China dominates global matcha supply but can Japan protect its premium edge? | CNA Correspondent

The Matcha Boom's Global Impact [00:00:00]

• Global demand for matcha is estimated at 100,000 tons annually, a quantity comparable to 150 Olympic-sized swimming pools.
• China has emerged as the top global producer, contributing around 70% of the world's matcha output.
• This shift raises questions about the future ownership and definition of matcha, pitting China's production dominance against Japan's traditional heritage.

  "Today, it belongs to the world."

Japan's Struggle with Success [00:01:30]

• The matcha boom has rescued Japan's tea industry, which faced declining demand and stagnant prices for 30 years.
• Production had dropped significantly, with aging farmers and harsh working conditions due to climate change and rising logistics costs.
• Despite the boom, Japan faces limits in increasing matcha volume due to restricted land and human resources, while striving to protect the Uji brand.

  "Compared to other tea leaf growing regions, they have a strong customer base."

Preserving Uji Matcha Heritage [00:03:00]

• Horishime-yen, one of Japan's historic tea farms, is dedicated to protecting the Uji matcha brand and its legacy.
• The process involves modern machinery for steaming and drying leaves, followed by stone milling for premium quality matcha.
• Stone mills operate continuously during the tea picking season to meet rising global demand for premium matcha.

  "We're carrying the branding of the legendary seven tea gardens as the only surviving estate."

China's Rise as a Matcha Powerhouse [00:05:00]

• China's resurgence in matcha production is rooted in reclaiming its historical tradition, tracing back to the Song Dynasty.
• Guizhou province, once one of China's poorest, has transformed into a matcha capital, supported by favorable climate, local tea culture, and strong government backing.
• Companies like Gui Tea have invested heavily in market research and technology, with government subsidies aiding the revival of tea fields.

  "It means, and it's referring to the Song Dynasty where matcha had traced its roots."

Differentiated Market Strategies [00:07:30]

• Japan focuses on premium, high-quality matcha, emphasizing craftsmanship and heritage, while China targets the mass market with beverage-grade matcha.
• China's advantage lies in its vast tea plantations and labor force, enabling rapid scaling of production at a lower cost.
• While China's products are mainly mid- to lower-tier, they are suitable for matcha lattes, desserts, and cakes, where a stronger tea flavor is desired.

  "The vast majority of demand in the international market is for beverage-grade matcha."

Complementary Models and Future Outlook [00:10:00]

• Both Japan's premium model and China's mass-market approach can coexist due to the immense global demand.
• Japan cannot expand its production significantly and relies on China for volume, while focusing on high-quality matcha.
• China is investing in technology and R&D to improve quality and develop distinct flavors, aiming to become the largest producer and exporter of matcha within five years and potentially surpassing Japan in the long term.

  "No, I think both models work and, you know, competition is good in a way because many people in Uji and in Shizuoka have been telling me that they're welcoming the competition in the matcha industry because it actually creates more activity or creates more business for Japan as well."