Bubble Tea Industry is Expected to Increase at a 6.5% of CAGR by 2032

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Table of Content

The bubble tea industry revenue was valued at US$ 3.27 billion in 2022 and is anticipated to reach US$ 6.14 billion by 2032. The market is expected to increase at a compound annual growth rate (CAGR) of 6.5% between 2023 and 2032.

The bubble tea industry growth is driven by the growing consumption of tea and coffee as nootropic drinks among students and the working class population, growth in health consciousness and increase in adoption of healthy beverages such as green tea, black tea and others, increasing cardiovascular disease, and the growing popularity in developing nation.

Industry Overview:

Bubble tea is a Taiwanese tea-based beverage that was developed in Tainan and Taichung during the 1980s. It is also known as pearl milk tea, bubble milk tea, boba juice, boba tea, or boba. The majority of recipes for bubble tea start with a tea foundation that has been combined with the organic product or milk; chewy custard spheres (also referred to as air pockets, pearls, or boba) and organic product jam are then frequently added. Typically, organic product or syrup is added to ice-mixed forms to create a bubbling substance. There are many variations of the beverage with a broad range of ingredients. Bubble milk tea with custard and air pocket milk green tea with custard are the two assortments that come in the most different flavors. While established countries like the U.S., Canada, and Germany have a very wide variety of bubble tea, emerging nations like China, Brazil, and India are catching up quickly. 

Bubble Tea Industry Report Scope:

Report Highlights:

• By product, the black tea segment is expected to dominate the industry during the forecast period. Black tea's growth is attributed to its intense fragrance and authentic natural flavor. Additionally, black tea helps to improve digestive health, lower blood sugar, and lower harmful cholesterol. Additionally, it's an excellent provider of vitamins. Over 150 million people consume tea daily in the United States, with black tea making up 82% of all tea consumption, according to research done by the Tea Association of the United States. On the other hand, the green tea segment is expected to grow at the fastest CAGR over the forecast period. Increased awareness of green tea's health benefits is what has caused its popularity to grow. The most consumed liquid on earth is tea, which has a variety of uses. For years, tea manufacturers have experimented with this enticing aroma, offering customers a variety of tastes, including oolong tea and green tea. Thus, driving the segment growth over the forecast period.
• By component, the flavor segment is expected to grow at the highest CAGR during the forecast period. Consumers have become interested in bubble tea's flavor because of its distinctive look, packing, and tapioca pearls; typically, operators prefer to flavor bubble tea with flavored syrups, powders, or purees, or with fresh fruits. Bubble tea gets fruit flavors to give it a sweet, tangy, and vibrant flavor. Due to the beverage's development, industry participants have begun enhancing bubble tea with sophisticated flavors like flavored latte or Japanese matcha. Besides, the sweetener segment is expected to capture a significant industry share during the forecast period. In order to improve the flavor of the bubble tea without using real sugar, sweetener is added to it. Even some sugars give bubble tea more viscosity and content. As customers become more conscious of their calorie intake, substituting sweeteners for sugar can reduce their consumption considerably.

Regional Insights:

The Asia Pacific is expected to dominate the industry during the forecast period. The regional growth is attributed to the high production and consumption of numerous types of tea such as green tea, black tea and oolong tea. On the other hand, North America is expected to grow at the fastest rate during the forecast period. In Taiwan, pearl milk tea, bubble tea, and zhenzhu naicha boba tea are all essentially the same beverage. Names differ based on location as well as individual preference. In the US, East Coasters favour bubble tea over West Coasters' boba.

Vegetarians can rest easy knowing that no gelatin is used in the production of boba pearls because tapioca starch, which originates from the cassava plant, is used instead. Over 150 million people in the US enjoy tea daily, with black tea making up 82 percent of all tea consumed, according to research done by the Tea Association of the United States. An estimated 3.8 billion gallons of tea were consumed in the United States in 2016, with black tea accounting for 80% of that amount, green tea coming in second place with 16%, and oolong tea, white tea, and dark tea making up the remaining 4%, according to data from the United States Food and Agriculture Organization. (FAO). With about 80% of families engaging in tea drinking, the United States is the fourth-largest tea importer in the world, according to the Food and Agricultural Organization of the United Nations.

Industry Dynamics:

Drivers:

Availability of broad range of flavors

Around the globe, people refer to bubble tea by the names bubble milk tea, boba juice, boba tea, or pearl tea. Pearl milk tea, also referred to as bubble tea, is made with traditional tea components and chewy tapioca pearls. Bubble tea is available in a range of varieties, including peach, plum, mango, passion fruit, coffee, chocolate, and strawberry, depending on the flavor of the tapioca starch spheres. Leading firms in the bubble tea industry are also concentrating on launching new products in order to gain industry dominance. For instance, BossenStore.com launched exploding Boba Pure25 in 2017, a vegetarian, cholesterol-, fat-, sodium-, low-calorie, and calorie-free exploding boba with flavors like strawberry, mango, lychee, kiwi, blueberry, and passion fruit. Thus, increased product launches will therefore probably spur industry expansion.

Restraint:

Health related issues having the intake of high sugar

Due to its many varieties, eye-catching colors, and various bobas, bubble tea is becoming more and more well-liked. On the other hand, bubble tea contains a lot of fatty lipids and is very high in sugar. There aren't many calories in the crunchy tapioca spheres. Studies show that 1.1 ounces of raw pearls have 68 calories per serving; however, when tapioca spheres are soaked in a condensed milk and sugar combination, their calorie content increases, possibly hindering industry development. One cup of bubble tea typically contains 34 grammes of sugar or nearly 68% of the daily allowance advised by the World Health Organization.

The flavour and mouthfeel of bubble tea are enhanced by the use of trans-fats. Trans-fats are detrimental to one's health because they, among other things, increase the chance of heart disease, diabetes, and stroke, reduce HDL cholesterol and elevate LDL cholesterol, which is bad cholesterol. They also affect cognitive and reproductive function. These health hazards are therefore anticipated to restrain the growth of the bubble tea industry over the forecast timeframe.

Opportunities:

Increasing awareness regarding health benefits 

Consumers are turning to sugar substitutes like stevia, agave, and honey, which have been associated with high sugar consumption, as a result of obesity and diabetes. These are the sugar substitutes or sugar substitute alternatives used in boba tea. Due to their antioxidant, anti-inflammatory, and anti-carcinogenic qualities, natural sugars are favored by diabetics and health-conscious individuals over sugar. As a result, many tea manufacturers are concentrating on making healthy beverages with fewer calories and fats. Many companies are even using taglines to advertise their goods, highlighting the antioxidant and anti-inflammatory properties of their bubble tea. To expose consumers to a variety of flavors and entice them to develop a bubble tea habit over time, it is frequently offered at a low price. To appeal to new industrys, many people flavor their bubble tea with fruits and sweets.

Recent Developments: 

• In January 2023, the beverage business BobaBam, headquartered in Los Angeles, introduced two new flavors: milk tea and taro. The business is introducing these variety packs at more than 200 sites all along the West Coast and Northeast. Every one of their immaculate flavor packs is 100 percent nut-free, vegan, non-GMO, and gluten-free.

Major Key Players:

• Chatime Group
• Gong Cha
• Yummy Towns Holdings Corporationis 
• K.O.I The Co. Ltd
• Bobabox Ltd.
• T Bun International 
• Troika J C
• Fokus Inc
• Lollicup USA Inc.
• The Bubble Tea Company
• Ten Ren’s Tea Time
• Bubble Tea House Company
• Cuppotee

Market Segmentation:

By Product

• Black Tea
• Green Tea
• Oolong Tea
• White Tea

By Component

• Liquid
• Flavor
• Creamer
• Sweetener
• Others

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