Matcha – the powdered green tea is almost a staple on menus recently, from drinks to dessert – this Japanese ingredient is facing a global shortage propelled by the unprecedented demand around the world including the Middle East.
Uji, Japan’s ancient matcha heartland, is finding it hard to keep pace with a global phenomenon that has transformed the fine powder from a traditional tea ceremony staple into an international commodity worth billions.
A global ‘matcha crisis’ is currently underway with a shortage expected this spring, several reports reveal, with ripple effects already reaching the Middle East’s rapidly expanding premium beverage market. What was once a niche ingredient reserved for Japanese tea ceremonies has taken over mainstream culinary culture, appearing in everything from lattes and smoothies to ice cream and pastries across the region.
“Matcha isn’t just a drink—it’s part of a lifestyle. It offers a unique opportunity for cafés to innovate with formats like sparkling matcha, matcha lattes with alternative milks, and even matcha desserts. But I will always recommend that for a business to remain sustainable it should always offer a wide range of beverages people would enjoy on a daily basis,” Mohamed Ali Almadfai, Founder of Emirati Coffee said in an exclusive interview with Arabian Business.
According to recent market data, the global matcha market size was at $4.3 billion in 2023 and is expected to soar to $7.43 billion by 2030, growing at a CAGR of 7.9 per cent.
The rising popularity of matcha can be linked to the rising focus on wellness as consumers continue to seek out healthy alternatives. On social media, consumers can be seeing talking about the benefits of substituting coffee with matcha and promoting the daily consumption of matcha as a health benefit.
“There’s been a noticeable increase in demand, especially over the past 2–3 years. Matcha appeals to health-conscious consumers and aligns well with the growing wellness trend in the UAE,” Almadfai said.
The matcha hashtag on TikTok currently holds over 2.2 million videos. Overall, social media has played a key role in propelling the demand for matcha globally. Content creators have popularised recipes, processes and matcha tools, garnering millions of views.
The matcha crisis has reached concerning levels across supply chains. Industry experts have raised concerns of rising wholesale prices and tariffs on Japanese imports which is set to impact the prices of matcha products.
The scale of shortage
The farms are strained, grinding facilities are overwhelmed and restrictions on matcha sales are tightening, creating a supply bottleneck that has caught global markets unprepared.
The shortage stems from a mismatch between production capacity and global demand. Japan’s matcha production infrastructure, built around centuries-old cultivation methods in specific geographic regions are struggling to meet the explosive international demand.
The soft, young tencha leaves used to make matcha require specialised growing conditions and processing techniques that cannot be replicated with speed or at a low cost.
“I would say that if you lack the knowledge sourcing premium matcha can be more competitive, particularly ceremonial grade. Consistency, origin transparency, and price fluctuations are ongoing challenges,” Almadfai explained.
The shortage arrives at a time where the Middle East beverage sector is experiencing unprecedented growth in premium tea and coffee consumption. In 2024, the MEA matcha market generated nearly $73.5 million in revenue, and projections estimate it will grow to $85.5 million by 2030, reflecting a CAGR of 2.7 per cent.
This growth trajectory puts the Middle East in direct competition with established Western markets for matcha supplies. The total segment grew over 11 per cent in the last 12 months to reach 11,163 outlets across the region’s branded coffee shop market, with many establishments adding matcha-based beverages to attract younger customers, according to World Coffee Portal’s Project Café Middle East 2025.
The region’s coffee market expansion provides context for the matcha shortage’s impact. The Middle East coffee market is expected to reach $11.5 billion in 2025, indicating the scale of beverage consumption that matcha producers are trying to penetrate.
“Matcha is here to stay. It’s no longer a niche trend—it’s become a staple, especially among cafés with a strong specialty beverage focus. That being said I believe that consumption will lessen unlike coffee or tea which are cultural staples internationally,” he said.
Supply chain vulnerabilities
The matcha crisis indicates vulnerabilities in global specialty food supply chains. Unlike commodities that can be sourced from multiple regions, authentic matcha production remains unique to specific Japanese areas, creating a single-point-of-failure risks for international markets.
A global matcha shortage is flooding US markets with low-quality, potentially hazardous bargain products, raising concerns about safety standards as distributors seek alternative suppliers, according to local media reports. This quality degradation threatens the premium positioning that has driven matcha’s commercial success, particularly in upscale Middle Eastern markets.
The shortage has prompted speculation about long-term structural changes in the matcha market. Matcha shortages could continue well into 2025 as the tea’s global popularity increases and production struggles to match growing demand, suggesting that current supply constraints may represent a new normal rather than a temporary disruption.
Economic impact assessment
Price volatility has become the most immediate consequence of supply constraints. Wholesale prices have experienced increases, with some suppliers reporting cost escalations exceeding 100 per cent. These increases are being passed through to retail channels, potentially pricing out segments of the consumer market that drove initial demand growth.
The economic impact extends beyond direct price effects. Ceremonial grade matcha, the highest quality used in traditional preparation, commands premium pricing that creates margin pressure throughout the value chain.
Middle Eastern retailers who have invested heavily in matcha-focused concepts, face the challenge of maintaining profitability while preserving consumer accessibility.
“Matcha ranks among our top three specialty drinks. While not as universally popular as coffee, it enjoys high repeat purchases from a dedicated segment,” Almadfai said.
Regional market dynamics add complexity to pricing strategies. Saudi Arabia is anticipated to consume 49.81 million kg of coffee by the end of 2024, indicating a strong demand for premium beverages, but matcha price increases may change consumption rates.
Technology and innovation response
The crisis has accelerated innovation in matcha production and processing technologies. Traditional stone-grinding methods, while preserving authenticity, cannot achieve the scale required for global markets. Some producers are experimenting with hybrid approaches that maintain quality while increasing throughput.
Alternative sourcing strategies are emerging as companies seek to diversify supply chains. While Japan maintains quality supremacy, producers in other regions are developing matcha-style products using local tea varieties. These alternatives may not satisfy purists but could provide market stability during supply constraints.
Supporting local producers and opting for sustainably sourced products can help mitigate some supply chain pressures, though this approach requires consumer education about quality differences and authenticity standards.
Regional competition dynamics
The Middle East’s position in the global matcha market reflects broader competition dynamics between emerging and established markets. European and North American consumers, who drove initial international demand, now compete with rapidly growing Asian markets outside Japan for limited supplies.
Saudi Arabia is projected to lead this growth, while Morocco is expected to be the fastest-growing market in the region’s coffee sector, indicating the competitive pressures facing matcha suppliers attempting to establish regional distribution networks.
The growth trajectory of regional beverage markets creates additional pressure on matcha supplies. The Middle East Ready to Drink Tea Market size is expected to reach $208.85 million in 2025 and grow at a CAGR of 9.02 per cent to reach $321.58 million by 2030, suggesting that matcha demand will continue expanding regardless of supply constraints.
Policy and trade implications
Trade policy has emerged as a significant factor in matcha market dynamics. Tariff structures affecting Japanese imports create additional cost pressures that compound supply shortages. The timing of policy changes relative to harvest cycles can amplify market volatility.
For Middle Eastern markets, trade relationships with Japan become strategically important as matcha shortages persist. Bilateral agreements and long-term supply contracts may provide stability that spot market purchasing cannot deliver.
The crisis highlights the intersection of agricultural policy, international trade, and consumer markets. Japanese government responses to production constraints could influence global market access.
The matcha shortage may cause permanent changes in market structure and consumer behaviour. Premium positioning that drove initial growth may become unsustainable if supply constraints persist, potentially opening opportunities for alternative products or production methods.
Long-term demand projections suggest that current supply constraints represent a structural rather than cyclical challenge. The matcha shortage may mean higher prices and limited availability in the short term, but resolution requires fundamental expansion of production capacity rather than demand moderation.
For Middle Eastern markets, the crisis presents both challenges and opportunities. Established players may consolidate market position through secured supply arrangements, while new entrants face higher barriers to market access. Consumer education about quality differences and authenticity may become increasingly important as market differentiation tools.
The global matcha shortage signals growing pains of a traditional product’s transformation into a global commodity. For the Middle East’s expanding premium beverage market, the crisis tests the resilience of supply chains and the adaptability of business models built around specialty products.
As the region’s coffee market approaches $11.5 billion in value and matcha consumption continues growing, the resolution of current supply constraints will determine whether matcha maintains its premium positioning or becomes another casualty of unsustainable demand growth. The next harvest season will provide crucial indicators of whether production capacity can begin matching global appetite for Japan’s green gold.
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