Written by Hanzhang Qin
From Gong Cha and Jasmine to Moge Tea, boba has established itself as one of the favorite beverages among Ann Arbor community members. Originating in Taiwan during the 1980s, boba tea, often referred to as “bubble tea” or “pearl milk tea,” blends sweet milk tea with chewy tapioca pearls (Wei, 2023). This delightful combination offers both a refreshing drink and a unique texture, making it a dual-sensory experience. The market appears highly profitable: Remi estimates that an average Gong Cha franchise yields annual profits of $45,000 (Remi, 2023). Over the decades, its popularity has soared across the globe, from Asia to North America. Given its foreign roots, how did boba manage to outshine numerous beverages and make such a triumphant entry into the U.S. market?
According to Krishna, the history of boba tea could be traced back to the late ’80s. There are various claims about the country of origin of milk tea, but the mainstream consensus is that milk tea originated in Tibet, China. It was an everyday drink for the nomadic tribes of the Mongolian plateau, with Mongolian milk tea being the most authentic. It was here that milk and tea were first combined, giving birth to the earliest form of milk tea. With the development of the Silk Road, milk tea made its way to India and, after several iterations, was introduced to Western countries. This led to the creation of Dutch-style milk tea and English milk tea. In modern times, Dutch milk tea was brought to Taiwan and, after local adaptations, evolved into what’s known as pearl milk tea. From the 1960s to the 1980s, with the influx of Taiwanese immigrants to the U.S., pearl milk tea began its American journey, primarily as a niche offering in small family-run shops. By around 2010, major brands like Coco and Gong Cha expanded rapidly into the U.S. market, capturing significant market share. However, it was the 2013 viral “Bobalife” song on YouTube that pushed boba into the American mainstream. Second-generation immigrant tea shops, such as Brown Sugar and Tiger Sugar, later emerged, reshaping perceptions by emphasizing quality and reflecting the evolving Chinese-American community’s aspirations and growth.
Now, how boba entered the US market is clear, but how exactly did boba become so popular? Analysis of the demand for boba gave us the answer. Baer-Sinnott mentioned that given the rich immigrant history of our country, Oldways (a food and nutrition nonprofit organization) had developed five distinct cultural frameworks for nutritious diets over time: Mediterranean, Asian, Latin American, Vegetarian/Vegan, and African Heritage Pyramids, recognizing that a singular approach is not suitable for everyone (Baer-Sinnott, n.d.). Boba has transcended its role as just a beverage to become a symbol of tradition and identity within the Asian-American community. Its popularity in Michigan and other parts of the U.S. is a testament to its cultural significance. For individuals of Asian heritage, boba acts as a connector to their culture and to each other, fostering a shared identity that is celebrated in both physical spaces and online communities (Cao, 2019). The increasing number of boba shops corresponds with the growth of the Asian-American population, underscoring the drink’s importance as a cultural touchstone and its potential as a cornerstone of the modern Asian-American identity. According to research from IBISWorld, the number of bubble tea shops in the US has reached 3,096 as of 2022, marking a substantial increase of 23.4% from the previous year, with the upward trend appearing to continue unabated.
In the United States, where multicultural food traditions are celebrated, boba tea emerges as an enticing alternative to coffee drinks, capturing the curiosity and palate of young American teenagers. Ren, a columnist for Bloomberg Opinion, highlighted in her boba market analysis that a 2021 CLSA consumer survey astonishingly found 94% of individuals aged between 20 and 29 had bought boba tea in the preceding three months, a trend that persisted even amidst the pandemic. (Ren, 2021). Boba has a strong appeal among younger demographics, who are often more open to trying new and different food trends. Its sweet taste and fun appeal of ‘eating your drink’ make it popular among children, teens, and young adults.
In addition, For individuals who are sensitive to caffeine, allergic, or simply wish to avoid the large amounts of caffeine found in coffee, boba shops provide a welcoming alternative. Through my informal survey of 15 local friends, from freshmen to seniors, an overwhelming majority (13 out of 15) confirmed their regular indulgence in milk tea. Even more telling is that 10 of these enthusiasts regard boba as their go-to alternative to coffee, citing it as gentler on the stomach and a lighter lift for their digestion. These findings echo the national trend where boba has not just found a niche; it has carved out a significant space in the beverage industry. It caters to the increasing demand for diverse and inclusive gastronomic experiences and underscores a shift towards drinks that combine leisure with lower caffeine content and a soft cultural embrace. The variety of boba drinks includes many options with lower caffeine content, such as fruit teas and caffeine-free milk teas, catering to those who still want a social beverage experience without the stimulant effects. “For every cup of bubble tea, there is about 30 to 40 mg of caffeine, whereas 1 cup of coffee has up to 150 mg of caffeine (Leey, 2022).” This makes boba shops inclusive spaces for socializing, studying, or relaxing, much like traditional coffee shops, but with a broader appeal for those looking for non-caffeinated or less-caffeinated beverages.
Upon closer examination of the triumphs of franchises such as Gong Cha, as delineated by industry analyses, it becomes abundantly clear that boba transcends the simplicity of a mere beverage; it represents a commercially viable commodity. This characteristic has been a significant factor in its burgeoning popularity, with an influx of new market players who have recognized and capitalized on the enticing profitability of boba. The reported annual profits from a single Gong Cha outlet, with an EBITDA margin of 15%, underscore the financial viability of boba in the competitive beverage market (Remi, 2023). As with any consumable good, the profit margin plays a pivotal role in its proliferation. Boba’s cost-effectiveness is a testament to this, where a 16oz cup of taro bubble milk tea costs an establishment roughly 64 cents to make, thanks to modestly priced ingredients like bubble tea powder, tapioca pearls, and green tea leaves, including the expense of branded packaging (Espina, 2022). This cost is significantly lower than that of its caffeinated counterpart, the coffee latte, which stands at 89 cents for the same volume — a figure that considers all constituents from the cup to the espresso shot (Beals, n.d.). Despite this, boba often commands a higher retail price than a latte, highlighting a notable discrepancy that opens up a wider margin for profit.
In conclusion, the boba phenomenon encapsulates more than just a trend; it’s a cultural wave that has gracefully found its shore in the U.S. market, bringing with it a rich history and a promise of communal identity. Boba tea’s ascent in the American beverage scene is a testament to the nation’s melting pot ethos, reflecting how diverse cultural products can find widespread acceptance and success. With a combination of strategic market positioning, community engagement, and an inherent appeal to the younger, diverse generation, boba has not only quenched thirst but has also stirred a profitable niche in the competitive beverage industry. As it stands, boba isn’t just a drink; it’s a cultural icon, a profitable venture, and a vibrant addition to America’s culinary landscape. The story of boba is far from complete, and its continued evolution will likely serve as a barometer for the changing tastes and demographics of the American consumer.
Works Cited
Baer-Sinnott, S. (n.d.). Food is a window to cultural diversity | U.S. news – US news health. https://health.usnews.com/health-news/blogs/eat-run/articles/food-is-a-window-to-cultural-diversity
Beals, J. (n.d.). The latte example: Figuring Out Your Food Costs. The Latte Example: Figuring Out Your Food Costs. https://www.espresso-services.com/espresso-blog/the-latte-example-figuring-out-your-food-costs
Cao, S. (2019, May 24). Guest column: Boba as Asian-American identity. Tostada Magazine. https://tostadamagazine.com/2019/05/24/guest-column-boba-as-asian-american-identity/
Espina, D. (2022, July 28). How much does it cost to make a Cup of bubble tea? – BubbleTeaology. https://www.bubbleteaology.com/how-much-does-it-cost-to-make-a-cup-of-bubble-tea/
Felix, J., & Trisha. (2023, August 17). Bubble tea consumer demographics: Know your market. Pearl Lemon Boba. https://pearllemonboba.com/bubble-tea-consumer-demographics/
IBISWorld – industry market research, reports, and statistics. IBISWorld Industry Reports. (n.d.). https://www.ibisworld.com/industry-statistics/number-of-businesses/bubble-tea-shops-united-states/
Krishna, P. (2017, June 6). A brief history of boba. Food & Wine. https://www.foodandwine.com/origins-of-boba-tea-6406857
Leey, V. (2022, June 24). Bubble tea – your new alternative to coffee. Square Bubbles. https://www.squarebubbles.uk/blogs/news/bubble-tea-your-new-alternative-to-coffee
Remi. (2023, June 5). Should you invest $378k in a Gong Cha franchise?. SharpSheets. https://sharpsheets.io/blog/gong-cha-franchises-costs-profits/
Ren, S. (2021, June 24). Luckin coffee failed to convert China to coffee. now bubble tea wants a chance. Bloomberg.com. https://www.bloomberg.com/opinion/articles/2021-06-24/luckin-coffee-failed-to-convert-china-to-coffee-now-bubble-tea-wants-a-chance?srnd=premium&sref=pqQBM94V#xj4y7vzkg
Wei, C. (2023, October 3). What is Boba Tea, Taiwan’s iconic drink? Travel. https://www.nationalgeographic.com/travel/article/what-is-boba-bubble-tea-taiwan