WEBVTT - What's Behind the World's Matcha Shortage

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. So I'm here to

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<v Speaker 1>order an iced shake and macha.

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<v Speaker 2>I know you only serve ten of them, do you

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<v Speaker 2>have any laugh? We have one left, so you're very

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<v Speaker 2>lucky today. If you've been to an independent coffee shop

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<v Speaker 2>pretty much anywhere recently, there's a good chance you've heard

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<v Speaker 2>about the Macha shortagch. Macha tea powder has soared in

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<v Speaker 2>popularity in recent years. Its distinctive bright green hue has

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<v Speaker 2>started showing up in macho latees, macha pastries, even in

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<v Speaker 2>Macha soft serve. But now the supply of authentic, high

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<v Speaker 2>quality macha coming from Japanese farmers is struggling to meet

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<v Speaker 2>global demand.

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<v Speaker 3>We have just one Macha product right now, the ice

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<v Speaker 3>shake and Macha, and we limit it to ten drinks

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<v Speaker 3>a day. It is just to stretch out that supply.

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<v Speaker 2>Thomas chen is the tea director of two nine in Waher, Washington,

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<v Speaker 2>d C, a Japanese cafe and restaurant that opened a

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<v Speaker 2>few weeks ago. Our senior producer, Naomi Shaven visited last week. Okay, wow,

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<v Speaker 2>so you've almost completely sold out by two fifteen.

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<v Speaker 3>That is wild.

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<v Speaker 1>I would love to order it.

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<v Speaker 2>It's the kind of place you might expect to offer

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<v Speaker 2>Macha everything.

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<v Speaker 3>Macha was supposed to be kind of the centerpiece of

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<v Speaker 3>the Leka Japanese drinks program, and then we were going

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<v Speaker 3>to incorporate it into the pastry program as well, And

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<v Speaker 3>now it's become kind of a okay, like what we

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<v Speaker 3>need to scale this whole plan back. And it's not

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<v Speaker 3>just like the supplies, like even when they do have supply,

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<v Speaker 3>the prices have already gone up. Tariffs have definitely affected

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<v Speaker 3>that too.

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<v Speaker 2>I'm Sarah Holder. Today on the show, my colleague Wanha,

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<v Speaker 2>who hosts Big Take Asia, traces the Macha supply chain

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<v Speaker 2>from cafe to wholesaler all the way back to the

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<v Speaker 2>farmers on the ground in Japan. What's behind the shortfall

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<v Speaker 2>and what would it take to meet the Macha demand.

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<v Speaker 4>Jasmin Smith is a designer living in Japan. She and

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<v Speaker 4>her sister Freya make videos about their everyday life in

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<v Speaker 4>Tokyo in their spare time.

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<v Speaker 1>Welcome back to dan life living in Tokyo.

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<v Speaker 4>Today, and there's one thing they love about living in Japan.

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<v Speaker 4>Japanese green tea, also known.

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<v Speaker 1>As Macha Mancha just tastes amazing. We both used to

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<v Speaker 1>be coffee drinkers actually, but at some point Mancha just

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<v Speaker 1>took over as our go to caffeine source and it's

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<v Speaker 1>been part of our morning routines ever since.

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<v Speaker 4>They started posting videos on TikTok in twenty twenty two,

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<v Speaker 4>sharing their favorite Macha cafes, daily morning routines and telling

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<v Speaker 4>their thousands of TikTok followers where they can get the

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<v Speaker 4>best macha powder online and in Tokyo. But a couple

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<v Speaker 4>of months ago, they were surprised when they went to

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<v Speaker 4>get their usual Macha fix at this tiny store in

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<v Speaker 4>their neighborhood.

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<v Speaker 1>It's just run by an elderly woman, and she told

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<v Speaker 1>me that, yeah, she has nothing to sell to me unfortunately,

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<v Speaker 1>and recently she told us that a lot of foreigners,

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<v Speaker 1>a lot of young people are visiting her shop, so

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<v Speaker 1>every time she restocks, she instantly sells out, which never

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<v Speaker 1>used to happen.

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<v Speaker 4>Bloomberg reporter Mia Glass, who's based in Tokyo, also noticed

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<v Speaker 4>this happening at Macha stores around her.

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<v Speaker 5>Mancha has just completely blown up overseas. People come to

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<v Speaker 5>Japan and they know about macha from social media. They've

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<v Speaker 5>studied it, and they really want that high quality type

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<v Speaker 5>of macha when they come here, so there's a huge

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<v Speaker 5>shortage of macha in Japan.

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<v Speaker 4>Welcome to the Big Take Asia from Bloomberg News. I'm Wanha.

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<v Speaker 4>Every week we take you inside some of the world's

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<v Speaker 4>biggest and most powerful economies and the markets, tycoons and

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<v Speaker 4>businesses that drive this ever shifting region. Today on the

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<v Speaker 4>show the Macha Mania, what's driving this macha boom and

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<v Speaker 4>why can't macha makers in Japan keep up? Mia, It's

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<v Speaker 4>great to have you, thanks for joining us.

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<v Speaker 5>Thank you so much for having me so.

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<v Speaker 4>Because today's episode is all about macha. I've got a

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<v Speaker 4>cup of cold macha with almond milk here with me

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<v Speaker 4>in the studio in Hong Kong, Mia, What are you drinking?

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<v Speaker 5>So? I got an iced macha latte, which is my

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<v Speaker 5>go to order, and I got it from this macha

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<v Speaker 5>cafe that's actually near our office building. It's by this

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<v Speaker 5>amazing family run Japanese tea company that's been around for

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<v Speaker 5>like three hundred years.

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<v Speaker 4>Oh that's amazing. Now, shall we give these macha drinks

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<v Speaker 4>a taste?

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<v Speaker 2>Yes?

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<v Speaker 5>Cheers.

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<v Speaker 4>Hmm, this one is not quite bitter enough for me.

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<v Speaker 4>I think it's been it has too much almond milk unfortunately,

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<v Speaker 4>but I can still get the flavor of the macha,

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<v Speaker 4>you know.

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<v Speaker 5>I just love how unique The taste is kind of

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<v Speaker 5>like this mix of umami but also bitter, sometimes a

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<v Speaker 5>little sweet. So it's just a flavor you can't really

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<v Speaker 5>get from anything else.

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<v Speaker 4>Mia. Tell us exactly what is macha?

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<v Speaker 5>Yeah, so, macha is a Japanese word. It means powdered

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<v Speaker 5>tea and Japanese so it's a type of green tea

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<v Speaker 5>where the entire leaf is grounded into this powder.

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<v Speaker 4>This way of making green tea originated from China in

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<v Speaker 4>the twelfth century. A Japanese monk who was traveling there

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<v Speaker 4>was so impressed with the energy boost the drink gave

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<v Speaker 4>him that he brought it back with him to Japan.

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<v Speaker 4>It's said that Japanese monks used to drink macha to

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<v Speaker 4>stay awake during long meditation sessions, and today macha is

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<v Speaker 4>at the center of Japanese tea ceremonies that are performed

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<v Speaker 4>for cultural and religious purposes.

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<v Speaker 5>Depending on the tea ceremony, there will be different types

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<v Speaker 5>of macha, like a thinner macha or a thicker one.

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<v Speaker 5>There's specific steps that they have to go through. It's

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<v Speaker 5>carefully whisked into this frothy drink that you drink at

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<v Speaker 5>the end. And it's a practice that emphasizes a lot

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<v Speaker 5>of Japanese values like mindfulness, harmony, tranquility, respect, those kinds

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<v Speaker 5>of things.

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<v Speaker 4>And macha is this just for traditional ceremonies. You'll find

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<v Speaker 4>it everywhere you go in Japan.

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<v Speaker 5>In Tokyo, there's a macha cafe on like every block here.

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<v Speaker 5>Everything is macha now, bubble tea, cakes, cookies, even in

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<v Speaker 5>coffee shops here they usually have macha now, so you

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<v Speaker 5>can pick between the two.

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<v Speaker 4>Japan is one of the world's largest producers of macha.

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<v Speaker 4>The country made about four thousand tons of the powdered

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<v Speaker 4>tea in twenty twenty three. That's almost a threefold increase

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<v Speaker 4>from two thousand and eight and an all time high,

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<v Speaker 4>and in recent years it's becoming more popular overseas. Last year,

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<v Speaker 4>Japan's export of green tea, which includes macha, reached a

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<v Speaker 4>record high of about two hundred and forty five million

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<v Speaker 4>US dollars. That's a roughly quarter increase from the previous year.

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<v Speaker 4>But despite the record level of production, Japan has a

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<v Speaker 4>macha shortage. Shops sell out of macha as soon as

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<v Speaker 4>they hit the shelves, forcing people to go out of

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<v Speaker 4>their way to find the tea powder, and some of

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<v Speaker 4>the most prominent macha producers have also stopped selling certain

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<v Speaker 4>products and limits the number of cans of macha customers

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<v Speaker 4>can buy at a time. Mia says there's one clear

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<v Speaker 4>driver for the increasing demand.

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<v Speaker 5>People on TikTok and Instagram and other social media platforms

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<v Speaker 5>have really made an esthetic out of macha. It has

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<v Speaker 5>this bright green color that is really attractive for social media,

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<v Speaker 5>and so people will show off that bright green macho

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<v Speaker 5>lte or desserts, and people even have Macha stations complete

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<v Speaker 5>with traditional mugs and whisks and strainers and things like that,

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<v Speaker 5>and they will decorate it. So it's really this aesthetic

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<v Speaker 5>that people have jumped on. And then of course there's

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<v Speaker 5>a nutritional aspect as well.

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<v Speaker 4>The craze for macha comes at a time when there's

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<v Speaker 4>been a growing interest in health and wellness products. You'll

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<v Speaker 4>hear social media influencers talk about the health benefits macha offers.

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<v Speaker 4>It's rich in antioxidants and caffeine, which some studies suggest

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<v Speaker 4>can help boost energy and lower risk of disease yes,

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<v Speaker 4>and on top of these viral social media videos contributing

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<v Speaker 4>to the shortage, Mia says there's just a lot of

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<v Speaker 4>people traveling to Japan and buying macha in person.

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<v Speaker 5>There are so many tourists in Japan right now, mainly

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<v Speaker 5>thanks to the weekend, so basically everything is on sale

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<v Speaker 5>once you get to Japan, and there's also just generally

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<v Speaker 5>more interest in Japan. Last year, thirty seven million people

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<v Speaker 5>visit the country, which is a record, and it's up

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<v Speaker 5>forty seven percent from twenty twenty three. A lot of

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<v Speaker 5>videos on TikTok and Instagram show a lot of people

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<v Speaker 5>recording macha. I saw a few videos of people literally

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<v Speaker 5>having a suitcase full of macha, you know, from different

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<v Speaker 5>stores to try the different flavors and stuff like that.

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<v Speaker 5>Because they're only in Japan for you know, a week

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<v Speaker 5>or two. They're like, oh my god, I have to

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<v Speaker 5>buy up all this macha while I'm here. So people

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<v Speaker 5>definitely are buying a lot of macha, and that's definitely

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<v Speaker 5>contributing to the shortage.

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<v Speaker 4>While Japanese have been drinking less green tea over the years,

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<v Speaker 4>out side of Japan, the appetite from macha is expanding.

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<v Speaker 4>Cafes and tea stores as far as Sydney and Australia

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<v Speaker 4>have seen sales skyrocket, forcing owners to limit customer purchases

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<v Speaker 4>because they're unable to source more of the tea powder

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<v Speaker 4>from Japan after the break, Why can't Japanese tea producers

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<v Speaker 4>just make more macha? Growing fine quality macha has a

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<v Speaker 4>lot to do with the land and the climate. The

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<v Speaker 4>plant needs to be shaded, the soil needs to drain

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<v Speaker 4>well but also retain a decent amount of water. And

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<v Speaker 4>while macha is produced in a variety of regions in Japan,

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<v Speaker 4>there's one particular place renowned for this highly prized tea.

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<v Speaker 5>So the most famous region is Uji, which is on

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<v Speaker 5>the southeast border of Kyoto, and that's where macha farmers

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<v Speaker 5>have master techniques of growing and harvesting the best macha

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<v Speaker 5>and they've been doing this for centuries.

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<v Speaker 4>Mia. Can you walk us through the life cycle of macha?

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<v Speaker 4>How is macha made?

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<v Speaker 5>So it's a very long process. So basically in a farm,

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<v Speaker 5>you have just rows and rows of tea plants. In April,

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<v Speaker 5>the first shoots of the season are going to appear,

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<v Speaker 5>and then the tea plants are gradually shaded over time,

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<v Speaker 5>so that blocks the direct sunlight for the plants. That

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<v Speaker 5>gives it that chlorophyll, that bright green color, and it

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<v Speaker 5>also enhances the taste and also gives it antioxidants, which

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<v Speaker 5>gives you that nutritional component.

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<v Speaker 4>The highest grades of macha are usually grown in almost

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<v Speaker 4>darkness before they're harvested around late April or May. The

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<v Speaker 4>green tea leaves are handpicked and hours after they're harvested,

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<v Speaker 4>they have to be steamed for less than a minute.

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<v Speaker 4>That stops the oxidation process and keeps the leaves green.

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<v Speaker 4>Then the leaves are left to dry, they're decedemped and debate.

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<v Speaker 5>At this point they are called tensa. So this tensha

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<v Speaker 5>will be blended together basically to make different flavor profiles.

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<v Speaker 5>So that's also a part of the farmer's experience and knowledge.

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<v Speaker 5>They know how to blend the macha to make certain flavors,

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<v Speaker 5>and then after it's been stored in a refrigerator, it's

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<v Speaker 5>going to get grinded to turn into the maucha powder

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<v Speaker 5>that we know in stores.

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<v Speaker 4>So that does sound like a long and arduous process,

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<v Speaker 4>but certainly not impossible, right, Why can't supply just keep

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<v Speaker 4>up with the demand.

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<v Speaker 5>Yeah, so the whole process that I just described, it

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<v Speaker 5>only happens once a year for the most premium types

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<v Speaker 5>of macha, so farmers can't harvest more on demand. The

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<v Speaker 5>annual supply is usually determined well in advance, and it's

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<v Speaker 5>obviously a really slow precise process as well. So the

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<v Speaker 5>traditional stone mills only grind about forty grams of macha

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<v Speaker 5>per hour, and specialized macha processing machines are super limited

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<v Speaker 5>in number, so increasing production speed would definitely come reminds

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<v Speaker 5>the quality of the macha. And also a lot of

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<v Speaker 5>these types of produce are pretty much made by family

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<v Speaker 5>run businesses in Japan, and obviously Japan has a declining population.

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<v Speaker 5>It's ajang and there's not enough people to take over

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<v Speaker 5>those farms in the future, so there's really just a

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<v Speaker 5>decline and supply for that reason as well.

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<v Speaker 4>Another reason for the macha crunch is that Japanese tea

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<v Speaker 4>producers tend to prioritize long standing customers. Marukio Koyaman, one

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<v Speaker 4>of the leading brands of macha and Japan, says it

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<v Speaker 4>needs to be strict sales to make sure there's enough

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<v Speaker 4>supply for customers at temples, shrines, and other venues that

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<v Speaker 4>use macha for religious or ceremonial purposes. Mia, is there

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<v Speaker 4>any protective policy in place here? Why can't Japan just import,

0:12:49.920 --> 0:12:53.439
<v Speaker 4>for example, fresh tea from overseas and process it at home.

0:12:54.200 --> 0:12:57.800
<v Speaker 5>There's definitely some national or cultural pride ut play here.

0:12:58.080 --> 0:13:01.560
<v Speaker 5>It's not like Japan has any rule about importing from

0:13:01.600 --> 0:13:05.160
<v Speaker 5>other countries or regulations, but it's really more just about

0:13:05.200 --> 0:13:08.640
<v Speaker 5>what people want. I think a lot of people in

0:13:08.760 --> 0:13:12.640
<v Speaker 5>Japan really just love Japanese macha and they really trust

0:13:12.720 --> 0:13:16.200
<v Speaker 5>the quality that these Japanese farmers bring because they've just

0:13:16.280 --> 0:13:18.880
<v Speaker 5>been doing it for centuries. So I think a lot

0:13:18.920 --> 0:13:22.200
<v Speaker 5>of Japanese people, although they'd be fine with drinking macha

0:13:22.240 --> 0:13:26.200
<v Speaker 5>that's imported from other countries, they probably want to have

0:13:26.240 --> 0:13:27.480
<v Speaker 5>that Japanese macha.

0:13:28.000 --> 0:13:31.880
<v Speaker 4>Mia says. Farmers in other countries like the US, South Korea,

0:13:31.920 --> 0:13:35.040
<v Speaker 4>and China are trying to make more of their own macha,

0:13:35.480 --> 0:13:37.840
<v Speaker 4>but it's hard to replicate the kind of macha you

0:13:37.880 --> 0:13:40.520
<v Speaker 4>get in Japan, and that's because of a combination of

0:13:40.559 --> 0:13:43.720
<v Speaker 4>climate and soil so specific to the country, not to

0:13:43.800 --> 0:13:47.040
<v Speaker 4>mention the centuries Japan is spent on perfecting the growing

0:13:47.120 --> 0:13:51.600
<v Speaker 4>and processing techniques. Mia, is there anything that the Japanese

0:13:51.640 --> 0:13:54.559
<v Speaker 4>government can do to help the macha supply catch up.

0:13:55.240 --> 0:14:00.160
<v Speaker 5>The government is basically promoting more farmers to make tensha

0:14:00.280 --> 0:14:02.640
<v Speaker 5>rather than other types of teas right now, because that

0:14:02.679 --> 0:14:05.760
<v Speaker 5>can be turned into macha, and they're also supporting the

0:14:05.800 --> 0:14:09.439
<v Speaker 5>tea industry as a whole through various subsidies and programs

0:14:09.440 --> 0:14:13.439
<v Speaker 5>to encourage tea growing and also just promoting research in general.

0:14:13.679 --> 0:14:17.040
<v Speaker 5>Because the problems like the asing population and also climate

0:14:17.120 --> 0:14:20.400
<v Speaker 5>change heavily affects the production of macha. They're really trying

0:14:20.400 --> 0:14:23.400
<v Speaker 5>to research what's the best method to continue to make

0:14:23.440 --> 0:14:24.040
<v Speaker 5>more macha.

0:14:24.600 --> 0:14:27.320
<v Speaker 4>Those government measures will take some time to bear fruit,

0:14:27.640 --> 0:14:31.520
<v Speaker 4>if they ever do. Meanwhile, Mia says, for macha lovers

0:14:31.560 --> 0:14:34.880
<v Speaker 4>living in Japan now, the difficulty in getting this unique

0:14:34.920 --> 0:14:38.880
<v Speaker 4>green tea powder is just another inconvenient side effect of

0:14:39.000 --> 0:14:41.680
<v Speaker 4>Japan's tourism boom.

0:14:42.120 --> 0:14:44.840
<v Speaker 5>Yeah, it's definitely one of the ways that the tourism

0:14:45.000 --> 0:14:48.120
<v Speaker 5>issue is manifesting in Japan. I know there are a

0:14:48.160 --> 0:14:51.200
<v Speaker 5>lot of locals who are really angry that there are

0:14:51.360 --> 0:14:53.960
<v Speaker 5>so many tourists in the streets and in shops. I

0:14:53.960 --> 0:14:57.200
<v Speaker 5>also hear complaints about people don't want Airbnbs in their

0:14:57.200 --> 0:15:00.440
<v Speaker 5>neighborhood because of the garbage and the noise and things

0:15:00.480 --> 0:15:03.320
<v Speaker 5>like that. And then I know in Kyoto, for example,

0:15:03.480 --> 0:15:06.280
<v Speaker 5>the buses have been so crowded that a lot of

0:15:06.320 --> 0:15:08.960
<v Speaker 5>the locals who are going to work have to wait

0:15:09.000 --> 0:15:11.600
<v Speaker 5>for like three buses to pass because there are so

0:15:11.680 --> 0:15:15.920
<v Speaker 5>many tourists, especially with like suitcases. So I think there

0:15:15.960 --> 0:15:18.160
<v Speaker 5>are a lot of locals who are a bit upset

0:15:18.240 --> 0:15:20.160
<v Speaker 5>about the over tourism right now.

0:15:21.040 --> 0:15:24.680
<v Speaker 4>Despite some of these public complaints, the Japanese government says

0:15:24.800 --> 0:15:28.560
<v Speaker 4>it wants to attract more tourists. Its goal is to

0:15:28.560 --> 0:15:32.120
<v Speaker 4>welcome sixty million foreign visitors a year by twenty thirty.

0:15:32.480 --> 0:15:34.920
<v Speaker 4>That's a jump of more than sixty percent from last

0:15:35.000 --> 0:15:38.680
<v Speaker 4>year's record, and that Mia says might add more pressure

0:15:38.880 --> 0:15:40.080
<v Speaker 4>on macha's supply.

0:15:40.840 --> 0:15:43.680
<v Speaker 5>Your macha lattes will probably become more expensive if the

0:15:43.760 --> 0:15:46.960
<v Speaker 5>shortage continues. And I know a lot of new macha

0:15:47.000 --> 0:15:49.960
<v Speaker 5>businesses and cafes, not just in Japan but all over

0:15:50.000 --> 0:15:52.720
<v Speaker 5>the world are having a really hard time finding tea

0:15:52.800 --> 0:15:56.480
<v Speaker 5>producers with enough to sell. So I've heard that wholesalers

0:15:56.520 --> 0:15:59.560
<v Speaker 5>in Japan just have to turn down new clients because

0:15:59.600 --> 0:16:02.640
<v Speaker 5>a lot of macha for the next harvest is already reserved,

0:16:03.080 --> 0:16:05.320
<v Speaker 5>So that's going to cafes and Japan that are trying

0:16:05.360 --> 0:16:08.080
<v Speaker 5>to start out, and cafes abroad. I know a lot

0:16:08.120 --> 0:16:10.920
<v Speaker 5>of cafes and foreign countries are starting to jump on

0:16:10.960 --> 0:16:13.880
<v Speaker 5>this matcha tron, but it's almost too late because there's

0:16:13.920 --> 0:16:14.600
<v Speaker 5>just no supply.

0:16:16.240 --> 0:16:19.280
<v Speaker 4>Miah, I think we should drink our drinks, our macha

0:16:19.360 --> 0:16:24.800
<v Speaker 4>drinks while we can still afford them. Of course, enjoy, cheers, cheers.

0:16:27.640 --> 0:16:30.520
<v Speaker 4>This is the Big Take Asia from Bloomberg News. I'm

0:16:30.560 --> 0:16:34.480
<v Speaker 4>wan Ha. This episode was produced by Naomi mum Young

0:16:34.560 --> 0:16:37.280
<v Speaker 4>Young and Jessica Beck. It was edited by Grace Jennings

0:16:37.360 --> 0:16:40.600
<v Speaker 4>ed Quist, Patty Hirsch, and Isabella Stegger. It was fact

0:16:40.680 --> 0:16:43.560
<v Speaker 4>checked by Adrianna Tapia and mix and sound design by

0:16:43.600 --> 0:16:48.440
<v Speaker 4>Taka Yasuzawa and Alex Uguira. Our senior producer is Naomi Shaven.

0:16:48.720 --> 0:16:52.720
<v Speaker 4>Our senior editor is Elizabeth Ponso. Our executive producer is

0:16:52.840 --> 0:16:56.480
<v Speaker 4>Nicole Beemster Bower. Sage Bauman is Bloomberg's head of Podcasts.

0:16:56.680 --> 0:16:59.840
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0:16:59.840 --> 0:17:03.080
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0:17:06.320 --> 0:17:06.760
<v Speaker 4>next time.