There’s a matcha shortage. Could Minnesota outdrink its supply?

Veronica Nelson walked into SK Coffee in the downtown Minneapolis skyway determined to get her $7 matcha latte.

“I just can’t have it anywhere else,” the Minneapolis resident told barista Haley Voehl.

Nelson shares the craving for the premium Japanese tea with a growing number of people in the Twin Cities. SK Coffee has doubled its matcha sales in the past year, according to owner Nate Broadbridge. The Northern Lights Tea Co., a Minneapolis-based wholesaler, has seen its sales jump 120%.

But the surge in demand comes during a terrible time, after spotty weather in Japan scythed harvests and sent matcha prices soaring over the summer. Now, after the harvest has concluded and prices stabilized, the concern for local matcha sellers is simply keeping the popular drink in stock.

As Minneapolis threatens to out-drink its supply, the city’s burgeoning craft matcha scene still keeps pressing — and paying — onward.

“We do have to understand that a lot of those experiences, those prices, are going to go up,” Voehl said.

Minneapolis might not come to mind as an American hotspot for matcha. It certainly wasn’t when, in 2020, Simon Parish opened Northeast Tea House, a Japanese matcha mill a few blocks from the Mississippi River. At the time, Parish was only the second person milling his own matcha in the country.

But the current popularity of matcha, which isn’t an everyday tea in Japan like it is for some stateside enthusiasts, has posed a fundamental challenge for the industry. Only 2% of Japan’s tea fields are dedicated to growing the leaves that become matcha, Parish said. And if you grind those leaves too fast, he added, you’ll degrade the flavor. A mill like his only churns out some 40 grams of matcha per hour, enough for just 20 cups of tea.

“They literally can’t keep up,” he said.

Matcha grows best in the cool, wet areas of Japan. But heatwaves tore through the country’s tea fields this summer. Parish said his leaves almost doubled in price. Angie Lee, owner of boutique Moona Moono in Uptown, said hers jumped 40% “overnight” in August, after tariffs hit imports. Lee absorbed the loss in September but is exploring raising prices on her matcha products.

That’s likely the last consumer-sided price increase until farmers harvest a new crop of leaves in the spring, several matcha sellers said. But as the next harvest grows, the pressure shifts from customers to sellers.

Parish said his producers have stashed away enough matcha to last him through the year. But if demand spikes again in the winter, Parish is worried he might run out. Northern Lights, the other wholesaler, stopped selling one of its varieties of matcha after its producer abruptly announced they’d run out of their backstock, according to owner Noel Martin.

“[Japan] isn’t currently set up for a whole world that loves matcha,” he said.

SK Coffee, Northeast Tea House and Moona Moono all use ceremonial grade matcha, ground from the tea leaves that come off the farm first and give off the deep green hues that attract views on social media. But Lee and Parish have considered lower-grade varieties to help soften price increases.

Lee bought a box of lower grade matcha when she was opening Moona Moono; she remembers it smelled like fish when she cracked it open. Lee tried it again this summer but said the color didn’t look right. Lee kept the ceremonial stuff, even if some consumers wouldn’t have noticed a lower grade.

“Folks will come in, and they want to try matcha, or they like matcha, but they might have been introduced to matcha as being a very sweetened drink,” Lee said. “There’s also ways in which working with our baristas will often help folks discover what type of matcha they actually like.”

SK Coffee hasn’t raised matcha prices since 2023, but some increases are likely on the horizon next year, said Broadbridge, the owner. The local chain’s $7 latte hasn’t turned off too many Minneapolis customers, whom Voehl describes as having newfound “affluency” around food and beverage tastes.

“That’s a gamble, right? Because there’s also a part of you that can always adapt to the neighborhood,” Voehl said. “But our focus is very singular.”

Nelson keeps coming back to SK’s Skyway location. She packed a lunch that day, so the $7 felt like a fair exchange with herself.