Basics 4: About the price of Japanese tea

How is the price of Japanese tea determined? What is the cause of the price difference of Japanese tea for overseas countries?

First of all, the basic difference is due to the harvesting season of Japanese tea. Second harvesting tea leaves are one-third the price of first picking. The third tea is 60% of the price of the second picking tea. Sencha sold at supermarkets for 500 to 1000 yen per 100g is the second picking or third picking tea at best, even if it is a famous manufacturer. It is natural that it is not delicious because it is low in theanine and high in catechin. 

Next, there are the number of processes, and auxiliary materials. If the sencha process is standard, roasting process is added to hojicha. Matcha also has a powdering process. Hojicha powder requires two processes, a roasting process and a powdering process. Taking tea bag products as an example, the unit price per 100g increases because it requires a process of cutting to a size that fits in a tea bag, a process of filling and enclosing in a tea bag, and in some cases required a process of individual packaging. Tea bag products are convenient, but they are quite expensive.

Finally, it is the production area. The quality is not very high on flat terrain with low altitude, but it is easy to mechanize and can be mass-produced. Therefore, the price is generally low. In terms of black tea, it is similar to the Assam region. On the other hand, tea leaves in the mountainous areas at high altitudes are of high quality due to the difference in temperature of intraday. However, it cannot be mechanized and can only be harvested manually. Therefore, the price is also high. It's like Darjeeling. The highest altitude is about 500m in Kawane, Uji and Shizuoka, which are called high-class tea. Mino Shirakawa, which we handle, is the highest tea plantation in Japan with a height of 800m. By the way, since Japan is a mid-latitude region, the cultivation limit of Japanese tea is 850m above sea level.

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Price difference with overseas

Generally, all foods sold in Japan are exported and sold in Europe, and the retail price jumps from 3 times to 4 times. It doesn't make much difference also in the US and other regions.

This is due to margins, tariffs, VAT rates, shipping costs, etc. at the distribution stage in the exporting country. The big one is the distribution stage margin. Therefore, if you think about retailing, it might be better to purchase directly from a Japanese partner than to purchase via local import trading companies, and selling on the Internet can cut intermediate costs. There are many overseas buyers who are actually making such efforts.

Another issue is shipping costs. The price of crude oil, which had once fallen due to the corona disaster, has jumped five times due to the influence of the situation in Ukraine. As a result, fuel surcharges have skyrocketed and logistics costs have risen by around 30-40%. This is an urgent issue that needs to be devised.

The price difference with Chinese tea can be explained by the labor costs of people engaged in agricultural work. The other is that Chinese tea can only be exported as low-grade tea due to domestic circumstances. Therefore, for example, there is a price difference of more than four times between Japanese matcha and Chinese matcha. However, recently, the number of consumers who demand quality is increasing, and the trend is to demand high-quality Japanese matcha.