Iced Tea is the Hottest Thing in the Tea Industry
One of the hippest and high-profitable sectors of the tea industry is iced teas. Only they’re not the iced teas of yesterday. These are milk, fruit, and boba (also called bubble) teas, with roots in Asia and quickly gaining fans in the U.S. They often feature chewy tapioca balls as “bubbles,” sippable via a fat straw.
According to an industry report by Fortune Business Insights, the global bubble tea market was valued at $2.46 billion USD in 2023 and is projected to grow to $4.78 billion USD by 2032.
A lot of that growth is within the United States, with a mix of indie-owned and franchise concepts popping up nationwide.
“We believe that boba is on an ‘up’ trend and there’s a lot of people that don’t know about boba yet,” says Tin Do, CEO of Krak Boba, which launched during the summer of 2020 and now has 28 U.S. locations, spanning eight states that include California, Florida, New Jersey, Arizona, Texas, Colorado, and Nevada.
Similarly, Gong cha, which is now 18 years old, has experienced rapid growth in recent years.
“We’re at just around 2,220 stores today. In the past five years, we’ve opened up almost 600 locations,” says Geoff Henry, president of the Americas for Gong cha, which translates to the very best tea served to an emperor. “Even during the pandemic, we continued to open up at a healthy rate. We think we can get to 5,000 stores in the next few years.”
A growing number of stores are within the U.S., in states like Connecticut, Texas, Florida and New York. Gong cha is in 28 countries, with plans to operate in 40 countries (including in South America) by the end of 2025. In 2006, founders Zhen-Hua (Super) Wu and Ming-Hsi (Frank) Huang opened their first Gong cha store in Kaohsiung City, Taiwan, an evolution of a tea shop they’d owned and managed in that country for 10 years.
Custom
One reason for these two brands’ success is the ability to customize drink orders. This is not only appreciated by customers but also broadens menu options exponentially.
“There’s 600 drink combinations that you can explore,” says Gabriela Parck, Gong cha’s senior manager of training operations for the Americas. “You could go into the store every day and try something different for two years. The sky’s the limit.” That’s due to 10 different toppings and tinkering with the sugar level, along with selecting from four tea bases (black, Earl Grey, oolong, and green).
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Collaborations also earn repeat customers at Gong cha. “Customers are looking for collaborations. It’s wonderful that we’re able to include that,” says Parck. Three recent examples were with Hershey’s (resulting in a Hershey’s cookies and cream milk tea), Frank’s RedHot (the sauce was featured in two drinks: Spicy Peach Slush and Spicy Passion Fruit Slush, both infused with Frank’s RedHot white pearls), and Snoopy (Gen Z is currently obsessed with the cartoon dog).
“People came in to try [these drinks] and then tried other things too,” says Parck. “It got people in the door.”
Ingredients Authentic
Authenticity is at the root of milk, fruit, and boba tea recipes. The tea is sourced from Asia, and the other ingredients are gathered as fresh as possible—using whole foods and not powders whenever possible.
For example, Krak Boba’s Dragon Slayer contains dragon fruit and mango purees, and for the King Brûlée, “we burn the sugar at the top just like a crème brûlée,” says Do.
Do even uses his mother’s recipe for taro, featured in two Krak Boba drinks, including Taro Crush (taro slush topped with sea-salt cream). He also equates the proprietary tea that Krak Boba sources as similar in quality to red wine in that it has a pronounced mid-taste profile as well as a finish. “The R&D process refines the drink until it’s rated nine out of 10,” Do says, with a goal to reach, with the boba, “perfect softness, delicious, chewy, and a balanced texture.”
As a certified tea sommelier, Parck also takes the task of sourcing whole-leaf tea for Gong cha seriously. “Being able to understand the mouth feel of the tea, the flavors, where the tea is cultivated, the topography…I have a bigger understanding and more respect for what we carry,” she says. “The quality of the tea we carry is amazing, from some of the finest estates in Asia.”
Flavors
At Krak Boba, strawberry flavors tend to be popular, along with its matcha drinks (Matcha Storm, Matcha Milk Tea, and Strawberry Matcha Latte). Smoothies also attract customers, including three recipes from Parck's family, who owned a smoothie stand in Santa Fe Springs, Calif.: Maui Waui, Mango Tango, and Strawberry Gon’ Bananas.
The refreshing nature of these drinks is also a huge appeal and favored over hot beverages. “When you want to wind down, most people reach for a refreshing, cool drink,” says Parck, adding that Mango Smoothies, Strawberry Matcha Lattes, and brown sugar milk teas are popular orders. “It doesn’t matter if you’re going into a store or a restaurant. Younger generations are ordering a cold drink and sitting down with their friends. It’s become a trend. We’re starting to see a bigger trend of people coming in and having a refreshing drink in the café.
“People are also upsizing their drinks as well because they are looking for something cool, refreshing, and Instagrammable,” she says.
Krak Boba also uses its origin story as part of its branding. As a Polish ruler, King Krakus led his people to slay the Wawel Dragon ravaging his kingdom, a story that inspired the company. The phrase “slay the dragon” is continually used in their marketing as well as three pillars: courage, joy, and service. “We’re inviting our guests and customers to take control of and rule over their lives,” says Do. “How do you slay in your life? That’s all about courage.”
New
Staying fresh by offering new, refreshing drinks is another key to their success. Krak Boba recently launched five new drinks: Matcha Prince, CocoThai Butterfly, Cocoberry, Yogurt Smoothies (in four flavors: peach, strawberry, mango and lychee), and Cosmos Serenade.
The same is true for Gong cha. “This year has been a great year of innovation for us,” says Parck. “In the beginning of the year, we were looking for more indulgent drinks during the wintertime. We launched our Strawberry Almond Jelly Smoothie and Strawberry Almond Jelly Milk Tea (both featured strawberry jam, almond jelly, and milk foam) around Valentine’s Day. Everybody loves strawberry around that time of year. it was a beautiful, colorful drink. It was a very Instagrammable drink.”
And, just like restaurants cook with the seasons, drinks are developed this way, too, with new roll-outs each season that celebrate flavors iconic with that time of year.
“Most of the time when you think summer, you think fruity and refreshing,” says Parck. “Our Thyme Mango (with a green-tea base) was exactly that. It had layers of passionfruit jelly and was topped with mango drizzle. People were raving about it. It makes everything so exciting, fun and festive.”
Plan to Attend or Participate in World Tea Expo, March 24-26, 2025
To learn about other key developments, trends, issues, hot topics and products within the global tea community, plan to attend World Tea Expo, March 24-26, 2025 in Las Vegas, co-located with Bar & Restaurant Expo. Visit WorldTeaExpo.com.
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