The American non-alcoholic beverage market has long been dominated by coffee. However, recently, a new contender has been making itself known, especially with Gen Z and millennial consumers: bubble tea.
According to the analysis firm Grand View Research, the US bubble tea market size was estimated at US$953 million in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 9.5 per cent from 2024 to 2030.
Even though bubble tea was popularised in Taiwan in the 1980s, the US now accounts for 37.5 per cent of the global bubble tea market, according to Grand View Research.
One player that is making a bid for Americans’ growing fixation with this playful drink is the China-based beverage retailer Heytea.
Heytea’s cheesy entry to the market
Heytea first entered the beverage scene in 2012 when its founder Nie Yunchen got the idea to create a tea drink made with fresh milk rather than the powdered version typically available in Jiangmen, a city in the central Guangdong Sheng province of China.
But it was Yunchen’s introduction of ‘cheese tea’, a cold tea topped with a thick and frothy cream- cheese-flavoured foam, that caused the brand to go viral. While the idea of cheese and tea remains unconventional to many tea drinkers today, the salty and sweet combination became popular with bubble tea enthusiasts and helped boost global recognition for the brand.
Today, there are over 4300 Heytea stores spread across 300 cities worldwide, with nine stores in the US.
On September 13, Heytea opened its second bricks-and-mortar location and first concept store in New York.
Unlike, the first New York location, which opened in December 2023 and sold an impressive 2500 beverages on opening day, the new location has a much more traditional design.
Jessica (Qinjie) Shen, Heytea’s associate global brand director, told Inside Retail that the concept store took inspiration from a traditional Chinese pavilion courtyard. With ink paintings inspired by historical artwork, lacquer craftsmanship and softened lighting to add a natural warmth to the setting, the store mixes tradition with modernity to create a peaceful atmosphere.
“The overall layout is aimed to create a place where guests can walk in, relax, recharge and enjoy an authentic, modern experience,” Shen enthused.
The opening saw eager tea enthusiasts lining up around the block for a drink and a chance to grab a piece of the limited-edition collaboration between Heytea and fashion designer Sandy Liang.
The brand director explained that the company is positioning itself “as a new Asian tea brand and that it doesn’t see itself “as a bubble tea brand for a few reasons.”
For one, Heytea places a strong focus on a healthy lifestyle by prioritising the use of “real ingredients”, like organic milk and fresh fruit and tea leaves, as opposed to artificial flavouring and creamers. The brand also openly discloses the nutritional value of the ingredients used in a way few beverage brands, especially bubble tea companies, do.
Overall, the brand’s strategy is centered on creating a holistic brand experience via details like “the design, our packaging, our drink flavour”, Shen commented.
Heytea’s strategy for success in the US
Shen disclosed that there will be 10 Heytea locations throughout the US by the end of this year, and there are plans to eventually open shops in Boston, San Francisco and Jersey City.
Heytea’s next location is expected to be in the heart of Times Square in New York City.
In July, Heytea reportedly signed an agreement with Swarovski to take over its 2390-sqft retail space at 1565 Broadway.
Shen commented that the heavy concentration of tourists and lack of tea shops make Times Square an ideal location for the brand to set up its next shop, though the location’s opening date is still to be revealed.
For now, the brand is taking a slow but steady approach to its physical retail expansion in the US to “make sure that everything is perfect”.
Shen explained that the company wants to make sure it is listening to consumers and gathering feedback to tailor a better content and product strategy for the market.
She elaborated that the brand plans to continue elevating its store design and presentation, packaging elements, and offer unique collaborations and flavours for local consumers.
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