Startups such as Matcha Masta, spearheaded by nutritionists, aim to integrate matcha with alternative health trends by combining matcha with plant-based proteins, thereby catering to a growing demographic concerned with wellness and nutritional benefits. Such innovations indicate an evolution in product offerings beyond traditional matcha, helping to fill gaps left by supply shortages.

  • Moreover, Matsu Matcha and Mori Matcha are other new contenders entering the scene, each striving to blend quality with affordability. Matsu Matcha focuses on importing premium matcha directly from Japan, offering subscription plans to ensure consistent supply for their loyal customers. This model not only enhances customer retention but also establishes a reliable business model amidst market unpredictability. Similarly, Mori Matcha aims to make quality matcha accessible without price inflation, emphasizing their commitment to ethical sourcing and maintaining relationships with exclusive tea farms.

  • As consumers become savvier about their choices, established outlets have also revamped their menus to feature unique matcha creations, appealing to local palates while promoting the versatility of matcha. Retailers like Koi The and specialty cafes are brainstorming new matcha-based drinks that resonate with adventurous foodies, ultimately enriching the local matcha culture, despite the backdrop of a global supply crisis.

5. The Future of the Matcha Market

  • 5-1. Predictions for supply and demand in the coming years

  • The global matcha market is at a pivotal crossroads as we look toward the next few years. Demand for matcha continues to escalate, fueled by its increasing incorporation into health-conscious diets and lifestyle trends portrayed on social media. Influencers and celebrities alike have catapulted matcha into a dietary staple, further expanding its consumer base beyond traditional tea drinkers. According to recent forecasts, the demand for matcha is anticipated to grow by over 20% annually through 2026, underscoring a robust trajectory. However, this surge in demand poses significant challenges for supply as current production capacities struggle to keep pace. Tea leaves harvested for matcha, primarily sourced from Japan, are limited due to their annual growth cycle, leading to elevated prices and potential scarcity as stock levels are anticipated to dip ahead of the next harvest season in mid-2025.

  • Moreover, logistical frameworks in producing regions, particularly Japan, face scrutiny. The interaction between surging demand and logistical bottlenecks could further deepen supply chain issues, leading to an increase in out-of-stock scenarios observed in the market today. The inability to fulfill consumer orders could foster a ripple effect, wherein businesses may have to either pivot towards alternative suppliers or explore other product offerings. Thus, while the matcha market's future looks promising from a demand standpoint, it remains contingent upon resolving supply chain conundrums and enhancing production capabilities.

  • 5-2. Sustainable practices and innovations in matcha production

  • Sustainability practices are becoming increasingly crucial in matcha production as the industry grapples with environmental impacts and seismic shifts in consumer expectations. Producers are recognizing the need for sustainability not only as a response to climatic unpredictabilities but also as a strategy to enhance quality perception among eco-conscious consumers. Innovations in agricultural techniques, such as organic farming methods and biodiversity restoration, are being considered by matcha growers. For instance, some farms have shifted towards regenerative agriculture, which prioritizes soil health and reduces reliance on chemical fertilizers, a move that could enhance matcha's nutrient density and ultimately appeal to health-focused consumers.

  • Furthermore, advancements in technology are paving the way for improved production efficiency and traceability. Smart agricultural approaches, including the use of IoT (Internet of Things) devices for real-time monitoring of crop conditions, are being integrated into matcha cultivation. This transition could potentially lower production costs, reduce waste, and ensure a sustainable and consistent product supply. As consumer awareness around environmental sustainability continues to rise, businesses that commit to such innovations in their supply chains and production methods may gain competitive edges, thereby helping to stabilize the matcha market's future.

  • 5-3. Long-term strategies for businesses and consumers

  • In light of the ongoing matcha shortage, both businesses and consumers must adopt long-term strategies to navigate this evolving landscape. For businesses, diversifying supply sources is vital. Establishing relationships with alternative matcha growers, possibly in regions outside traditional Japanese producers, may mitigate risks associated with future shortages. Additionally, developing strategic partnerships with local suppliers can aid in creating a more resilient supply chain. Education about matcha and its alternatives can also foster a loyal customer base who value companies that prioritize transparency amid fluctuating availability.

  • Consumers, on the other hand, may need to adapt their purchasing patterns, prioritizing sustainable brands that are actively mitigating the impacts of shortages through ethical sourcing and innovative products. Exploring substitutes that mimic matcha’s flavor profiles and health benefits could become a practical approach for enthusiasts during prolonged supply disruptions. As we look to the future, both businesses and consumers must remain agile, ready to embrace change in the face of market fluctuations and evolving consumer preferences, ensuring that the appeal of matcha remains vibrant and accessible in the years to come.

Conclusion

  • The ongoing global matcha shortage presents considerable challenges, yet it equally creates avenues for innovation and creative adaptation within Singapore's business landscape. As revealed through the various analyses and case studies, companies that proactively seek alternative sources and forge strong connections with suppliers will be better positioned to thrive amidst these supply constraints. Emphasizing sustainability in matcha production and cultivating diversification in sourcing will play a critical role in stabilizing the market, ensuring that the needs of both consumers and businesses are met efficiently.

  • Furthermore, as consumer habits continue to evolve, fostering a deep understanding of the product amid fluctuating availability will be crucial for maintaining brand loyalty. Both businesses and consumers must emerge from this period with a genuine commitment to adapting practices that prioritize ethical sourcing and innovative practices. By embracing change and accommodating the shifting landscape, the future of matcha can not only remain vibrant but also accessible to enthusiasts around the globe. In anticipation of what lies ahead, the matcha market stands at the brink of transformation, offering promises of resilience and sustainability in the face of growing global interest.

Glossary

  • Matcha [Concept]: A finely ground powder made from specially grown green tea leaves, matcha is celebrated for its vibrant color, unique flavor, and health benefits, commonly consumed in Japanese tea ceremonies.
  • Tencha [Product]: The leaves used to produce matcha, which are shade-grown and harvested once a year, specifically processed to create the characteristic fine powder.
  • Social Media Trends [Concept]: The patterns and behaviors observed in online platforms that influence consumer preferences and purchasing decisions, notably highlighting visually appealing products like matcha.
  • Logistical Challenges [Process]: The difficulties faced in the transportation and distribution of matcha, exacerbated by increased global demand and limited supply from producers.
  • Sustainability [Concept]: The practice of sourcing and producing matcha in an environmentally conscious manner, aimed at minimizing the ecological impact while ensuring long-term availability.
  • Spirulina [Product]: A blue-green algae marketed as a superfood, often used as a substitute for matcha due to its nutrient density and health benefits.
  • Barley Grass Powder [Product]: A health supplement made from young barley plants, it is rich in vitamins and can serve as an alternative to matcha with a similar earthy flavor.
  • Regenerative Agriculture [Process]: An agricultural practice focused on restoring soil health and improving biodiversity, aimed at producing high-quality matcha while being environmentally friendly.
  • Hydroponic Systems [Technology]: Soil-free growing methods that use nutrient-rich water solutions, potentially enhancing matcha production capabilities.
  • Instagrammability [Concept]: The quality of a food or beverage that makes it visually appealing for sharing on social media platforms like Instagram, influencing consumer choices.

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