The Booming Business of Bubble Tea

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Bubble tea is the hottest food & beverage category of the modern age and has been growing non-stop across the West since the early 2010s. Unlike past fads, bubble tea has established its staying power as both a product and business. Bubble tea was introduced in the U.S in the 90s by Quickly and Tapioca Express. Starbucks, Dunkin, and Jamba Juice had shown how to snowball momentum from a single store into a franchise empire.

New brands like Gong Cha and Happy Lemon emerged across Asia, looking to replicate that success in boba. By the 2010s, competition had intensified across China and Taiwan with each new entrant adding their own spin. But as legacy coffee giants have stagnated and Asian-American culture has grown, bubble tea in the United States has become a gold rush. What was once a low-margin, niche business in the 1990s is now a high-margin, high-cash-flow business.

As the birthplace of boba in the U.S. and home to the largest population of Asian-Americans in the country, there are more bubble tea shops in LA than anywhere else. Los Angeles represents the forefront as consumption and standards are years ahead. Innovation is a prerequisite to survival. In this Modern MBA exclusive, we’re going on the ground to understand the booming economics of bubble tea and what it takes to win in this world from the lens of 3 different shops.

0:00 East to West Gold Rush
3:23 Sponsor Break (GrowthSchool)
5:09 From Goliath to David
21:51 Taiwanese Vertical Integration
34:08 Community-Led Growth

🧋 7 MILES TEA LAB (Hannah)
2010 Sawtelle Blvd, Los Angeles, CA 90025

🧋 ODD ONE OUT TEA (Ron & Pat)
11301 W Olympic Blvd UNIT 124, Los Angeles, CA 90064

🧋 HEY HEY (Chris)
1555 Sunset Blvd, Los Angeles, CA 90026

[ModernMBA]

👉🏻:100% Discount for first 1000 people
Reshare this with your friends who will need this

0:00 East to West Gold Rush
3:23 Sponsor Break (GrowthSchool)
5:09 From Goliath to David
21:51 Taiwanese Vertical Integration
34:08 Community as a Moat

🧋7 MILES TEA LAB (Hannah)
2010 Sawtelle Blvd, Los Angeles, CA 90025

🧋ODD ONE OUT TEA (Ron & Pat)
11301 W Olympic Blvd UNIT 124, Los Angeles, CA 90064

🧋HEY HEY (Chris)
1555 Sunset Blvd, Los Angeles, CA 90026

[hairtohairnetwork]

7 Miles lady is the GOAT. She just gave me a crash course about all businesses in general within just a few minutes.

[FinancialShinanigan]

Chewing on boba distracts me from thinking how I paid $7 at Gong cha

[GuillermoMunozOrtiz]

Hannah is brutally honest. I love it.

An update on businesses you featured on the channel would also be a great video idea. (2 - 3 years later)

[jarupongch]

Hannah needs to hold a lecture on pragmaticism, absolutely refreshing to hear a realistic approach to business.

[codingiswhyicryatnight]

I love how Chris talked about learning each separate component of the underlying product, and working at other businesses that did what he wanted to do. Often, you hear about people who try to go into a separate industry to build a business but don't understand the underlying mechanisms. Or, they come in with an ego and feel as though learning the details is below them / that they'll figure it out on the job. He put in the time to understand the tea and I hope it pays off for him.

[pauljones]

Holy shit that 7 miles lady knows a lot

[BladeRabbit]

Damn Hannah went from bubbly to modern MBA herself

[Teampegleg]

Hannah's Valley Girl Vocal Fry combined with a Chinese accent is something I never expected to hear.

[willy]

Continue interviewing people in the real world, I love to get to hear their perspective. Awesome video

[sugar-rice]

It’s super cool how Modern MBA has started making videos specifically for me

[ayushtyagi]

It's just insane how the lady from 7 Miles is doin 16k orders per month.
What's even more insane is even though odd one out has 12k orders per month.
They're both neck and neck at operating level. INSANE.

[xcelpast]

person 1: numbers driven businesswoman
person 2: premium product artists and innovators
person 3: vibesmaster

[piercechan]

I have been in the boba industry for over 20 years and Hannah is spot on with her analysis of the current state of bubble tea as a business. I have never heard of 7 miles but I will go visit a location soon.

[joelcartagena]

Crazy how it started as a dollar or two and now I can’t find one for less the 4 bucks

[Ziakel]

Milk tea used to be $4-5 a few years back where I'm at. Now it's pushing $7-8 before tipping. feelsbadman

[hockeygrrlmuse]

I lived in SF for 6 years and there used to be this excellent small chain there called SuperCue. They were right next to the light rail stop. I could be standing there, hearing the train come up the hill and even see its roof, walk into SuperCue, order, pay, grab my drink, and step right onto the train. They were so efficient and they always had fun seasonal drinks. They all shut down when COVID hit.

[mooseboykyle]

Hannah should teach an entrepreneurship course, she’s fantastic

[asdkotable]

What I love about modern boba (post powdered flavouring era) is that you can choose the levels of sugar you want. I love sour drinks, and boba is basically my fix for lightly-sweetened, highly acidic drinks. The closest Western alternative would be smoothies or pressed juices, but they're either always served cold (bkended with ice cubes) which I don't always want, or kinda funky tasting because they try so hard to be healthy that they feel the need to blend several fruits and veggies to make a wacky juice mix.

[pauljones]

I LOVE THAT you show how these businesses add community