At a financial results briefing on December 2, Daisuke Honjo, President of Ito En, revealed that the company is considering price revision for “Oi Ocha” early next year in response to a sharp surge in raw tea leaf costs.
President Honjo highlighted the sudden spike in Shutou (autumn-winter) bancha — a relatively inexpensive tea leaf with strong demand in the beverage market — as a key driver.
“Shutou bancha had traditionally hovered around 300 yen per kilogram, and even at its highest never reached 500 yen. But in mid-October it jumped to 3,400 yen per kilogram, and while it has since settled into the 2,000-yen range, the situation in the beverage market, at least in the tea category, has become quite serious — and frankly, we ourselves are caught off guard by how sudden this has been,” he said.
He believes the global matcha boom is the driving force behind the surge in raw tea leaf prices.
In September and October, President Honjo visited producers directly and confirmed the growing demand for matcha.
“Matcha orders are literally coming in from all over the world, going directly to farmers without going through intermediaries. Farmers who had traditionally grown tea are shifting to the production of tencha — the raw material for matcha — and the volume of green tea is decreasing as a result. It is unclear whether the matcha boom will continue at the same pace around the world going forward. We will be closely watching whether this is a temporary phenomenon or whether high prices will persist,” he stated.
While rising costs are squeezing the profitability of the green tea beverage segment, he also pointed to a bright development: renewed vitality on the production side.
“Because ‘growing tea is now profitable,’ we’re hearing that, for example, successors are returning to family farms and a few more people are starting to take up tea farming. When farming is profitable, people follow. The farmers we met were genuinely very upbeat and positive — they gave us energy too,” he said.
