High in the misty riverside hills of Ashikubo, where tea bushes ripple across centuries-old terraces, a quiet revolution is brewing.
Overseas importers, brand curators and specialty traders are making the journey to this mountain enclave in Shizuoka Prefecture, long celebrated as one of Japan’s premier tea regions.
They are eager to source premium matcha at its point of origin.
Ashikubo, in Shizuoka’s Aoi Ward, is often described as the birthplace of Shizuoka tea. Local lore traces its beginnings to a 13th-century Zen monk who brought tea seeds from China and planted them in the area.
Last summer, a cafe-owning American couple toured plantations nestled in a fold of green peaks.
Their guide was Tetsuya Matsunaga, 52, head of Ashikubo Teaworks, an agricultural cooperative whose roughly 50 member farmers cultivate tea in the district.
“They’re here for matcha,” Matsunaga said. “Overseas customers are willing to pay relatively high prices.”
Foreign buyers began visiting the community to purchase tea leaves about three years ago, Matsunaga said. In 2025, their number jumped, with visitors arriving from the United States, Colombia, Vietnam, Malaysia, the Netherlands and Germany.
While “sencha,” Japan’s standard everyday green tea, and “bancha,” a more casual, typically later-harvest category, are brewed with hot water and drunk as an infusion, matcha is produced by grinding shade-grown tea leaves into a fine powder and whisking it directly into water.
The powder is also used in products such as matcha lattes.
Fueled by rising health consciousness and growing interest in Japanese cuisine, matcha’s overseas popularity surged in the mid-2010s, setting the stage for today’s unprecedented boom.
Market research firm Global Information Inc. projects the matcha market will expand at an annual rate of 7.9 percent from 2024, reaching $7.43 billion (about 1.1 trillion yen) by 2030.
Japan’s tea industry as a whole is riding the same wave.
Finance Ministry trade statistics show that green tea exports, including matcha, totaled 10,084 tons from January through October 2025, up 44.1 percent from a year earlier. It was the first time annual exports topped 10,000 tons since 1954.
Export value reached 53.9 billion yen, already eclipsing the previous record of 36.4 billion yen set in 2024.
Because matcha commands higher prices than sencha or bancha, production is increasingly shifting toward the powder-tea segment. In 2025, the Ministry of Agriculture, Forestry and Fisheries announced a policy to promote this “matcha shift.”
Domestic consumers, however, are beginning to feel the strain. Tea prices have started to spike, an upswing industry insiders describe as “unprecedented.”
BANCHA PRICES SURPASS PREMIUM ‘GYOKURO’
“Prices have reached a level that neither consumers nor producers wanted,” said a representative of the JA Kagoshima Prefectural Economic Federation of Agricultural Cooperatives.
In October and November 2025, “shuto-bancha”—bancha made from leaves harvested in the autumn-to-winter period—traded in Kagoshima at an average of 2,431 yen per kilogram, nearly six times the level a year earlier. On some days, prices reached the 3,000-yen range.
That is higher than the 2024 price of “gyokuro,” one of Japan’s most prized shade-grown green teas.
In Shizuoka, too, the price of shuto-bancha has jumped four to five times, according to the JA Shizuoka Prefectural Economic Federation of Agricultural Cooperatives.
Japanese tea is harvested in seasonal “flushes.” The spring crop, known as “ichibancha,” or “shincha” (“new tea”), typically commands the highest prices, followed by the second and third flushes in early to mid-summer. Prices usually fall as the season progresses.
Shuto-bancha, the last harvest of the year, has traditionally been used as a raw ingredient for bottled green tea beverages.
In 2025, that hierarchy was upended. In what some in the industry are calling a “reversal,” later harvests became progressively more expensive, driven largely by the domestic matcha shift.
In October, Ashikubo Teaworks, a tea farmers’ cooperative in Shizuoka’s Aoi Ward, converted one of its two sencha production lines to produce “tencha,” shade-grown leaves that are steamed and dried without rolling and then refined for milling into matcha. Ground on a stone mill, tencha becomes matcha.
Making tencha requires extensive shading materials and specialized processing. Matsunaga, who heads the cooperative, decided to invest 200 million yen in equipment and machinery. The payoff was striking.
In 2024, the cooperative sold sencha for about 300 yen per kilogram. In 2025, after pivoting to tencha, it sold the product for roughly 3,800 yen per kilogram, more than 10 times the price of sencha.
“Until now, it was normal for tea farmers to earn what amounts to about 100 yen an hour and rely on side jobs,” Matsunaga said. “Now everyone is delighted.”
MATCHA SHIFT BECOMES PRIORITY
This is not just an Ashikubo story. Shizuoka Prefecture says the number of tencha-processing facilities in the prefecture rose from 23 in 2023 to more than 30 in 2025. In Kagoshima, the count increased from 13 to 21.
The agriculture ministry estimates that tencha’s share of domestic “aracha” (“crude tea”) output climbed from 7.3 percent in 2024 to roughly 10 percent in 2025.
Aracha refers to semi-finished tea produced at origin after the leaves are steamed, rolled, and dried, but before the final refining stage.
Government support is accelerating the shift. Subsidies cover roughly half of the required costs, and some municipalities provide additional assistance. In the basic policy guidelines for promoting the tea industry and tea culture, revised in April 2025, the farm ministry explicitly pledged to “promote conversion to tencha production.”
A ministry official involved in the program described the matcha shift as the policy’s “priority No. 1.”
Yet the broader backdrop is contraction. Overall green tea production is declining as the workforce shrinks.
The ministry says Shizuoka’s tea-growing area shrank by nearly 10 percent over the past year. Many plantations sit on steep slopes, limiting mechanization and large-scale farming, while labor shortages, exacerbated by an aging population, remain difficult to offset.
National output slipped from 84,000 tons in 2014 to 74,000 tons in 2024.
Within that shrinking total, however, tencha has expanded sharply—from 1,969 tons in 2014 to 5,336 tons in 2024, a 2.7-fold increase—and likely rose further in 2025. As total production tightens, the pivot to tencha effectively makes sencha and other varieties scarcer.
Shizuoka also suffered a poor harvest in 2025, when low temperatures from early April to early May slowed bud growth. The ministry estimates first-flush production in the prefecture fell 19 percent from the previous year.
All of this combined to deepen a sense of shortage across the industry in 2025. Wholesalers who had waited for prices to settle ultimately rushed to secure the remaining autumn-winter bancha in a single burst of buying, a scramble that likely helped ignite the price surge.
ROUND OF PRICE HIKES
The impact of rising tea leaf prices is already rippling through the consumer market. In December 2025, major beverage makers announced a new round of price increases for their ready-to-drink tea products, to take effect in spring.
Ito En Ltd. said it will raise the suggested retail price of a 600-milliliter bottle of Oi Ocha, the leading unsweetened green tea drink, from 200 yen to 220 yen (before tax) starting in March.
Coca-Cola Bottlers Japan Inc. will also increase the price of its 650-milliliter Ayataka from 200 yen to 220 yen beginning with March shipments.
Both brands had already increased prices in October.
“There is a supply shortage of tea raw materials across the board,” an Ito En spokesperson said. “Stabilizing tea prices is an immediate challenge.”
The squeeze is also reshaping product lineups. Otsuka Seicha Co., a tea producer based in Kakegawa, Shizuoka Prefecture, known for high-quality green teas such as deep-steamed sencha brewed in a “kyusu” (traditional teapot), has stopped making items that rely on second-flush and later harvests.
The company also plans to suspend sales of some shincha products starting in April.
The reason, it says, is simple: Market prices have risen so sharply that it can no longer produce teas at a quality-and-price balance it considers acceptable.
“We’re feeling our way in the dark,” said Kohei Sugihara, a senior executive at Otsuka Seicha.
AloJapan.com