Tea market in Japan

Earlier Report Observations

Between 2018 and 2023, Japan's tea market experienced a steady contraction in physical volume, with total market size falling from 409.6 thousand tonnes to 337.0 thousand tonnes. This decline was underpinned by long-term structural factors, including a reduction in cultivation area and a gradual decrease in demand for traditional leaf green tea. During this period, the ready-to-drink green tea segment grew in popularity, and before the pandemic, the matcha market was buoyed by strong inbound tourism demand and the expansion of café menus featuring products like matcha lattes.

The market was significantly disrupted in 2020 by the COVID-19 pandemic, which led to the cancellation of new tea events and a sharp decline in foodservice demand, contributing to tea prices hitting a multi-decade low. A turnaround began in 2021 when widespread frost damage severely impacted the first-flush harvest, reducing output in major producing regions like Shizuoka Prefecture by around 20%. This supply shock caused auction prices to surge by over 20%, increasing farmer revenues. Simultaneously, tea exports achieved a record value of 20.4 billion yen, driven by growing overseas sales of matcha and powdered tea, particularly through new online channels in markets like the United States.

The export-led transformation continued strongly, with shipment value reaching 21.9 billion yen in 2022 and projected to grow further through 2025. This strategic shift towards international markets, focused on matcha and powdered tea, helped mitigate the effects of a shrinking domestic consumer base. Within Japan, major beverage firms like Asahi launched new unsweetened tea products using domestic leaves, catering to rising health and environmental awareness among consumers. While overall market volume kept declining, the industry's focus on export growth and value-added products marked a decisive adaptation to changing conditions.

Production tea in Japan

In kind, 2018-2021, K t

Globally, Japan ranked as the 10th largest tea producer from 2018 to 2021.

Top producers of tea, 2018-2021

World map of production of tea, 2018-2021

Following a two-year decline, Japan's tea production volume rebounded. In 2021, the country produced 332.2 thousand tonnes of tea, marking a 1.0% increase from the previous year. However, over the entire 2018-2021 period, production fell by 13.4%, averaging an annual decline of 4.7%. The lowest production level was recorded in 2020 at 328.8 thousand tonnes, which also saw the steepest drop of 8.0%.

Annual dynamics of production in Japan in kind, 2018-2021, K t

In value, 2018-2021, M $ US

Tea production in Japan grew for the second year in a row. In 2021, the output was valued at 10 013 million US dollars, up 5.3% from the previous year. Despite this recent growth, production decreased by 4.3% overall from 2018 to 2021, with a compound annual growth rate of -1.5%. The lowest value was in 2019 at 9 438 million US dollars, which experienced the largest decline of 9.8%.

Annual dynamics of production in Japan in value, 2018-2021, M $ US

Exports tea from Japan

Exports in kind, t

Japan's tea exports increased for the second consecutive year. In 2021, exports reached 6 297 tonnes, showing a strong 17.9% rise compared to 2020. Over the 2018-2021 period, exports grew by 20.6%, with a compound annual growth rate of 6.4%. The lowest export volume was in 2019 at 5 192 tonnes, which saw a slight decline of 0.6%.

Annual dynamics of product's exports from Japan in kind, 2018-2021, t

From 2018 to 2021, the United States, accounting for 33.1% of Japan's tea exports by volume, led the list of buyers, followed by Asia (not elsewhere specified) at 25.2% and Germany at 7.0%. Together, these three destinations made up 65.4% of Japan's total tea exports in kind.

Structure of product's exports in kind by countries, 2018-2021

World map of product's exports from Japan in kind, 2018-2021

Exports in value, M $ US

Japan's tea export value rose for the second year in a row. In 2021, exports totaled 189.8 million US dollars, a 22.9% increase year-over-year. Over the 2018-2021 period, export value increased by 33.3%, with a compound annual growth rate of 10.0%. The lowest value was recorded in 2019 at 137.1 million US dollars, which saw a decline of 3.7%.

Annual dynamics of product's exports from Japan in value, 2018-2021, M $ US

Between 2018 and 2021, the United States was the largest market for Japan's tea exports by value, representing 47.4% of the total. Asia (not elsewhere specified) accounted for 9.3%, and Germany for 8.6%. Combined, these three destinations comprised 65.3% of Japan's total tea export value.

Structure of product's exports in value by countries, 2018-2021

World map of product's exports from Japan in value, 2018-2021

Imports tea to Japan

Imports in kind, t

Japan imported 27 476 tonnes of tea in 2021, a 2.1% improvement from 2020. However, over the 2018-2021 period, imports decreased by 10.2%, averaging an annual decline of 3.5%. The lowest import volume was in 2020 at 27 476 tonnes, which saw the largest decline of 13.8%. In contrast, the highest volume was in 2019 at 31 861 tonnes, which experienced the largest increase of 2.1%.

Annual dynamics of product's imports to Japan in kind, 2018-2021, t

From 2018 to 2021, China, Sri Lanka, and India were the main sources of tea imports to Japan by volume. China accounted for 40.8% of imports, Sri Lanka for 23.3%, and India for 13.2%. Together, these three countries supplied 77.3% of Japan's total tea imports in kind.

Structure of product's imports in kind by countries, 2018-2021

World map of product's imports to Japan in kind, 2018-2021

Imports in value, M $ US

After a two-year decline, Japan's tea imports increased. In 2021, imports totaled 174.0 million US dollars, up 11.2% from 2020. Over the 2018-2021 period, imports decreased by 4.5%, with a compound annual growth rate of -1.5%. The lowest value was in 2020 at 156.4 million US dollars, which saw the largest decline of 13.0%.

Annual dynamics of product's imports to Japan in value, 2018-2021, M $ US

Between 2018 and 2021, China, Sri Lanka, and India were the largest suppliers of tea to Japan by value. China accounted for 34.8% of imports, Sri Lanka for 26.3%, and India for 15.0%. Together, these three countries formed 76.0% of Japan's total tea import value.

Structure of product's imports in value by countries, 2018-2021

World map of product's imports to Japan in value, 2018-2021