[1] Meeting up at a coffee shop is a cornerstone of modern American life. Business meetings, book clubs, and first dates all pair well with a coffee. But some fast-growing Asian chains and American entrepreneurs are hoping you’ll switch allegiances to a younger rival: bubble tea.
[2] Invented in the 1980s, the hugely popular drink involves milk tea (usually iced) mixed with add-ins such as tapioca pearls or grass jelly, all sipped through a fat straw. Variously known as bubble tea or pearl milk tea, the drink has ‘bubbles’, which refer to the milk froth that occurs after shaking the cup.
[3] The big players in the bubble tea market come from Asia and already have huge presences internationally. While Chatime has over 2,500 stores worldwide, Gong Cha has over 2,000 stores and it adds well over 100 each year, and CoCo Fresh is expanding into South Africa as well as North America.
[4] But while each of these brands has a US presence, neither they nor their newer American rivals have yet to reach anything like Starbucks’ scale. The coffee behemoth has over 13,000 stores in the US alone. Clearly, the US is still very much a coffee country.
[5] Does bubble tea stand a chance? The answer will depend on two things: bureaucracy and the drink itself.
[6] Creating a successful food or drink chain has always been as much a question of organizational infrastructure as final product. Coffee aficionados don’t generally cite Starbucks as their favorite brew; the secret of the chain’s success is a combination of consistency and convenience.
[7] In fact, Italian economist Luigi Zingales says the future belongs to companies with the internal culture and managerial know-how to scale effectively. The term ‘scaling’ might be heard most commonly in Silicon Valley, but it’s not just relevant to IT. “The fact that the major chain of coffee is not Italian is really hurtful,” Zingales joked, “but it was Starbucks that figured out how to bring Italian-style coffee to scale.”
[8] Scaling an organization involves many challenges, but one of the secrets might surprise you: bureaucracy. While we tend to think of that word in purely negative terms, the management and political theorist James Wilson defines the core of bureaucracy as simply making a procedure sufficiently rule-based that it can be executed consistently by far-flung employees. McDonald’s ‘bureaucratized’ burger-making with a 600-page operations manual that carefully regulates every step of the process, enabling the company to open new stores at great speed, with consistent quality, across the world.
[9] And this is exactly what the bubble tea chains have done. A customer enters the store and places an order with a smiling barista. There are clearly-defined options for levels of sugar and levels of ice. The barista repeats the order, which the customer can also view on a tablet screen by the register. The barista then prints off a label and sticks it onto a plastic cup, which is passed to a colleague who prepares the drink. A few minutes later the customer has the drink in hand, exactly as ordered.
[10] We’re so used to this kind of bureaucratized production that often we don’t really think about it, but many dominant American firms attained their position by perfecting the bureaucratic process for their particular product. For example, the Starbucks system famously involves writing the customer’s name on every cup and then checking boxes to express what goes inside. While this sometimes causes trouble for those of us with uncommon names, it allows Starbucks to achieve a level of speed and accuracy that most coffee shops don’t match.
[11] Bubble tea has a number of strengths in the battle against its more established rival. First, aficionados point to its refreshing versatility. “Sometimes it’s a pick-me-up like a smoothie, and other times it’s a caffeine-fix drink like an iced coffee,” said Bin Chen and Andrew Chau, co-founders of a premium bubble tea company in San Francisco and New York. “It lights up your sense of smell and taste. And the tapioca pearls add a whole new dimension of mouthfeel. It’s like drinking with gummy bears.”
[12] What’s more, “not everyone wants the caffeine spike from coffee,” said Chen and Chau. “The caffeine build in tea is much slower, so more people are getting into that.” There’s also a wider range of choices giving customers the
option to rotate their orders more often. “There’s more diversity in tea as each flavor is more pronounced,” added Chen and Chau.
[13] Perhaps the drink’s most distinctive quality is the sensory experience of drinking it. Consumed through a wide plastic straw designed to fit a tapioca pearl roughly half an inch in diameter, the pearls often get stuck in the straw and then rush suddenly into the mouth once released. The texture of the pearls is soft but chewy, while other add-ins such as grass jelly and pudding provide a silkier touch with little resistance. By chance or careful straw placement, the drinker can encounter a distinct series of sensory experiences from a single cup.
[14] However, the sometimes skeptical reactions from first-time bubble tea drinkers raise the possibility that the drink will remain a niche trend. “We would describe our experience of introducing bubble tea to new people as ‘complex’,” said Chen and Chau, the bubble tea entrepreneurs. Ultimately, though, they feel confident that the gaps are bridgeable. “Our mission is to bridge cultures. If anything, milk tea is a European drink,” they argued, “and while tapioca pearls are a bit specific to Asian culture, we all know and love gummy bears.”
[15] Most of the bubble tea chains have made their first moves in the San Francisco Bay area, where there are hundreds of bubble tea stores. And the race to bring bubble tea to the whole of the US has already begun. Each new location will surely find some pre-existing bubble tea fans and plenty of people eager to try something new. But, inevitably, achieving Starbucks scale nationally would require reaching millions of Americans who have no previous history with the drink and are perfectly happy with their daily coffee. That said, perhaps many of those people didn’t enjoy coffee at first taste – it’s a strange, bitter drink, after all, until it becomes a familiar comfort.
[16] Ultimately, whether bubble tea catches on in the US will be a question of taste and trends, and those are always hard to predict. What’s clear is that the business model for scaling bubble tea has already been honed, which could make all the difference between a passing craze and a long-running phenomenon.
COMMENTS
The wolf:
I can’t really explain why I like bubble tea… just give it a try!
Classof75:
They should be made to be more upfront and let us know how many calories are in these unhealthy drinks.
Cosmos girl:
I know some people buy it for that sugary hit. Yet I find it just so sickly sweet.