Latest / Specialty Matcha Podcast / Breaking: Japan Seeks GI for "Japanese Tea"

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Breaking: Japan Seeks GI for "Japanese Tea" · Specialty Matcha Podcast

0:07
Hello and welcome to this Best team match podcast.
0:09
My name is Ryan. This is my Coho Zhongjun who
0:11
also goes by Sam. Hello, hello and we're the Co
0:14
founders of Sanko Macho products.
0:16
Yeah, we launched this podcast to discuss our learning journey,
0:18
Macho, share startup stories and interview experts.
0:20
And we're here actually breaking some news.
0:23
Every once in a while we have the opportunity to cover
0:25
something that's happening in real time and we also published
0:29
a sub stack about it. But Japan is filing for GI
0:33
status for quote the Japanese tea.
0:36
Yeah, that's very interesting. So what what?
0:38
What is the GI Ryan? So GI is geographic indication
0:42
and it's around protecting a product that's grown in a place
0:47
from a certain style. And so the idea is that it's
0:50
encompassing and protecting something that is very regional
0:55
and worth protecting and has specific methods or specific
0:58
terroir or specific heritage from counterfeits,
1:03
impersonation, and also the Gray zone.
1:06
So you don't need to have GI status in some countries to
1:10
prevent against outright fraud. You can't take pure Chinese tea,
1:14
enable Japanese tea and sell it in almost every country.
1:17
There's existing laws and framework that prevent that from
1:20
happening. Just straight up illegal.
1:22
Straight up illegal, but there's quite a bit of Gray zone.
1:26
Some of the Gray zone could be milling and xiage processing.
1:30
So for example, within the world of matcha, we're all very aware
1:34
that there's a lot of tancha that's being grown in China,
1:37
imported into Japan, and you know, it's getting blended into
1:40
Japanese products where there's a significant transformation
1:44
step. And after that transformation
1:45
step, right, you can call it made in Japan, maybe the leaves
1:49
are not grown from there. And then, you know, it's also
1:51
going to depend on, you know, where you're exporting it to
1:54
those different laws. Yeah.
1:55
Normally they would use that trick to get rid of tariffs to
1:59
some. Yeah, there can be some pretty
2:01
big incentives around different like tax policies.
2:05
Geographic indication is like important for supply chains.
2:09
It's important for trade relationships between countries.
2:12
And it really only means anything where you have
2:15
reciprocal GIS. So GIS are reciprocal.
2:18
So they're only worth anything in the country that they're
2:21
indicative of. And this is the first, most
2:23
interesting piece of the news to dissect is that the number one
2:26
market, at least in the case for matcha outside of Japan is the
2:30
United States. And the United States does not
2:32
respect GI. So what is it just EU?
2:36
EU, some Southeast Asian countries.
2:38
It's a handful of countries, the most relevant ones.
2:42
The EU and Japan set up a bilateral negotiation in the mid
2:46
2000 and 10s, I think 2017 if I remember correctly.
2:51
What it allows you to do is tap into to remove Gray area
2:55
products. So if if Chinese producers, for
2:58
example, want to label something as Japanese style matcha, for
3:03
example, or Uji style matcha or Uji ceremonial matcha and sell
3:08
it into, let's say the EU, for example, there's a whole
3:12
regulatory network and system and departments to get that
3:16
cleared off shelves and monitoring agencies.
3:19
But these, this type of framework doesn't exist in the
3:21
States. And it's one reason why you can
3:23
have Parmesan made in Wisconsin, where this product can
3:27
definitely not exist. How about producers and the
3:30
blend houses within Japan that's selling to domestic Japanese
3:34
consumers but using materials outside of Japan?
3:38
I don't think you could label it as the GI product.
3:40
And that's the other interesting thing about the Japanese tea
3:43
industry is that you can have both GI and non GI for the same
3:48
type of tea. Really.
3:50
So like Yami. So there's two great examples.
3:53
One of them is traditional authentic yame gokoro, Han
3:57
gokoro, but there's also yame gokoro that's non GI.
4:01
So it's not a requirement. No.
4:04
It's a choice. It's a choice, and there's some
4:07
rules about what you can do for processing, what you can do for
4:09
sourcing. So it really makes you wonder
4:12
what all of the yame Gokoro is if it's not the GI yame Gokoro.
4:18
I mean, supposedly or according to the rules, it has to be Hansu
4:21
Reichstra shaded and but there's remarkably few acres that
4:25
actually grow it. So it begs the question, are
4:27
there producers in yame or anyone making yame style Gokoro
4:31
labeling it as Yame tea? And we know this is a big
4:34
problem across Japan. Actually, we learned from Oscar
4:36
Breckel that until recently, you could have a lot of Shizuoka
4:40
Sancha, had Kagoshima material blended into it and was labeled
4:43
as Shizuoka Sancha. This is also the case in Uji,
4:47
which is, you know, most of the Uji Macha or Uji Cha doesn't
4:50
come from Uji, doesn't even come from Kyoto, can come from any of
4:53
the four prefect trademark zone, Narashiga, Mia and Kyoto
4:57
Prefecture, so long as the finishing is in Kyoto
5:00
Prefecture. So you know, you have a couple
5:02
different things going on. You have trademarks which are
5:05
trying to defend origin and define provenance and process
5:10
that you have this GI system which is bilaterally recognized.
5:15
Saying that there's this very unique product from this very
5:18
unique place that's worth protecting because it's done in
5:21
a very particular style, like Champagne from Champagne or
5:24
Parma from Parma, Ham from Parma.
5:26
And it's to get rid of the imitators and to remove this
5:29
Gray zone of Japanese style Uji Uji grade.
5:33
I've seen that from some Chinese matcha tea suppliers in China.
5:38
Well, but in this case, if we really looking to what's going
5:42
on in this GI filing, it protects Nihoncha, the kanji and
5:47
the romanization, Nihoncha, the romanization for Nihoncha and
5:51
the English Japanese tea and Japan tea.
5:56
It's very smart because it does kind of block people for doing
6:00
tea laundering between China and Japan or other countries between
6:03
Japan. But, you know, it still allows
6:05
the freedom for people to do laundry within Japan.
6:08
Well, yes and no. They wouldn't be able to label
6:11
that product then as GI. So it's a little bit unclear in
6:14
this filing. Does that mean every Japanese
6:16
producer has to label GI? Or maybe there will be some that
6:19
want to use foreign materials and we'll just opt out of this
6:23
GI system, which leads you to think through the implications
6:26
of this a little bit, right? Because who does this GI
6:28
actually help, right? If you are a really nice cafe in
6:33
the EU or in the UK, right, You probably have a direct to
6:38
produce a relationship, right? If you're really artisanal
6:41
specialty and if you have a directed producer relationship
6:44
and you're like hopping on a video call with them asking how
6:46
their harvest seasons going, you know where that materials coming
6:50
from, right? People in Thailand that buy from
6:53
Goku show or Shirakawa or any of the famous producers and Aichi
6:57
or in or in Kagoshima or Yame, right?
7:01
Like they know these A lot of the times the producers are
7:04
named like these people. This material doesn't need GI
7:07
status. If you're transparent about your
7:09
label and your sourcing details like this is just kind kind of
7:13
like unnecessary to verified provenance, maybe it kind of
7:17
gives you a guarantee that someone has audited.
7:20
Ideally, you already have that trust that you trust that Suji
7:24
Sons material is actually coming from Chirikawa or that the Goku
7:28
Show material is actually coming from Goku Show.
7:31
Or if it's not, then it's clearly labeled as a blend.
7:34
You know, where they're, you know, lubing in material from
7:37
others areas, mixing it in their own and creating blended
7:41
products, which is also fine so long as it's too close.
7:44
But they're definitely some more shady to use a horrible matcha
7:48
pun players within the Japanese tea industry that we've heard of
7:54
and that we know about that are importing foreign tension,
7:57
blending it into products and labeling it's matcha.
8:00
So this really fights back against that.
8:03
Yeah, basically putting a endorsement or a legal seal on
8:09
made in Japan, so to speak. Yeah.
8:12
And to to help fight against all of this.
8:14
So we, we looked up the numbers because we were curious like how
8:16
much foreign tea, foreign tea material is imported to Japan
8:21
and turns out that it's about a little bit over 5000 tons.
8:25
And this is across all types of tea, not just for matcha or
8:27
Tanja. I mean about 90% of that number
8:30
is coming from China. And we've actually tasted a lot
8:33
of these materials in China that we know are being exported to
8:37
Japan. And what's interesting is that
8:39
it's really good. And if you're just looking at
8:42
the organoleptic or the sensory differences between that Chinese
8:46
grown tensha and the tensha commodity tension that's being
8:50
traded around Japan to create matcha, it's nearly
8:53
indistinguishable. There's a lot of yabukita, oku,
8:56
Midori. We've heard of even Asahi being
8:59
grown in mainland China, although we don't think it's
9:01
particularly spread because we cannot find it.
9:03
We're very interested in finding it.
9:06
But so where does that material go now?
9:09
Let's say that's all being blocked.
9:11
Do these larger companies just create an international matcha
9:15
blend and kind of backtrack that material saying, you know, we're
9:19
creating a new blend. It's not AGI blend, but it
9:23
matches our Japanese tea master blenders criteria for something
9:28
something Noshiro. Or does that material just not
9:31
enter Japan, and in which case there's literally thousands of
9:36
tons of material that needs to find a new market, which is an
9:40
interesting secondary implication.
9:43
Absolutely. And not to mention that a lot of
9:46
these gardens and facilities are either directly or partially
9:50
owned by Japanese tea farmers or tea producers.
9:53
They already have a playbook of doing all of these.
9:57
Speed of them, you know, either create a new brand or finding a
10:01
new market would I think exceed a lot of people's expectation.
10:05
Yeah, and there's some interesting incentive for them
10:07
to find in new markets too, because in China, I think
10:10
Tesla's The only exception, He has to be at least 51% for a
10:16
state. That's right, Chinese control.
10:19
That's right. Yeah, you can.
10:21
Owned up to 49% of the company, except for Tesla.
10:24
Got a special exception. So even the control of where
10:28
this material goes. And we've heard of a lot of
10:30
interesting arrangements, but between prefectural governments
10:34
who are and you know, a lot of this tea that's being grown in
10:37
China. You know, we think of Chinese
10:39
tea as imitation products and when it's being imported to
10:42
Japan. But the reality is places like
10:44
Guizhou, which is one of the the larger tensha producing regions
10:49
in China are really incredibly poor.
10:52
You were you once were telling me that you know, Guizhou is, is
10:54
not a very wealthy province and there's a lot of poverty there.
10:58
And despite some famous product like Guizhou, Malta, it's
11:02
largely a very poured province. The GDB output is ranked as some
11:08
of the lowest among the whole country.
11:11
Yeah, so and we were just a Canton fair and what we're
11:13
learning as we get more context about Chinese grown macho and
11:17
tensha is that it's for poverty alleviation.
11:20
They're grown in areas that are very rural, that are very
11:24
agricultural, that already have tea.
11:27
But a lot of the green tea consumption in China and all tea
11:31
consumption in China is actually falling.
11:33
We've even heard of some farmers who literally didn't pick the
11:36
tea because it wasn't profitable.
11:38
They're getting like less than $0.20 per kilo wet leaf and
11:42
which is it wasn't literally wasn't worth the effort picking
11:45
even by machine. So they just let it grow.
11:48
Yeah, which is very interesting place.
11:51
It's not just about Japanese matcha.
11:52
They are actually one of the largest supplier to quote UN
11:56
quote fake longing or fake fortune inside China too.
12:00
There's a very similar tea laundering situation that's
12:04
happening in China, similar to Japan.
12:07
And the whole industry is set up in the way that it's so agile,
12:12
so versatile, it can literally be converted into a brand new
12:17
production manner to make a new tea, so to speak.
12:21
And the government is behind all of these activities.
12:23
Not only they're behind the cultivation and the production
12:27
of all of these teas, they're also behind the selling.
12:31
That's one of the, I would say magic about, you know, socialism
12:35
or state owned state controlled economy is that the government
12:40
is not just giving you subsidies.
12:42
They help you to find markets too.
12:44
Yes, and there's a lot of state owned food companies like CAFCO
12:47
for example, and they can basically form a guaranteed
12:50
buyer. It's a very interesting system.
12:52
It's like one of the few we think of China nowadays.
12:55
It's a relatively capitalistic society, but this legacy of
12:59
state owned companies really makes major market forces.
13:02
Or it's capitalistic in the country level.
13:06
Country is almost like a single company.
13:12
So the reason we're talking about this is if you look at the
13:16
arc of modern tensha production in China and Matcha, they had
13:20
the world's perfect first buyer. If Japan is your primary export
13:25
market, you know having we, we were once a service provider for
13:29
technology for large Japanese food and beverage companies, the
13:33
famous brands that you see at the convenience stores,
13:36
etcetera. Back at our last job when we
13:37
were working on AI sensory tools, Japan was one of our
13:40
earliest markets and earliest set of clients.
13:43
And they are by far have the highest standards of anyone we
13:46
worked with in the entire world. They tell you exactly what's
13:49
wrong. They give you your the exact
13:51
specifications and we had to constantly adapt and re adapt
13:56
the level of service and the type of analytics that we were
13:59
providing them. And the same is true for all
14:01
products. So a lot of this tension supply
14:04
was probably getting very silently, not even passively,
14:07
very actively perfected through feedback.
14:11
And we've actually talked to some Japanese tea producers that
14:13
work directly with tension processing facilities in Jijiang
14:17
that are constantly giving them feedback on how to increase
14:20
quality. And they're importing a lot of
14:23
Japanese tea processing equipment and Japanese
14:26
cultivars. And this level of feedback,
14:28
which has been going on for at least a decade, probably close
14:32
to two decades. I think the earliest one that
14:34
I'm aware of is IAA setting up its subsidiary in Jijiang in
14:38
2005. But I'm sure that there's are
14:40
there are others that were even earlier that were having this
14:43
level of feedback. And the Chinese just have such a
14:45
big incentive to keep this ball rolling.
14:47
And if this export market evaporates because of this GI
14:51
protection, that leaves them with an interesting problem.
14:54
So they're already now trying to push high quality Chinese, but
15:00
we've tasted some of it's just really just incredibly high
15:02
quality, indistinguishable from like quote, UN quote average
15:06
ceremonial grade matcha in Japan and trying to find new markets
15:10
lower the much lower prices than what Japan can offer, but their
15:14
best material still probably going to Japan.
15:17
Now, if that market evaporates, what a fantastic marketing
15:21
opportunity to just say, hey, this material was being exported
15:24
to Japan. It was being blended into quote
15:27
UN quote, Japanese matcha, and they were allowed to call it
15:29
because the milling was there. And we've worked with these tea
15:32
masters. This material is good enough for
15:34
Japanese tea masters. Here it is as a premium Chinese
15:38
product at 40 to 50% of the price.
15:42
It's only 100 KG hundred U.S. dollars per kilogram wholesale,
15:46
for example, versus 200, which may be the average price
15:50
approximately wholesale rate for a quote UN quote ceremonial
15:53
great matcha in Japan probably ranges from about 1 to $200 AKG.
15:59
So that could be pretty scary for the Japanese tea industry
16:03
and it might actually cause prices to raise to you cut out
16:06
that supply and that was quote UN quote being laundered into
16:09
the system. Classic supply and demand
16:11
dynamics, along with all the compounding factors.
16:15
You have farmers aging out, you have fewer succession planning,
16:19
and you have, you know, just less tea.
16:22
Less supply means higher prices, especially with this GI.
16:25
And demands just will naturally flow to the lower price market
16:30
to lower price supplier. Especially for in the B2B
16:34
environment, which are the best subscription buyers?
16:37
Most predictable revenue? So the most.
16:39
Rational ones, too. Yeah, the most rational too.
16:42
That's that's such a good point, right?
16:43
When you're a business sourcing tea for your cafe, right, You
16:47
want a reliable supplier at a good price where it tastes good.
16:52
And now that matcha is kind of moving into sort of the early
16:56
specialty phases, they can say, oh, wow, actually, no, this is
16:59
Chinese matcha, and it's really good.
17:01
You should try it. And when they have a great
17:03
experience with that product, this reputation for Chinese
17:06
matcha, which let's be fair, it's really like Chinese matcha
17:09
kind of sucked for a long time, right?
17:12
It was using unshaded material. It was using cultivars that were
17:16
probably pretty bitter. Who knows how long it's set as a
17:20
powder and it just didn't taste good and it was super cheap.
17:24
And there's still a lot of producers in China doing that.
17:26
But that's just not the reality on the ground anymore.
17:29
And also the Chinese tea companies are starting to make
17:33
matcha with their own cultivars, with fooding tea cultivar, white
17:36
tea cultivar with Long Jing 43, traditionally from Hangzhou,
17:41
that's being shaded, and it can taste excellent.
17:43
We just tasted a bunch of samples.
17:45
And they could, this really could be the impetus to force
17:49
China to lean into its own products, its own style.
17:53
I don't know if they call it mocha.
17:54
I don't know if they call it just Chinese matcha, but Chinese
17:57
matcha with Chinese characteristics, not just
18:00
Chinese matcha with Japanese characteristics.
18:02
Absolutely. And for consumers, it's just
18:05
great news. These these matchas coming out
18:08
from China are using Long Jing 43 or some other local color
18:12
bars just taste like something entirely different than all of
18:17
these matcha we have tried in Japan.
18:19
A lot of these very unique floral notes, these herbaceous
18:23
notes, these teeth, more teeth like notes, this very unique
18:27
bean paste notes. They keep talking about that.
18:31
It's unheard of in Japan, but being pace is such a unique and
18:35
high quality indicator for launching in Georgia and they
18:38
are trying to kind of repurpose those taste reference into all
18:43
of these new Chinese matcha. And I think it's a great thing.
18:46
It's it's wonderful. It's such a unique and
18:49
refreshing consumer experience. Yeah, it's a great diversity
18:53
that, you know, we, the Specialty Matcha podcast, really
18:55
advocate for. And there's probably tons of
18:58
existing Chinese green tea cultivars that might be very
19:01
suitable for shaded cultivation. They just undiscovered.
19:05
And so there might be a real renaissance here of just more
19:07
variety. And let's be honest, I don't
19:10
know, I feel like maybe we taste too much matcha and it's been in
19:13
the industry too long. Sometimes I get a little bored.
19:16
There's only so many Oku Midori's and Yabukitas drink and
19:21
like enjoy rationally just like some of it it the flavor
19:27
diversity is a little more narrow than like I would say
19:30
like oolong or even just like Chinese oolongs or Taiwanese
19:34
oolongs. I feel like there's a lot more
19:35
flavor diversity, which I think would be a good thing if you
19:39
really care about, you know, the product.
19:41
So Ryan, would you say that this GI might actually accidentally
19:45
helping end up helping China? Oh, no doubt.
19:48
What do you think? I think it's very hard to
19:50
speculate at the moment, but the the foundations is there like it
19:55
only takes a few smart enough people with the right contacts
19:58
to really move the balls forward and I think that you know.
20:03
This GI is very interesting. It's Japanese tea and Nihong
20:08
cha, and if you take into the consideration of just how
20:11
complicated the whole tea supply chains within Japan is, this is
20:16
almost like the best they can do for for for current status quo.
20:20
Yes, well, that, that's, that's actually a perfect segue into
20:23
the other half of this article that we wrote on sub stack,
20:26
which if you haven't read or subscribed to our sub stack, we
20:29
we really recommend you do so it's just called specialty much
20:31
podcast sub stack. Yeah, please like and subscribe.
20:34
Within Japan, we are seeing all these complicated regional
20:37
ecosystem of tea supply chain, like Fuji, like Yame, like
20:42
Kagoshima, they all sort of talk to each other and they talk to
20:46
all of the virginity areas in the surrounding regions.
20:49
And it will be very difficult to GI these, you know, single
20:54
origins because, you know, a lot of the teas are just not coming
20:58
from that particular location. But, you know, I think this is a
21:01
start, a good start that lays the seed of, you know, a region
21:07
is worth protecting. And I think it's a, it's a, it's
21:11
a good effort that people are trying to move the ball forward
21:15
because you need some sort of protection to begin with.
21:19
We need some sort of idea of origin to begin with for people
21:23
to go into more granular level in the future.
21:26
Yeah, definitely 1/2 step. I take a slightly different take
21:30
like reading between the lines or quote reading the tea leaves
21:33
here is that I don't know I was talking about this.
21:37
My girlfriend who worked used to work in agriculture backgrounds
21:40
and chocolate, but she spent a lot of time in Japan and used to
21:43
be fluent in Japanese. We went to agricultural school
21:46
in Tokyo. And I've been complaining about
21:48
this whole uji matcha thing and how verifiable provenance in
21:51
Japan. It's just incredibly
21:52
frustrating. And I said Japan just filed for
21:55
GI for something in tea. What do you think it is?
21:57
And she said I have no idea. I said, oh, it's for Japanese
22:00
tea and as a European, as a French, as a French woman, she,
22:04
she laughed and said, that's the best I can do because it's like
22:08
very unusual to have something so broad.
22:11
You, you don't GI French sparkling wine, you GI
22:14
Champagne. And there's a reason to GI
22:16
champagne, right? It's the chalky soil.
22:18
It's the region, it's the history, right?
22:20
And if you have the same from noir, you call it Cremanto
22:23
Loire, right? Like you don't call it
22:25
Champagne, right? There's a different name for the
22:27
thing. Yeah, but the for the current
22:29
status quoed in Japan, I would say it is the best they can do.
22:33
It is the best they can do. It's like Uji for example.
22:36
You think why don't they do Uji? Uji is the single greatest brand
22:40
name, right? If you look at the four
22:41
prefecture trademark zone, it produces about 1500 tons of of
22:46
of of matcha, which is about a third of all of the matcha made
22:50
in Japan. So about 1/3 of all the tea in
22:52
this country can be labeled as quote Ujimacha.
22:56
Problem is, Uji only produces 37 tons of tea from about 35 active
23:01
tea farming families and that represents like 1 to 2% of the
23:06
actual thing. And it's just not GI a bowl,
23:08
right? Like you can see all of these
23:10
different stakeholders for Uji Cha contort themselves into a
23:14
pretzel trying to define what Ujimacha actually is or Uji cha
23:18
actually is. But you have this trademark and
23:21
it's new by the way, it's only a 2 decade old framework.
23:24
Before that, it's very unclear if it was just the Wild West or
23:27
everyone just did you know, their own sourcing thing.
23:30
There's also a rule that called the blend rule where you can
23:32
call it Uji Matcha blend. 50% of that material can come from
23:36
somewhere else, so you could have it theoretically even from
23:39
China. I found no rule against that.
23:41
Or let's say more likely Kagoshima being mixed into this
23:44
Uji matcha blend. But then you know they also have
23:47
the UNESCO bid the whole Yamashiro region encompassing
23:50
like Wazuka, Kyoto, Nabe E Day, JoJo, etcetera.
23:55
Wazuka, right? And having this be the Uji
23:58
matcha landscape. But that totally ignores the
24:00
north part of Kyoto, say like Fukuchiyama, for example, right?
24:05
And then you have some people arguing just for Kyoto as Kyoto
24:08
tea, Kyoto, whatever. And then you have the people,
24:12
especially even in Uji that are like, no, we are uji.
24:14
This is Uji matcha, this is real Uji matcha.
24:17
Everything else is just this marketing idea.
24:20
And then you have the people that are very blend centric
24:22
saying, Oh no, you know, these people, these producers, these
24:26
bunders have always been sourcing material and from these
24:29
other prefectures, from these other regions.
24:31
And it's part of the greater history.
24:33
But if you really dig into that history, which we will in the
24:35
next part of the series, is that it was a state controlled
24:38
monopoly during the Addo era. It was literally illegal to do
24:41
shaded cultivation outside of Uji.
24:43
And maybe that loosened up a little bit as the Addo was
24:45
falling. But really it's about a 100
24:48
years old tradition. It's not as old as people think
24:51
of having this tension method spreading.
24:54
So like uji and the idea of uji is like very obviously defined
25:00
so broadly for profit, but for people and consumers and
25:04
countries that truly care about a thing grown in a place in this
25:08
very particular style with a particular history, it's not GI
25:12
a bowl. It's against the spirit.
25:14
Most of these definitions of what people think of as Uji
25:17
Macha like this. Like maybe four or five
25:20
different constituents that argue for different things.
25:23
It just doesn't map cleanly onto GI.
25:25
GI literally means geographic indication.
25:27
If if Uji got GI, what would all of the like basically commodity
25:33
tensha suppliers do in all of these other counties in the
25:37
Yamashiro region? And maybe Wazuka could have two
25:40
feet to stand on. People, you know, are beginning
25:43
to learn about Wazuka. I think Obubu has done such a
25:46
fantastic job. People all over the world have
25:49
that have interned at Obubu can go to their home countries and
25:53
like they talk about their trip. Maybe they work at teahouses.
25:56
Maybe they've opened a business at Wazuka could probably stand
25:59
on its two legs. But what about EDA?
26:01
And what about some of these other places that are are JoJo?
26:03
That's a little it's only beginning to you start to see
26:06
that be as a single origin. So like they've invested so much
26:11
in this Uji matcha mythology and stories and educational content
26:15
that it's kind of their golden goose.
26:17
And if they, I think if they GI Uji, you kill that golden,
26:21
golden goose and you'll realize that it's kind of just a
26:23
marketing illusion. Yeah, for the 35 tea farmers
26:27
that are actually in Uji, it will be a great thing.
26:30
It will be a fantastic thing. But for everyone else, everybody
26:33
else, this is almost suicidal commercially.
26:37
Nishio is the perfect use case. Nishio Macho tried to GI and
26:42
like. There is very little consumer
26:44
awareness for Nishio. The GI was so rigid that it
26:48
ended up like increasing the price of those products by 3X
26:53
and there just was no market for it.
26:55
There was no demand for it. There were no myths, no romance,
26:59
no business, no tea. No business, no tea.
27:02
And here comes a very interesting speculation is Ryan,
27:05
who holds the discourse for Fuji, right?
27:08
Like it's really not those 35 farmers.
27:11
It's the tea house, it's the tea brands, it's the large tea
27:15
companies. And they are having these
27:17
farmers on their hand. Like these farmers really do not
27:20
have that much agency to do anything.
27:22
And these tea company companies have way too much invested over
27:26
the course of time into building this Fuji system, this Fuji
27:30
brand that doing GI for Fuji Town, Wuji City would just not
27:36
make any sense to everybody. Something I was doing on my Uji
27:40
Macha research rabbit hole, which actually didn't make it
27:43
into the piece and maybe I should add it or maybe you can
27:46
just live here is I was really curious with the ownership
27:49
structure. I just trying to follow the
27:50
politics and the money of the Uji Cha trademark.
27:53
So the Uji Cha trademark both in Japan and the US, and I think
27:57
they have it registered in some other places along to the Kyoto
28:00
T Cooperative Association. I was like, oh, that's
28:02
interesting. Who are the members of the
28:06
cooperative associations and what I recognize any of them?
28:09
And when you look through that list, I didn't see any Uji Macha
28:13
farmer farming families that I knew.
28:16
Like I was searching for Suji San, I was searching for the
28:19
Shimizu family. I was searching for for a
28:21
Khalase Cha, no one I could find, I think.
28:26
And then I was trying to find, OK, which ones are actually
28:28
based in Uji? And it's actually the minority.
28:30
A lot of them are actually not based in Uji itself, but in some
28:34
Yamashiro region or May some of them weren't even from Shiro.
28:37
So that was really enlightening. The people who have the
28:42
political power to control that trademark have a huge incentive
28:48
to make it that broad. Oh yeah, not really just
28:51
incentive, right? It's only ownership.
28:54
So almost like would make more sense to rename Kyoto as Wuji.
28:57
Yeah, actually, but there would be a problem solved.
29:01
And actually before this framework, right?
29:03
The original framework was to have at least 50% of the
29:07
material coming from Kyoto Prefecture as part of the rule.
29:10
And it was originally set as sort of some voluntary
29:12
guidelines and from some big meeting that they had at Wuji
29:16
City Hall. But there wasn't enough
29:17
consensus. And part of the reason that
29:19
there was so much dispute was that there was not an volume
29:23
being produced in Kyoto. And you can argue all day, these
29:27
pure people who care about like it's the blend masters, it's
29:31
his, it's history that are sourcing from these other
29:34
regions. You know, they, they, it should
29:37
be left up to the, the T blend masters.
29:39
But it's, it's really about money, right?
29:41
When you say that there's not enough supply to meet the demand
29:44
for Uji Macha, that is a business decision.
29:47
It's not a product driven decision.
29:52
And so you know, it's and then I mean, you could also argue like
29:57
if you're intellectually honest with yourself, doesn't even
29:59
matter. Doesn't even matter that Chinese
30:01
Tancha is being blended into this tea and being labeled as an
30:05
Uji matcha blend. Maybe you have 20% from China
30:09
and 50% from Uji Trademark Prefecture zone and 30% from
30:14
Kagushima and it still tastes good.
30:16
Yeah, You could argue that with the right cultivar, the right
30:19
fertilizer plant, the right, you know, shading methods, you can
30:23
almost produce this Ugi flavor quote, UN quote anywhere else in
30:27
the world. One more reason why, at least
30:30
within the case of matcha GI doesn't make very much sense
30:34
because it's not terroir driven. The geographic indication
30:38
matters so much less then like champagne from Champagne or
30:43
Parma ham from Parma Ham, where you could argue like the local
30:46
microbial flora that is, you know, inoculating all of these
30:51
hams as they're dry aging actually does produce a unique
30:55
taste that cannot be replicated elsewhere, right?
30:58
And then you have San Daniela, you have other regions making
31:01
prosciutto and they taste different.
31:03
Although in this case in Japan, I would say that you really need
31:06
to take human into the equation too.
31:09
There is a regional style of doing tea and that's I would say
31:14
would definitely make a difference in the taste profile.
31:17
And it's definitely regional, but the region really spreads
31:21
and these people moves. These actually if anything is
31:25
appropriate in matcha is like this idea of quote champagne
31:29
style. Style.
31:30
Right. Like you can have Yami style
31:33
process. Like actually what's interesting
31:35
is everyone talks about terroir and then they talk about Yami
31:38
and they talk about how it has all these roasty toastiness.
31:40
That's not terroir, That's not processing decision.
31:43
Yeah, these notes that you get in like Hoshino sehcha tea, some
31:48
of them might be coming from the terroir, probably that's
31:51
actually mostly from the fertilizer.
31:53
But this, this is a processing decision difference between,
31:57
let's say, the Uji farmers versus the Yama farmers.
32:00
And we're here in Aichi, right? And apparently they do a little,
32:03
some producers here do a little more withering, also slightly
32:06
more roasty, toasty notes. That's a processing decision,
32:09
not a terror. But maybe you could call it IG
32:11
style, Toyota style. Or maybe, you know, you could
32:14
say the same for all of these Nagasaki producers who are using
32:18
this new machine that pan fries and steams the tea at the same
32:22
time, which makes it like super nutty, right?
32:25
Besides terroirs processing, then I think it's fair to say
32:28
style Fuji style matcha grown in China, right?
32:31
If it meets all the criteria of to replicate those tastes.
32:34
They're really. Actually more honest to the
32:36
product. They really should call this AI
32:39
anthropological indication. Yeah, exactly.
32:42
Much better use of let's hijack the term AI.
32:45
Speaking of terminology, I think the biggest marketing gift to
32:50
all of the other regions that this is GI will help, which I
32:53
think actually China is a huge side beneficiary of the
32:56
ceremonial grade. The people at the bottom of the
32:59
market who don't care about origin, right, Because if they
33:02
did, they'd probably like go deep, right?
33:05
Like if you're a buyer that's a specialty matcha buyer, but you
33:08
want to see Suji San for a kawas, A chaoseno say cha, but
33:12
you know that the product is coming from the people, not who
33:14
those people are, right? Like you're not being tricked.
33:18
You don't need the GR, and if you do need the GI, then you're
33:22
really we're being tricked and you were paying the intelligence
33:25
tax we referred to in the last episode.
33:27
That's right. But most people care about
33:30
ceremonial grade. That's like the top of the
33:32
marketing funnel for matcha. And there is no absolute no
33:35
reason at all why Chinese producers cannot advertise
33:39
themselves a ceremonial grade wonderful gift to the rest to
33:42
the all of these other regions, because that's actually where
33:45
probably the largest demand is. And then maybe if you know a
33:49
little more about matcha, you worry about Japanese.
33:52
And then if you know a little more about matcha, then you
33:54
start caring about producers or people or, or maybe you get in
33:58
one of the blend houses like Maruq and then you get deeper
34:01
and then you finally get to the level of farmer in terms of
34:04
where your interest lies. But it's a big, big funnel.
34:07
And as you go down, that funnel gets more and more narrow.
34:09
I mean, we're hoping the specialty macho, that bottom of
34:11
the funnel can explode so that these farmers who are actually
34:15
doing the work are the ones that are getting mythologized and
34:19
romanced. They're the ones who actually
34:21
deserve the credit for why these products taste so good.
34:24
But the ceremonial grade term, really, wow.
34:27
I think that's a wonderful. Gift, wonderful gift to
34:30
everybody. Yeah, this and the other one is
34:33
matcha. Yeah.
34:34
Like the term matcha. Like what If you look around all
34:38
of these GI products, you know, it's really the name of the
34:41
product that gets GI to not, you know, the region or the name
34:45
becomes the name of the product, the name of the place becomes
34:48
the name of the product. Like champagne the matcha.
34:52
I don't think it's GI though. And if you care about like
34:56
folksonomy, the folk use of language, the way people
35:00
actually use the words that they use, right?
35:03
Like, for example, like Champagne in some senses has
35:06
also transcended the, the wine, the sparkling wine that's grown
35:11
in champagne. If you watch travel influencers
35:13
like review a business Class C, like, is it really Champagne
35:16
that they're being offered at the beginning of their service?
35:19
Or is it a glass of Prosecco, right, like people have just
35:21
come to associate that word. Or if you go to a friend's house
35:25
and they're celebrating something and opening a bottle
35:27
of cava or bottle Prosecco, right, It's not uncommon to see
35:31
here's here's some champagne toast with most people just
35:35
don't know the difference. And if you look at matcha, same
35:38
thing. It's transcended that big time.
35:42
So it's and you know, the legacy with China like isn't I don't
35:46
think it's even GI Ball. It's an international product to
35:49
begin with, and the. History is too complicated, too
35:53
complicated because you could argue, really, if you zoom out,
35:55
it's Sinosphere. It's a Sinosphere product.
35:58
Yeah. So this whole GI really
36:01
influence the business world, not the consumer world, so to
36:05
speak. And.
36:06
Trade in terms of perception, right?
36:08
Because like, like people really care only about ceremonial grade
36:14
and the word Mata nowadays largely.
36:17
And for the really professional drinkers, consumers, they go to
36:20
the origin. So the people in the middle are
36:23
probably suffer price increases because if you take out some of
36:28
that supply cushion, you could argue that some of the people
36:31
who care about Origin the least are about to pay more for a
36:34
product. Because if you truly care about
36:36
Origin, you really go to the source and everyone else that
36:40
just one ceremonial or something for your smoothie or something,
36:43
you know, they're, they're very loosely engaged in the product.
36:47
But among like matcha consumers, regular matcha consumers, the
36:52
ones who care the least are about to pay more.
36:54
The GI might give it some positioning of some premiumness
36:57
and premium product, but it's also possible that the the
37:00
quality will just go down and the price will go up even
37:03
higher. Because the other thing
37:04
interesting about China is that these early days of tension
37:08
production is for EU compliance and it's for exportable tea
37:13
because there was no big domestic market.
37:15
And not just matcha, all kinds of tea too.
37:17
So there's a very large region of tea producing areas that are
37:22
optimized for exportation. The Japanese, well,
37:26
traditionally it was a Japanese product.
37:28
We weren't thinking about exportation.
37:30
There's a lot of move now to organic and having pesticides
37:34
residues that can actually be exported, but it's slow.
37:36
Yeah, takes 5 to 10 years for a lot of these pesticides to fully
37:41
degrade. And for these GI countries that
37:43
reciprocate GI with Japan, it's not the US who has lower
37:48
pesticide residue requirements. It's the EU, which is by far the
37:52
most complicated region to import Japanese tea into.
37:56
So we don't know if this is the case.
37:58
But if it is the case that some of this Chinese supply was for
38:02
EU importable tensha and matcha and you remove that, you're
38:08
taking a much larger subsection of that material that's going to
38:12
make it to those GI countries. So maybe you know it's going to
38:17
also increase the price of undifferentiated tin of matcha
38:22
where you're not talking about the producer into into Europe
38:27
until the Japanese can get more of their own supply.
38:30
But this vacuum will be very quickly fulfilled if you're
38:34
talking about China speed, yeah. And gives it gives China a great
38:38
opportunity and excuse to do this.
38:40
So yeah, it I don't know how I feel about this.
38:43
I think anything that helps with verifiable provenance is a good
38:47
thing for the whole industry and for specialty matcha.
38:51
I mean, let's be real, a lot of this is just consumer deception
38:54
like this. But it does have real
38:56
consequences and secondary implications when you crack down
39:01
on that tea laundering, it's not a good thing, I think.
39:04
So I think this is by far a good thing.
39:06
But it doesn't mean that it doesn't have secondary
39:08
consequences. And I think it's a universal
39:10
good thing for specialty matcha because it's going to force
39:14
China to lean into their own product and find new markets for
39:17
theirs and advertise it as a Chinese product and that it is
39:20
indeed high quality. And it's going to force the
39:23
Japanese tea industry to be a little bit more honest.
39:25
But you know, it also shows you that Japanese tea doesn't like
39:29
historically, they care about capacity.
39:31
Like you think about all these blends and flexibility, right?
39:34
If you're not revealing which cultivars or what actually goes
39:37
in a blend, it gives you a whole lot of options.
39:40
And consumers cared about consistency that it tasted the
39:42
same. No one was really deeply caring
39:45
about provenance and a legacy of that.
39:48
When you find new markets in a more cosmopolitan, global
39:53
contemporary culture where we do care a lot about the food that
39:57
we put in our bodies, it doesn't matter well over because it's.
40:00
So hard to have verifiable provenance in Japanese tea.
40:04
And it's kind of the whole tea market needs to transition from
40:09
very domestic Consumer Focus to very contemporary global export
40:15
focus across their whole tea supply chain.
40:18
And it just, it's exposing these gaps.
40:20
It's part of the reason why I think Ujimasha will never be GI
40:24
D, just all the political controls fighting against it.
40:28
The whole system is fighting against this concept because no
40:32
one cared about it. So that's where power
40:34
concentrated and kind of how the cards fell.
40:36
And now you're left with this Tetris board with very few
40:39
pieces left to maneuver. And that's already built up so
40:43
high. And I think this is the best
40:45
they can do as a Countrywide 1. Yeah.
40:48
If there's a lot of legacy to baggage inertia when you're
40:52
trying to push for this, you know, new mentality of viewing
40:57
and appreciating products. And in that sense, I think China
41:00
is very uniquely positioned in a way that it's.
41:03
So it's much easier to do that. When we were in Canton Fair, all
41:08
of these, you know, what used to be green tea producing regions
41:11
are now doing matcha and they're being super transparent about
41:14
their own products, where they come from, where that gets
41:17
processed, or if they did end up, you know, importing
41:21
materials from other regions, they will tell you to.
41:23
But this idea of regional product is baked in in the
41:27
beginning. Yeah, from the very beginning
41:29
with global export markets in mind.
41:31
But you know, they're also there's some hope too in the
41:34
Japanese tea industry. You know, these single estates,
41:36
it's the single farmers are are revolutionary.
41:38
Someone in Uji had to decide for the first time that they were
41:42
going to create a matcha product from Uji itself doesn't get
41:48
blended. And the moment you have the
41:50
single estate, single origin, let's say like a Suji san for a
41:53
Kawasaki Chimizu, right, it makes you wonder what all the
41:57
other uji matcha is. And you have two very
42:00
incompatible system 1 E 1 W commingling.
42:04
And they're basically competing narratives.
42:07
And as soon as those commingle, the system kind of breaks.
42:10
You have these like it's, you know, uji matcha.
42:15
It is not a single origin product, but it also is.
42:17
But the only way that material that's actually from Shirakawa
42:20
or from Gokusho can advertise itself because tea is a
42:24
business, is by saying this is the thing from the place.
42:27
That's the most interesting thing about that material.
42:31
But you know the farmer, you know the place, you know the
42:33
verifiable provenance. Well, it's difficult because for
42:36
them to say so and for them to sell their own tea, they
42:40
frequently end up getting threatened at their historic
42:44
historical procure us. It's a one way door.
42:47
You can't these large tea companies very easily.
42:49
And farmers in these regions are hesitant because they are afraid
42:54
that, you know, this demand from, you know, the global
42:57
market might disappeared because like these legacy tea houses are
43:02
stability like they have been paying and buying for so many
43:06
years. And there is a level of of trust
43:10
between these people. And now you know, you're
43:13
breaking it because, you know, a new system has occurred.
43:16
Like do you convert to the new system?
43:18
You know people are waiting. So we'll see what happens.
43:21
It's something that's moving fast and we're going to keep
43:24
reporting on it. We have some very rare
43:26
opportunities to report, quote UN quote, breaking news.
43:28
Well, guys, happened about last week.
43:30
I think the solution is, you know, show them the money.
43:33
Yeah, buy more tea. Yeah, we need to.
43:35
We need to support all the farmers who took a very brave
43:38
step into trying to sell their own tea from their own place and
43:43
with a verified provenance. That's right.
43:46
So it's a future we can get very excited about.
43:49
Thank you so much for listening. If you enjoyed this, please
43:51
consider sharing with a friend and we'll see you on the next
43:53
one. See you in the future.