Once popular only in Taiwan, bubble tea now has millions of followers spread across the Asian continent from as far north as Japan to the southern hemisphere of Australia.
Bubble tea was once considered a fad in the 1980s and lost its popularity after a few good years. However, it had made a strong comeback in the early 2000s, and this ‘matured growth’ segment is expected to stay as long as the industry continues to evolve and satisfy the ever-changing consumer demands, with the recent trends being clean-label, natural, functional, healthy and low sugar as themes promoted – directly or indirectly – by bubble tea players across the industry
The bubble tea market is valued at more than US$3 billion in 2022 and is estimated to reach US$4.3 billion by 2027. The Asia Pacific region holds the largest market share and is projected to grow at a CAGR of 10.7%. With rising disposable incomes, sophisticated middle income consumers are also seeking novel, specialty, crafted tea beverages. Apart from the usual tapioca balls, fruit jellies, cheese or milk which made bubble tea unique and delectable, one must not overlook the main ingredient content – which is the liquid tea beverage itself.
AFBR has the opportunity to interview Sarah Lim, Marketing Director, Asia Pacific Beverages, Human Nutrition at ADM to gain insights on the importance of concocting the right flavors of tea beverages and customising these products to reach their target consumers. The following are the excerpts from the interview:
What could ADM offer indirectly to bubble tea vendors/players in terms of product offerings/variants – it mentioned customisable ingredients – what kind of ingredients specifically ?
The growing popularity of bubble tea is driven from the drink’s unique flavors and flexibility to customise to one’s taste profile, which has become an identity that the younger generation associate with. In the market, the bubble tea vendors have expanded their repertoire to include fruit-infused tea, sparkling juices and cross-flavor options such as cheese and yoghurt tea.
As part of ADM’s proprietary design thinking approach to meet consumer’s demand and shifting lifestyle, our beverage portfolio of plant-based proteins, botanicals, microbiome and flavors are able to give tea beverages the functional edge and excitement that consumers are looking for. ADM also offers a beverage system approach that provides the natural sweetness and taste to help brands innovate and position themselves as better meal accompaniment drinks. Low sugar teas can also be fortified with functional health benefits from added fiber or vitamins, for consumers to have a proactive approach toward health and wellness.
Are there any latest innovative ingredients development from ADM which could extend the ‘matured’ growth of the bubble tea industry ?
ADM has a range of offerings to ensure that tea manufacturers keep up with the trends and meet consumer expectations, including cross-category indulgence experience for ready to drink (RTD) products. For example, brands could provide a dessert-like experience by incorporating popular trending flavors such as yoghurt-based tea, plant-based alternatives, and localised delights.
Brands could consider adding Fibersol® into their product design to cater to consumers. Fibersol® is a soluble fiber that could provide a daily source of fiber. In addition, clinical studies have shown that Fibersol® helps reduce post-meal peaks and overall response in blood glucose in addition to promoting digestive health.
The growing disposable income of the middle class has led to the premiumisation of foods and to the adult sophistication of consumers. ADM is meeting consumer’s shifting lifestyle by reimagining how consumers consume their everyday products in affordable luxury, such as RTD tea by elevating the beverage through ingredients that are experiential and provide functional benefits.
The millennials and the younger generation have developed a regular craving for bubble tea – once a fad but has now become a lifestyle product. What does ADM perceive as the latest consumer trends/preferences relating to this segment that will impact growth in the future?
Consumers continue to reevaluate and refocus their health and wellness routines across all aspects of their lifestyles. In fact, recent research showed that 82% of Southeast Asian consumers consider RTD Tea as more refreshing than other beverages, and 77% of Southeast Asians perceive RTD tea as better-for-you alternatives that can offer health benefits compared to other beverages.
With more than a few dozen regional players (Tealive, Milksha etc), all with their own flavor concoctions and seeking to increase their shares in a matured but growing segment, how can a bubble tea player, big or small, survive in this rather competitive market?
Consumers are taking a more holistic approach to health and wellness and are increasingly aware of the beverage they consume. They are increasingly looking for authentic sensorial experiences while supporting a holistic healthy diet. Healthy beverages such as teas and low-calorie content flavours are proliferating the market growth.
For market players, it is important for them to be attuned to the needs of their target audience and adapt accordingly. Our expertise and passion to improve consumers’ well-being has allowed ADM to be the trusted partner who can deliver innovative solutions to bubble tea players. Our comprehensive beverage system portfolio from flavors to functional ingredients deliver both great taste and science-backed functionality, meets the consumer’s changing lifestyle and deliver elevated experiences that not only satisfies the novelty speakers but also addresses modern health concerns.
For more information on ADM customised proprietary solutions for tea beverages, email FoodDesign.SEA@adm.com or visit www.fibersol.com
