Bubble Tea Company Business Plan

Product and Services

The products that Pearl Tea sells include bubble tea in several flavors. Bubble tea does not actually have bubbles in it. The name likely came from either the fact that the beverage looks like it has bubbles in it or people mistakenly thought the word “boba” was bubble. What looks like bubbles are little tapioca balls about the size of a pearl. The tea originates in Taiwan where the word “boba” is slang for pearl. The tapioca balls are made by boiling raw tapioca pearls until they are soft. Then they are stored in a simple syrup where they become sweet and chewy. Bubble tea is made by adding chilled beverages such as fruity tea, smoothies or milk-based tea or coffee to the tapioca balls and shaking.

Pearl Tea is unique because all it will sell is bubble tea in several different flavors. There ae many different types of fruit juice, smoothies, teas and coffee that the “bubbles” can be added to and the result is a delicious, refreshing beverage that is fun to drink. Five years ago when shopping at a mall, a person might have seen a lone bubble tea cart or kiosk pop up, but then go out of business because no one knew what the mysterious drink was. However, over the past 5 years, bubble tea has become more and more popular and more and more bubble tea businesses have opened and are successful. The plan is to get in on the craze before the market is saturated with bubble tea businesses.

Bubble tea is a product. Pearl Tea will purchase the tapioca pearls and make them into boba on site every day. They will also purchase the fruit juice, teas, and coffee products to mix with the boba. Making the boba on site will provide a high quality product rather than purchasing them already made and not knowing how long ago they were made or how they were made.

Various bubble tea businesses around the greater Los Angeles area sell their bubble tea for an average between $3 to $3.50 per 16 oz beverage. Pearl Tea will offer some drinks with premium juices such as pomegranate juice, guava juice and mango nectar at a slightly higher price of $4 per 16 oz beverage. Other more common juices such as pineapple, orange, grapefruit or cranberry will cost $3 per 16 oz beverage. Coffee and tea beverages will cost $3.50 per 16 oz beverage because they are milk based, which adds another dimension and, therefore, another price point.

Huntington Beach is a popular place to go to spend the day at the beach in Southern California. Many entrepreneurs have opened fast food and beverage businesses near the beach to accommodate the crowds that come to the beach especially in the warm weather months, which is a good portion of the year in Southern California. Currently, Pearl Tea is looking at locations for lease that are within walking distance of the nearest beach. A relative of one of my partners in this venture owns a little shop where bubble tea is one of the items on the menu. That partner worked for the relative throughout her childhood, so she is well experienced in making bubble tea. She taught the rest of us all she knows about the product, which is why we decided to go into this joint venture.

Marketing Plan

A. General Market

Bubble tea is a fast food beverage. A comparable business is Orange Julius. Even though Orange Julius has now merged with Dairy Queen, they are still present in shopping malls. Orange Julius was known for its unusual beverage, and shoppers could purchase one at the booth or mall unit without sitting down and ordering from a menu. Another similar business is Jamba Juice. Pearl Tea is a quick delivery beverage business. Like Jamba Juice or Orange Julius, Pearl Tea is offering an unusual beverage alternative to the typical sodas, coffee or tea and they are not offering it as a food accompaniment. The focus is narrow, but that is the way a niche business works: it focuses on one product that is not offered everywhere.

While there is some sugar in bubble tea, it can be made low fat and low calorie depending upon what type of juice, coffee or tea the customer chooses. Min, Green, and Kim (2016) of Food Science and Nutrition list the calories of the various components of bubble tea such as the tapioca pearls, which have 78 calories in a serving. However, other aspects such as syrup and jellies that are typically added to the beverage can have over 200 calories per serving (Min, Green, & Kim, 2016, p. 41)The juices Pearl Tea uses offer healthful benefits such as anti-inflammatory and anti-carcinogenic properties. Doctors and nutritionists warn against drinking soda because it is so unhealthy. Bubble tea is a more nutritious alternative. Allied Market Research (2019) says, “The addition of fruits. . . along with the benefits of tea supplements the [market] growth. However, addition of preservatives, artificial color,