Matcha Boom’s Dark Side: Bankruptcies Rise Not From Demand Surge But Structural Transformation Failure

The global matcha boom continues, with matcha lattes and sweets becoming “standard menu items” at domestic and international cafés. Export values reach record highs, and Japan’s proud tea industry appears to ride tailwinds—or so it seems.

Yet demand grows while companies collapse. Why?

This article thoroughly explains the “quiet collapse” progressing beneath the surface of the apparent “matcha boom” through data and case studies, contrasting sharply with superficial narratives.

Furthermore, we reveal that bankruptcy increases stem not from “excessive demand” but from structural problems the Japanese tea industry has carried for years and transformation delays, while providing hints for future corporate survival.

Essential reading for those involved in matcha business and anyone interested in Japan’s traditional industry trajectories.

Key Takeaways

• Paradox revealed: Matcha/powder green tea exports hit ¥27.2 billion (tripling in 5 years), yet 2025 tea industry bankruptcies track toward all-time highs—success and failure coexist
• Tencha monopoly divides industry: Companies controlling tencha (matcha raw material) production or stable farmer networks thrive; those dependent on market procurement face 3x price surges and cannot secure ingredients
• Shizuoka’s triple crisis: Japan’s historically dominant tea region loses荒茶 production leadership to Kagoshima while suffering highest bankruptcy rates from leaf price spikes, domestic tea consumption decline, and aging workforce simultaneously
• Structural inertia kills: Boom rewards only “prepared companies” with production capacity, sales innovation, and capital; majority cannot upgrade aging equipment, diversify channels, or adapt to rapid market shifts
• Transformation urgency: Survival demands not “matcha boom response” but fundamental restructuring—AI/IoT efficiency, organic certification for exports, direct-to-consumer branding, and regional cooperation for tencha capacity

＼For Companies Seeking Matcha Powder／

We source matcha from Japan’s premier production regions including Kyoto Uji, Kagoshima, Fukuoka, and Shizuoka, offering comprehensive grade ranges from organic JAS-certified ceremonial grade to processing-grade matcha.

Common Challenges:

• “We have projects but cannot secure stable matcha supply…”
• “We want to incorporate matcha into new café menu items!”

If you face these concerns, consult with Matcha Times. Feel free to contact us for initial inquiries.

What’s Really Happening Behind the Matcha Boom: Why “Quiet Collapse” Progresses

While global matcha boom supposedly expands markets, why do bankruptcies and closures increase at record pace across Japan’s tea processing industry? This chapter organizes the contradiction’s true identity through the “structural transformation delay” perspective.

Why Do Bankruptcies Increase When Matcha Demand Reaches Historic Peaks?

Matcha and powdered green tea export values broke through ¥27.2 billion in 2024, tripling in just five years. The first half of 2025 alone doubled 2020’s entire year.

Superficially, this appears as “tailwind,” but reality shows:

Polarization intensifies where boom makes strong companies stronger while rapidly cornering weaker ones.

Real Reasons for Tea Industry Bankruptcy Surge: The Fundamental “Structural Transformation Delay” Problem

Bankruptcy increases surface not as temporary demand shocks but as manifestation of long-postponed “structural transformation delays.”

Companies With Outdated Structures Cannot Adapt to Rapidly Growing Markets

Tea farmer aging, labor shortages, equipment obsolescence, fixed sales channels—
many companies, despite market expansion, could not renovate production capacity or sales capabilities.

Production Systems Cannot Withstand Demand Increases

• Tencha production requires shade cultivation, specialized processing, stone mill equipment
• Production capacity expansion demands time and investment
• Major company stockpiling makes even raw material procurement difficult for small-medium businesses

Consequently:

“Can sell but cannot produce” → “Cannot procure” → “Thin margins” → “Bankruptcy”

This typical structural vicious cycle emerges.

This represents an abnormal situation where nearly half the industry cannot survive despite favorable markets.

The matcha boom expanded industry possibilities. However, this applied only to “prepared companies”—for many, the boom rather became a “burden.”

“Securing Tencha Determines Company Fate”: The Essence of Expanding Polarization

Most symbolic in the matcha boom: the gap between companies that can and cannot secure tencha (raw matcha material).

Tencha Supply Capacity Begins Determining Tea Processor Survival

Tencha, matcha’s raw material, experienced price surges with recent demand increases. Uji reached exceptional prices exceeding ¥14,000 per kilogram.

Under these conditions, winning companies are only those who:

“Can produce tencha in-house“
or
“Maintain stable farmer networks“

High “Entry Barriers” for Tencha Production

• Requires shade structures and processing equipment
• Demands specialized knowledge and experience
• Agricultural land and personnel shortages make production increases difficult

Therefore, short-term entry proves nearly impossible. Consequently:

• Major companies stockpile tencha and increase profits
• Small-medium businesses cannot obtain even raw materials, operating at losses

This polarization becomes fixed.

Reality Small-Medium Enterprises Face

This represents not market theory but supply structure problems.

Crisis in “Tea Kingdom Shizuoka”: Traditional Industry Collapse and Regional Economic Ripple Effects

Tea processing industry structural problems intensify particularly centered on Shizuoka Prefecture.

Shizuoka Stands at Historic Turning Point

Long regarded as “Japan’s premier tea production region,” Shizuoka surrendered first-place crude tea production position to Kagoshima, with tea processor bankruptcies also increasing at nationally highest levels.

Three Simultaneous Afflictions

These compound factors rapidly drain Shizuoka’s small-medium tea processors’ vitality.

Actual Company Bankruptcies Continue

• Shimada City “Maruei Seicha” bankruptcy
• “Ocha no Aoshima” also business failure
• Multiple additional companies moved to closure 2023-2025

Furthermore, 2025 bankruptcy counts track toward all-time annual highs.

Traditional Industry Crisis Equals Regional Social Crisis

Tea processing supports agricultural land, culture, and employment as regional industry. The current industry crisis represents a “microcosm” not only of Shizuoka but Japan’s overall agricultural structure.

Will This Continue? Matcha Boom Sustainability and Risks

Despite market expansion, “booms” don’t last forever. If companies depend on short-term profits, they risk major shake-outs in the next wave.

Boom Dependence Won’t Ensure Company Survival

What tea processors currently need isn’t “matcha boom response” but sustainable business models immediately responding to market changes.

Boom Backlash Risks Increase

Agricultural commodity patterns of post-boom production increases followed by demand declines and price collapses have occurred repeatedly.

What’s Needed: Bold Transformation Toward “Structural Change”

The matcha boom presents opportunities but simultaneously “trials.” Current requirements: high value-addition, technology investment, channel diversification.

Tea Industry’s Path Forward: Structural Reform, Technological Innovation, and Brand Strategy Importance

Stopping bankruptcy increases requires more than individual company efforts. Industry-wide structural reform proves necessary.

① Technology Investment for Production Efficiency (AI/IoT)

• Demand forecasting AI
• Sensors automatically judging tea leaf quality
• Energy-efficient drying equipment

These become foundations for “winning through value, not price.”

② SDGs/Organic Response for Overseas Markets

Globally, “sustainable tea” expands rapidly, with organic matcha offering particularly high added value.

③ Brand Strategy and Direct Sales Strengthening

• Experiential tourism partnerships
• Cross-border EC utilizing SNS
• Story-driven product development

Simply changing “selling methods” dramatically transforms profit structures.

④ Regional Cooperation to Boost Tencha Production Capacity

While individual companies cannot invest alone, agricultural cooperatives, local governments, and cooperative associations can strengthen tencha supply capacity through collaboration.

For Those Seeking Powdered Matcha

While riding the matcha boom wave to consider product development and new menu items, many voices say “don’t know which powdered matcha to choose.” Selecting by price alone can lead to unexpected “pitfalls” in color retention, flavor, solubility, and safety.

This media disseminates points for choosing powdered matcha suited to applications, based on understanding daily-changing matcha market realities and ingredient conditions.

• Matcha latte and sweets applications for cafés and sweets
• Premium matcha for overseas exports and inbound markets
• Commercial-use matcha emphasizing cost-quality balance

Optimal grade and origin thinking varies according to purpose.

“Want to launch matcha products”

“Want to elevate existing menu quality”

“Want to consult about matcha ingredients for overseas”

If you have such concerns, please consult with us.

Summary: Matcha Boom Reality Was “Turning Point,” Not “Tailwind”

The matcha boom represented not an industry “golden age” but a turning point demanding structural transformation.

• Companies increasing profits from boom: only half overall
• Remaining half: increased bankruptcy risks and losses
• Cause: not demand but structural obsolescence, investment shortfalls, fixed channels

Matcha markets will continue expecting future growth, but only “prepared companies” survive.

The tea processing industry, while protecting traditional industry value, must now advance toward new stages of technological innovation, channel innovation, and high value-addition.