The Pearl Tea
Industry…
“New & Delicious”
David Chong
Maria Reynoso
Keith Caranalli
February 11, 2003
Csc 110 Pietsch
Introduction
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Throughout the entire world, various cultures personalize food according to their
perspectives of taste preferences and health. For example, while curry and spices are
widely accepted in India, the Chinese race prefers mildly bland flavors in their food.
Many historical events have contributed many positive effects on acknowledging certain
beverages and food. The Boston Tea Party in 1773 changed the history of the United
States in many aspects. Standing for our independence over atrocious taxes inclined
Americans to dump several pounds of tea into Boston Harbor. Tea is a popular drink all
around the world, however the trend has only begun in the last forty years by a portion of
health conscious Americans. Currently, most Americans drink twice as much coffee as
they do tea. Coffee shops, like Starbucks, offer a huge selection of coffee to
choose from, serving consumers around metropolitan and suburban cities.
While tea is offered as an option, the majority of sales are incurred from both warm and
cold coffee beverages. Coffee has turned into an irreplaceable, addictive drug for many
of the Americans who are surrounded by coffee in the workplace and at home. Many
Americans are unaware of the special antioxidants comprised in tea that can help prevent
many types of cancers while promoting other health benefits.
Chinese people associate tea with everyday life, as Americans do for coffee.
They drink it throughout the day and usually during many meals. During the late 1980’s
in Taiwan, a recent college drop-out decided to experiment with a Chinese dessert that he
enjoyed, which is also a widely accepted drink in his nation: Tea. His creative nature
inspired him to separate his favorite part of the desert, the tapioca pearls, and put them
into his favorite drinks. The drinks are primarily tea based containing fruit extract and
these chewy, marble sized, tapioca balls. This is how pearl tea or “boba” originated
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A magnificent, new innovation of pearl tea took off in Taiwan and soon spread
throughout other Asian nations, including mainland China, Singapore, Japan, and Korea.
During the mid 1990’s, this drink craze made its way to the United States, especially in
large metropolitan areas with high concentrations of Asian residents. San Francisco,
New York, and Los Angeles were among the first major cities to accept pearl tea.
The drinks have become very popular to not only Asians anymore, but to
Americans as well. The drink can be considered a combination of Jamba Juice and
Starbucks with an Oriental twist. It extracts the idea of Jamba Juice’s
nutrients, flavors and vibrant colors while maintaining Starbuck’s relax and
intricate business environment.
The new Asian tea house approach is becoming
exploited by Americans around the country because it offers something new and diverse.
It has drawn a commonality that both cultures can appreciate and enjoy while achieving
health advantages.
Understanding the industry, competitors and the drink itself is
imperative in comprehending why this revolutionary drink has had such success in
America. The new Asian Drink Phenomenon, “Pearl Tea,” through its penetration
of the American market; has bridged a gap between the Asian and American
consumers.
Drink Description
Pearl tea has many other names: boba, bubble tea, QQ drinks, or tapioca tea. The
original drinks were from various types of teas. These days, tea, coffee, and exotic fruit
flavored drinks are all quite popular. Typical pearl drinks consist of tea, water, fruit
flavoring, sugar, creamer, ice, and the distinctive pearls. These “pearls” called Boba are
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the size of marbles having a sticky, slimy texture and are black. Like tapioca, boba
comes from the starchy root of the tropical cassava plant. Boba has essentially no flavor
of its own, and the syrup coating adds little flavor just keeps the balls from congealing
into one colossal clump. The beverages are served in clear cups, allowing
their vibrant colors to be exposed and comes with a wide straws that allows
the pearls to come through them in each gulp. Each drink is freshly made to
precision and customized to each customer’s desires in their presence. The
beverages do not contain preservatives, or other harmful products. Some of
the appeal in this industry is the showmanship and skillful display of the art of drinkmaking.
Advancements in technology have made this show even more appealing,
including electric drink shakers and automatic lid sealer machines which melt a thin layer
of plastic over the top of the drink, allowing for easy transport, to be punctured by an
angle-cut straw when ready to be enjoyed.
Pearl tea is not only a drink, but a small snack as well. The tapioca starch that the
pearls are made out of, contain carbohydrates that can suppress the natural hunger pangs
of an average person. The pearls are what make the drink so exclusive, acting as texture
component, giving the drink a special personality. This innovative refreshment has
transformed the drink industry, presenting a competent competitor who has transformed a
drink into a small meal too.
Industry
Pearl tea is often sold at small cafés or establishments that serve other items.
Rarely will one find a store dedicated to selling only pearl tea. Some shops will serve
lunch plates, ice cream, candy, or other convenience goods.
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When the pearl tea concept came to the USA, the style and recipes were adapted
to fit the American market.
Some of the more
popular flavors in Asia were not successful in the US.
American consumers were not ready for tastes like
peanut, taro, red bean, green bean, and star fruit.
More popular flavors for the western market emerged, such as honeydew, mango,
strawberry, and peach. When the entire industry, like many others, expanded to a foreign
market, it had to adapt to the customer preferences of that new market. The image of
pearl tea houses needed to uphold things that Americans prized when looking for
beverage establishments. Friendly customer service, cleanliness and a unique atmosphere
are present in most successful pearl tea shops.
Tapioca Tea house was recently opened in Berkeley, California near the UC
Berkeley campus. Since Dave’s Uncle happens to be one of the partners in the operation,
he participated in this project by giving us a tally of how many drinks were sold. We
worked together in putting a spread sheet together with corresponding graphs.
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Competition
Pearl Tea has a diverse group of competitors. Starbucks is a core competitor
since both companies serve customers who want fashionable refreshments that are tasty
and of high-quality. While Starbucks uses its brand loyalty and caffeine to sustain sales,
the pearl tea industry endorses its creative refreshment and unique drink environment.
Using Jamba Juice’s health purpose approach, it clearly markets to all health conscious
enthusiasts. This naturally extends to the entire smoothie industry.
Selling in America
Tapioca Express one of the largest pearl tea franchises in the United States who
opened its first store four years ago in Alhambra, California. Since then, more than forty
stores have been started from Davis to San Diego and even in
large cities like Houston, New York and Colorado. Tapioca Express has more than half
of the market share in the pearl tea industry and is continually growing at a steady rate
with goals to have a hundred stores by 2004. Wayne Lin, CEO of Tapioca Express, is the
one responsible for this successful enterprise that has pierced the American market. Lin
saw a market for these drinks and capitalized on it by utilizing both American and
Chinese resources. While many of the customers that come through his franchises are
typically of Asian decent, more and more Americans are catching on to this new trendy
drink. Lin targets high school and college students and other pearl tea enthusiasts of all
ages. From the stylish ways these cafés are set up to the nutrients inside each drink; pearl
tea has added a formidable competitor in the drink industry. While coffee has been
transformed into milk shakes, ice cream and candy bars, tea is now complimented with
boba, sharing adaptable characteristics due to pearl tea. Offering boba with a variety of
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tea based drinks is one option, whereas transforming its form into a snow cone (called
Snow Bubble) is just another one of the many ways to prepare pearl tea. Lin has
discovered a way to bring the life and enthusiasm back into ordinary plain tea that many
Americans are unfamiliar with, yet appreciate. With this industry growing exponentially,
many new exclusive drinks are destined to be developed in the near future. With more
and more Americans becoming mutually enlightened and astonished by this new
refreshment, the drift of these drinks are spreading everywhere.
On April 22, 2002, Lucy’s Juice the local on campus smoothie shop began selling
pearl tea. Before this time, pearl drinks were not sold anywhere else locally. However,
after this landmark day, Lucy’s began selling a large menu of blended drinks along with
their new special: pearl tea. This date was a great day for the pearl tea industry because it
began to position its business model towards Americans. It’s true that the Asian ethnicity
makes up the largest minority; however, in relation to the rest of the school less than
fifteen percent of the student body is Asian. We believe that Lucy saw the demand for
these drinks, jumped on the bandwagon, and integrated them into their menu, promoting
diversification. Lucy’s target market was clearly Americans who had no idea what this
drink was and was tired of the typical fruit of coffee smoothie. Lucy’s aimed to be the
cohesive bond that tied the American and Asian culture of drinks together.
Conclusion
Pearl Tea has revolutionized the drink business in America bringing a diverse
group together that can enjoy this innovative drink. While many stores are placing this
drink onto their menus it is giving one more option to consumers whose desire is to try
something new. Many large franchises now like Starbucks are looking
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at endorsing this product, but are waiting for the market reaction of consumers to see
whether this drink craze is only a fad or something here to stay. We believe that pearl tea
is something that will not go away for a long time as long as more and more Americans
and non Asians learn about this savvy drink. It has brought the typical hot or iced tea to
unbelievable heights.