Meet the Taiwanese Family Behind the Global Boba Tea Craze

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 have to 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,” mentioned Liu, 72.

Moreover, conventional Chinese language tea consuming includes a number of steps, which might make the sale pitch long-drawn. And when clients lastly do commit to purchasing a bag of tea leaves, they might brew it for weeks.

It is simply not one of the best ways to generate income.

From chilled tea to boba milk tea

Impressed by iced espresso on a visit to Japan within the early 80s, Liu went dwelling with the thought for a hand-shaken iced tea — a daring transfer for the teahouse on the time, as chilly tea was usually solely served at avenue meals stands, he mentioned.

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“With iced tea, you’ll be able to promote to anybody from three years outdated to 80 years outdated. With scorching tea, you’ll be able to solely promote to outdated folks,” mentioned Liu.

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 substances to tea.

Lin mentioned she merely added her favourite childhood Taiwanese dessert deal with — chewy tapioca balls — to exploit 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 every part 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.

But it surely has a protracted option to go: The tea firm has over 200 retailers globally, in comparison with Starbucks’ depend of greater than 38,000.

And Liu, the teahouse’s founder, does not look like in a rush to develop. He mentioned he is eager on taking a longer-term strategy to rising Chun Shui Tang. He is additionally not searching for 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 mentioned.

A controversial begin turns into a worldwide 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 identical 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 2 corporations had been embroiled in a bitter lawsuit spanning 10 years. The court docket 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 had been popping up in and outdoors of Taiwan all of the whereas. Right now, the trade is estimated to be price billions globally.

Now a worldwide cultural phenomenon and an emblem of Taiwanese identification, the proliferation of boba tea underscores the island’s mushy energy in an period when information continually revolves round navy threats from China, which claims Taiwan as its territory.

Right now, boba tea might be simply discovered within the US — a far cry from when Liu’s daughter, Angela, was learning at Purdue College within the US some 15 years in the past.

On the time, Liu needed to get her tea leaves and pearls shipped to her. Now, Taiwanese authorities information 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 time berries combination. None of Starbucks’ boba drinks include tea.

Chun Shui Tang’s executives seem unperturbed by the various shapes and varieties boba tea takes today — Heinz ketchup boba tea, anybody? — as a result of they’ve already been there and executed that.

In 2008, Chun Shui Tang launched a boba tea scorching 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 favor drinks that don’t “defy frequent sense,” mentioned 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, reduce 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 happy,'” mentioned Liu.

Liu wasn’t reduce out for medical college, 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, considering he would do a “correct job” working the enterprise.

Upon studying that his son launched a relaxing 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,” mentioned 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 automobile.

He nonetheless retains the teapot his father gifted near him within the workplace to remind him of his first supporter.

Chun Shui Tang OG store in Taichung is a vacationer hotspot

Right now, 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 situated on an unassuming avenue with an attire store, a regulation 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 now, the place clients take out their drinks, Chun Shui Tang nonetheless retains its authentic genteel teahouse factor the place clients might dine in — and most do.

There’s additionally rather more than boba tea on its menu. Clients can order meals together with noodles, varied facet 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 advised BI he didn’t fairly anticipate to see a sit-in eating idea the place clients might order greater than snacks.

Identical to different vacationers BI spoke to, Villones mentioned he was merely there “to strive the unique bubble tea” with a gaggle of mates throughout a vacation to Taiwan.

His pal, Kayne Sy, mentioned 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 in all Chun Shui Tang’s largest challenges: a really crowded market.

The competitors is hard amid fierce competitors from China

Chun Shui Tang will likely be up for a troublesome battle within the international boba tea market.

Whereas Chun Shui Tang is a well-known identify in Taiwan, it — alongside its youthful model, TP Tea — just isn’t essentially the most recognizable model globally.

“These days, there are increasingly more chain bubble tea operations in China which have ambitions to go abroad to develop their international footprint,” Jason Yu, the Larger China managing director at Kantar Worldpanel, a client analysis group, advised 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 definitely replicated and scalable, he added.

“Taiwan’s bubble tea retailers are doing effectively in Taiwan, however they’re most likely not increasing as quick as their Chinese language counterparts,” mentioned Yu.

As for Taiwanese companies’ clout as the primary to invent the product, Yu mentioned he is not certain that is sufficient to make them frontrunners within the international race.

“It helps with storytelling, nevertheless it’s not sufficient,” mentioned Yu. “Being the unique may give you a couple of marks, nevertheless it’s by no means the entire thing. It is actually concerning the model, it is concerning the product, it is concerning the provide chain.”

In any case, trendy espresso tradition was popularized by the Italians — nevertheless it’s Starbucks from the US that has grow to be an enormous international phenomenon, Yu mentioned.

Chun Shui Tang founder Liu mentioned he is not fearful concerning the competitors, as a result of the market is sufficiently big for everybody.

In any case, his tea enterprise has solely gotten higher, not worse with extra rivals — as a result of it is via them that they study boba tea and his pioneer Taiwanese model, he mentioned.

“They’re our helpers, not our rivals,” mentioned Liu.