Matcha mania is sweeping the world, but demand for the Japanese green tea powder is drying up supplies. CBS New York's Ali Bauman reports.

New York

Global demand for matcha, a finely milled Japanese green tea powder, has surged, causing supply shortages and rising prices. The market is projected to reach $5 billion within a few years, with exports of green tea from Japan increasing by 25% recently. U.S. businesses imported nearly two and a half tons of matcha last year, and cafes are experiencing long waitlists for wholesale supply.

Japanese farmers are finding it difficult to keep up with the sudden demand, particularly for high-quality, first harvest matcha, which is now being used in everyday drinks rather than just special occasions. Prices for matcha lattes have climbed, and additional tariffs on Japanese imports are expected to further raise costs. Some cafes are milling leaves in-house to manage expenses, but overall, consumers are facing higher prices as matcha's popularity continues to grow.

Booming demand for matcha draining supply, driving up prices

Tonight, matcha mania is sweeping the world, but demand for the Japanese green tea powder is drying up supplies. The market for matcha is expected to reach $5 billion by 2028. That's up 10% from just two years ago. U.S. businesses imported nearly 2 1⁄2 tons of matcha last year. CBS's Ali Bauman is in New York and has more on why supply is suddenly limited. Milling green tea leaves into drinkable matcha powder demands patience. And how long does it take to go to mill all this? All day. Irasshaimase, welcome. Joanne Loy opened Awika Cafe in New Jersey just over a year ago. It is the largest matcha refinery in the U.S. and one of the few cafes outside of Japan which grinds the leaves fresh instead of importing the powder. Matcha, they serve the same seriousness that we treat like coffee. You wouldn't go to a coffee shop and buy a coffee latte that has coffee grind that was grind like three or six months ago in a different country. And business is booming, not only for matcha lattes, but for the powder itself. Loy says more than 40 different cafes are on her wait list for wholesale. Everyone is drinking matcha. Do you wanna go grab matcha? Its popularity has exploded on social media. Exports of green tea from Japan, including matcha, rose 25% last year. But Japanese farmers are struggling to keep up with the sudden demand for this 800-year-old drink, which traditionally is mixed with water and only enjoyed on special occasions. Right now what's happening is people are asking for these really high-quality first harvest matcha to be used in their daily matcha latte. As a result, a latte here will set you back about eight bucks and that's before a 15% tariff on Japanese imports takes effect. We do see price increases from both the tariff for the import cost and the price increase for the matcha shortage, like the limited supply. Milling the leaves in-house, Loy says, helps with cost. Because at some point people are gonna say, I'm not gonna pay 10 bucks for a drink. Maybe. I have had people pay $10 for a drink, but everything is going up in price in general. I think people are already expecting that everything is going up. Have a good one. Ali Bauman, CBS News, Lawrenceville, New Jersey.

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