What Is the Market Segmentation of Milk Tea and Bubble Tea?

Studying the market segmentation of milk tea and bubble tea products will help movers and shakers in the beverages industry make good decisions. A recent market report from Grand View Research takes a closer look at this emerging product market. 

market segmentation of milk tea written in a paper
Market segmentation is an important strategy in marketing your products

The market segmentation of milk tea and bubble tea is an essential consideration for beverage industry consumers. When it comes to beverages, bubble tea is growing in popularity across North America, Europe, and the Asia-Pacific areas. Based on a report from Grand View Research, Inc, the global bubble tea market is expected to reach USD 4.3 billion by the end of 2027.

The market size, share, and trends analysis report looked at the 2016 to 2022 forecast period. The estimated market size of USD 2.1 billion in 2019 is a CAGR of 7.80% from 2020 to 2027. Those interested in getting in on this growth need to understand the details of this bubble tea market report and what is driving this growth.

Understanding the New Demand for Bubble Milk Tea

Bubble tea is a drink that has a tea base and has chewy tapioca balls or tapioca pearls in it. Most also have fruit juice or milk as well. 

While it’s not a new drink, as it came to the market in the early 1980s after being introduced in Taiwan, it has been growing in popularity since the 1990s, and now enough data is available to study the growth it has seen over the years.

This drink comes in several varieties and flavors, but black pearl milk tea and green pearl milk tea continue to be some of the more popular options. Bubble tea is sometimes called boba milk tea, boba tea, or bubble milk tea, but these terms all refer to the same basic tea drink.

Black pearl milk tea is one of the most popular tea worldwide

Bubble tea can be made with or without milk creamer. They typically have a sweetener, like honey or syrup, and can be hot or cold. Most bubble teas today are served cold, but the original drink created in Taiwan was hot.

They come in a wide range of unique flavors, with companies developing new flavor profiles constantly. The bubbles, or the tapioca pearls, sometimes have a brown or black color due to brown sugar content.

Check out our guide on how to market your tea business.

The History of Bubble Tea

Bubble tea hit the market in the 1980s and quickly grew in popularity in Taiwan. Soon, it became a cultural icon and part of the country’s food history, and April 30 is now National Bubble Tea Day. In addition, it didn’t take long before the drink spread across Southeast Asia, including Hong Kong, Singapore, Vietnam, Japan, and China.

A family of Taiwanese immigrants introduced the drink in the United States in the 1990s when they opened the Fantasia Coffee & Tea shop in California. The bubble drink soon became famous throughout North America, spreading to Canada and Mexico, and several companies grew to be part of the market share. Around the same time, it spread to Australia and Europe.

Today, bubble and boba tea shops are found in most major cities throughout the world in developed countries, which led to the need to perform market analysis on the bubble tea market to see where the growth is going to take place.

If you’re considering opening a bubble tea shop, check out our bubble tea shop name ideas.

Scope Of The Report

The Grand View Research Report about bubble tea used 2019 as a base year for its estimates. It also took historical data from 2016 through 2018 to create a forecast period from 2020 to 2027. The report looked at several aspects of bubble tea sales, including:

  • Revenue forecast
  • Company rankings
  • Competitive landscape
  • Growth factors
  • Trends

The report studied product, flavor, and region, specifically looking at the United States, United Kingdom, France, Germany, Thailand, Brazil, China, North, Central, and South America, Asia Pacific, and Europe.

Market Segmentation Of Milk Tea

By Base Ingredient Type

The report explored differences between black tea, green tea, oolong tea, and other tea-based ingredients. It found that black tea had the most significant percentage of the bubble tea market size, with a percentage of 45%. Researchers speculated that the health benefits of black tea and its authentic flavor were part of the reason for its popularity.

Orange pekoe tea
Black tea had the most significant percentage of the bubble tea market size

Green tea, on the other hand, is expected to see the most significant growth in the forecast period, with a CAGR of 9.2%. As people learn more about green tea’s benefits, they will want bubble tea products made from it. Oolong and white teas were the least popular types in the report.

By Flavor Type

One of the reasons bubble tea is so popular is because of its many different flavor profiles. The research report expects the most significant growth in the fruit flavors, such as peach, banana, lemon, apple, honeydew, mango, passion fruit, strawberry, lychee, coconut, and avocado. However, fruit combinations are likely to happen as well. 

Classic bubble tea flavors, like green tea, white tea, black tea, and oolong tea, are the next most popular option, followed by coffee and chocolate tea flavors. However, the report also had a category for “other flavors” that did not specify a particular flavor profile.

By Component

The components of bubble tea are the liquid flavors, syrups, and additions that make up the drink. The report also studied which components would see the most impact in the coming years. The liquid component saw the highest growth potential, with a CAGR of 8.4%. People seem to be very interested in taking different flavors of the drink. 

Sweeteners came in second, followed by creamer choice. The tapioca pearls were the fourth most crucial component in the market report.

By Geography

The report also looked at the regions with the most significant consumption of bubble teas. The most common areas that served these teas include:

  • Asia Pacific – 35% of the market, mainly because bubble tea came from Taiwan
  • Europe – Fastest growing market segment
  • North America – Expecting steady growth

Each of these stable markets will continue to push the demand for bubble tea, and new bubble tea shops will likely open to meet that demand.

Key Companies Driving the Growth of the Bubble Tea Market 

Several companies that make bubble tea are actively looking to increase their presence and branding worldwide. Several are working on recipe ideas to launch new flavors into the market.

Best bubble tea flavors
Several companies are exploring launching different bubble tea flavors

As an example, in June 2019, Secret Recipe, a restaurant chain in Malaysia, launched several new-to-market bubble tea flavors. Among those are the boba brown sugar milk tea, the boba kopi-C, and the boba juice tea. 

The report specifically identified these companies as some of the most promising players in the bubble tea market:

Watching what these companies have done with bubble tea could be an excellent way to see what the market intends to continue doing in the future. 

Market Growth Drivers

The popularity of bubble tea, especially in emerging markets, comes from several factors. First, health-conscious individuals are embracing the benefits of green, black, and oolong teas, the base drinks for most boba and bubble tea recipes. Though the high sugar content of bubble tea may lessen its benefits, the perceived health benefits drive demand.

Second, advertisements from key players in the market have been quite aggressive. Several have taken on celebrities to endorse their products, which has paved the way for some growth. 

Finally, boba shops can introduce new flavors and blends because of how these drinks are constructed. New flavor profiles generate new buzz about the drink, increasing the demand for bubble tea. 

Market Challenges

Even with this exceptional forecasted growth, the bubble tea market is not without its potential challenges. The popularity of coffee is one of those challenges. Many people are unwilling to switch from their favorite coffee drinks to explore bubble tea and its many flavors.

A second challenge in the market is the high sugar content of these drinks. Health-conscious individuals have pushed demand for tea, but those same individuals usually want to avoid excessive sugar intake. This could hurt the demand for bubble tea and impact its growth slightly.

When is national bubble tea day?
Bubble tea is competing with the demand for coffee in the market

Similarly, artificial preservatives are found in many bubble tea mixes. In addition, consumers are starting to want organic and fresh beverages, which could also limit the global demand for bubble tea.

Finally, supply chain issues may hurt growth in the coming years. For example, most of the tapioca used in bubble tea in North America comes from farms in Asia. If the supply chain prevents tapioca from crossing the ocean, such as in March 2021 when the Suez Canal was blocked, bubble tea shops may not have enough of the raw ingredients they need to make the beverages could hurt growth. 

What the Report Means to Market Players

The report has important data that bubble tea suppliers, creators, and sellers can use to drive their choices in the coming years.

First, it clearly shows that there will be demand for this drink if trends stay on the track they currently follow. Second, stakeholders have the potential to create profitable businesses by capitalizing on these trends. Finally, the bubble tea market has strong growth potential and expected income in the coming years, making now an excellent time to jump in and start.

Second, demand may be there, but supply chain issues will continue to be a problem for the bubble tea market. Bubble tea requires tapioca, and tapioca has a limited growing area. Therefore, some companies will need to get creative to find ways to market drinks like bubble tea that do not have tapioca pearls to continue capitalizing on this growth if supply chain issues occur again.

The availability of tapioca is scarce

Additionally, analyzing the various factors in the report will help suppliers, buyers, and sellers make the right decisions about what products to invest in as they look to make a new product. They will also have a better idea of whether or not the demand will grow in their particular part of the world. 

Finally, the report identifies key market players. These companies are leading the way toward making boba and bubble teas an essential part of the beverage industry.

As a result, stakeholders looking for mergers and acquisition options will want to keep an eye on these industry leaders because they know what is happening within the industry and have a feel for the market and its growth.


  • Nicole H.

    Nicole Harms has been writing professionally since 2006. She specializes in education content and real estate writing but enjoys a wide gamut of topics. Her goal is to connect with the reader in an engaging, but informative way. Her work has been featured on USA Today, and she ghostwrites for many high-profile companies. As a former teacher, she is passionate about both research and grammar, giving her clients the quality they demand in today's online marketing world.