It is an sudden flip for Chui Shui Tang, the teahouse in Taiwan that claims it pioneered the beverage within the Nineteen Eighties.
Chun Shui Tang began as a conventional teahouse promoting tea leaves — a dime a dozen in Taiwan. However, as Liu Han-Chieh, the teahouse’s founder, came upon, promoting tea was more durable than loving tea.
Talking to Enterprise Insider at his firm’s headquarters within the central Taiwanese metropolis of Taichung, Liu was candid about how the transfer benefited his enterprise.
“In Taiwan, we have to promote tea leaves with a human contact — clients must strive some tea earlier than shopping for tea leaves, so some would simply be chatting for lengthy hours with you over tea however not purchase ultimately,” stated Liu, 72.
Moreover, conventional Chinese language tea consuming entails multiple steps, which might make the sale pitch long-drawn. And when clients lastly do commit to purchasing a bag of tea leaves, they may brew it for weeks.
It is simply not the easiest way to earn money.
From chilled tea to boba milk tea
Impressed by iced espresso on a visit to Japan within the early 80s, Liu went residence with the concept for a hand-shaken iced tea — a daring transfer for the teahouse on the time, as chilly tea was usually solely served at road meals stands, he stated.
Quickly, Lin Hsiu-hui, a younger staffer who was managing gross sales of chilled tea on the teahouse, was outselling his conventional scorching choices.
“With iced tea, you’ll be able to promote to anybody from three years previous to 80 years previous. With scorching tea, you’ll be able to solely promote to previous folks,” stated Liu.
Huileng Tan/Enterprise Insider
It additionally helped that the youthful buyer base would purchase one cup of ready-made chilled tea a day as a substitute of 1 bag of tea leaves a month.
Liu knew he had stumbled upon a winner.
Liu instructed Lin, who’s now the R&D director at Chun Shui Tang, to experiment with including new components to tea.
Lin stated she merely added her favourite childhood Taiwanese dessert deal with — chewy tapioca balls — to take advantage of tea. Liu coined the time period “pearls” for the topping as a result of they reminded him of black pearls.
Liu likened the evolution of his tea choices to espresso large Starbucks, which was based in 1971 and began out promoting espresso beans. Now, Starbucks sells all the things from drinks to meals, espresso mugs, and merchandise.
Liu’s daughter, Angela — who’s now Chun Shui Tang’s managing director — acknowledged she would love the Taiwanese tea chain to be like Starbucks is to espresso.
Nevertheless it has an extended strategy to go: The tea firm has over 200 retailers globally, in comparison with Starbucks’ depend of more than 38,000.
And Liu, the teahouse’s founder, does not look like in a rush to increase. He stated he is eager on taking a longer-term strategy to rising Chun Shui Tang. He is additionally not in search of exterior funding.
“It is a enterprise that may be sustained for a very long time. Tea has been round for the final 5,000 years, so it is a long-term sport,” he stated.
A controversial begin turns into a world phenomenon
Chun Shui Tang’s declare about being the founding father of boba tea is not with out controversy.
A teahouse known as Hanlin Tea Room within the southern metropolis of Tainan additionally claims to have invented the beverage across the similar time after Tu Tsung-ho, its late founder, noticed white tapioca balls at a market. Hanlin Tea Room didn’t reply to a request for remark from BI.
The two companies were embroiled in a bitter lawsuit spanning 10 years. The courtroom ultimately didn’t rule in both firm’s favor, as neither filed a patent or trademark safety.
In the meantime, pearl milk tea and its many iterations have been popping up in and outdoors of Taiwan all of the whereas. Immediately, the trade is estimated to be worth billions globally.
Now a world cultural phenomenon and an emblem of Taiwanese identification, the proliferation of boba tea underscores the island’s gentle energy in an period when information always revolves round navy threats from China, which claims Taiwan as its territory.
Immediately, boba tea will be simply discovered within the US — a far cry from when Liu’s daughter, Angela, was finding out at Purdue College within the US some 15 years in the past.
Huileng Tan/ Enterprise Insider
On the time, Liu needed to get her tea leaves and pearls shipped to her. Now, Taiwanese government data present exports of tapioca and substitutes — which incorporates tapioca balls — to the US by tonnage greater than doubled within the 5 years to 2023.
In an indication that just about each drink can now be boba-fied, Starbucks has a tackle boba too, with raspberry pearls and a summer season berries combination. None of Starbucks’ boba drinks include tea.
Chun Shui Tang’s executives seem unperturbed by the various shapes and types boba tea takes today — Heinz ketchup boba tea, anybody? — as a result of they’ve already been there and completed that.
In 2008, Chun Shui Tang launched a boba tea hot pot with a savory tea-infused broth. They’ve additionally experimented with a boba tea-infused cheese tart and with recipes that incorporate herbs.
Whereas such out-of-this-world creations are good for buzz, clients nonetheless usually want drinks that don’t “defy widespread sense,” stated Liu.
Father of the teahouse founder refused to talk with him for 3 years
Liu comes from a household of physicians.
His father, a medical physician, minimize a stern determine — besides when he was consuming tea.
“I used to be 5 after I noticed that my father was smiling solely when consuming tea, so I believed, ‘Tea can actually make somebody completely satisfied,'” stated Liu.
Liu wasn’t minimize out for medical faculty, and after a couple of years in a company job, he began his tea enterprise on the age of 30. His father was supportive and gifted him a teapot, pondering he would do a “correct job” operating the enterprise.
Upon studying that his son launched a calming tea beverage and was including new-fangled toppings to a conventional beverage, the doctor hit the roof.
“He thought I used to be playing around,” stated Liu.
Liu’s father refused to talk to him for 3 years — till Liu lastly confirmed up on the elder man’s door with convincing gross sales figures and a shiny new automotive.
He nonetheless retains the teapot his father gifted near him within the workplace to remind him of his first supporter.
Huileng Tan/Enterprise Insider
Chun Shui Tang OG store in Taichung is a vacationer hotspot
Immediately, Liu’s OG Chun Shui Tang teahouse in Taichung is on many vacationers’ checklists.
There wasn’t a lot exercise across the space in late June when BI visited the store. It is positioned on an unassuming road with an attire store, a legislation agency, and a tutoring middle.
However Chun Shui Tang had a gentle stream of vacationers heading to its store fronted by a putting blue tiled roof.
Not like most boba tea retailers right this moment, the place clients take out their drinks, Chun Shui Tang nonetheless retains its authentic genteel teahouse factor the place clients may dine in — and most do.
There’s additionally rather more than boba tea on its menu. Clients can order meals together with noodles, varied aspect dishes, and breakfast toast. Additionally they nonetheless serve conventional Chinese language tea.
Mark Anthony Villones, a vacationer from the Philippines, was on the retailer when BI visited. He informed BI he didn’t fairly count on to see a sit-in eating idea the place clients may order greater than snacks.
Similar to different vacationers BI spoke to, Villones stated he was merely there “to strive the unique bubble tea” with a gaggle of buddies throughout a vacation to Taiwan.
Kayne Sy
His pal, Kayne Sy, stated she discovered the teahouse and boba tea — served in a tall cocktail glass — “very nice,” however wasn’t blown over.
Her feedback sum up one among Chun Shui Tang’s largest challenges: a really crowded market.
The competitors is hard amid fierce competitors from China
Chun Shui Tang might be up for a tricky struggle within the world boba tea market.
Whereas Chun Shui Tang is a well-recognized identify in Taiwan, it — alongside its youthful model, TP Tea — just isn’t probably the most recognizable model globally.
“These days, there are increasingly chain bubble tea operations in China which have ambitions to go abroad to increase their world footprint,” Jason Yu, the Larger China managing director at Kantar Worldpanel, a shopper analysis group, informed BI.
A number of the mainland chains — reminiscent of Central China-based Mixue — are additionally backed by enterprise capital cash, making the competitors particularly stiff — because the working mannequin is well replicated and scalable, he added.
Aly Tune/Reuters
“Taiwan’s bubble tea retailers are doing effectively in Taiwan, however they’re in all probability not increasing as quick as their Chinese language counterparts,” stated Yu.
As for Taiwanese corporations’ clout as the primary to invent the product, Yu stated he is not positive that is sufficient to make them frontrunners within the world race.
“It helps with storytelling, nevertheless it’s not sufficient,” stated Yu. “Being the unique can provide you a couple of marks, nevertheless it’s by no means the entire thing. It is actually in regards to the model, it is in regards to the product, it is in regards to the provide chain.”
In spite of everything, fashionable espresso tradition was popularized by the Italians — nevertheless it’s Starbucks from the US that has grow to be an enormous world phenomenon, Yu stated.
Chun Shui Tang founder Liu stated he is not apprehensive in regards to the competitors, as a result of the market is sufficiently big for everybody.
In spite of everything, his tea enterprise has solely gotten higher, not worse with extra rivals — as a result of it is by means of them that they find out about boba tea and his pioneer Taiwanese model, he stated.
“They’re our helpers, not our rivals,” stated Liu.
