Hip to Sip: Tea With Gummy Balls

Late on a recent Saturday night at a noisy tea bar in Westwood, a lively crowd of hip young things are sipping sweet concoctions through wide, brightly colored straws.

Known as boba teas, the drinks are featured at a new breed of tea bar popping up in college towns and trendy spots across the nation. Blended like martinis in metal cocktail shakers, the $3-to-$4 drinks, with their gummy balls of tapioca, are edging their way into the mainstream from California’s Chinese American enclaves.

A small but determined group of young entrepreneurs is betting that the colorful drinks that took Taiwan by storm a decade ago will fuel similar enthusiasm for tea bars in the United States.

Much like cigars and wine, tea has become a lifestyle to be marketed. Hugo’s restaurant, a longtime West Hollywood entertainment industry hot spot, recently added a separate tearoom complete with fountains and bamboo and more than 100 kinds of tea. The ritzy W Hotel in Manhattan features a “tea sommelier” in its restaurant.

In Westwood, four tea bars cater primarily to UCLA students and their late-night hours, and at least two more are on the way. The university itself started offering boba drinks at campus coffeehouses.

“This market is so untouched in the United States that I think anyone can make a name for themselves if they know what they’re doing,” said David Wang, 30, a grandson of the founder of Taiwan’s Ten Ren Tea Co.

With $3 million from Ten Ren and private investors, Wang recently opened two slick tea bars called Cha for Tea in Westminster and Irvine and has plans to start two more in New York and San Diego.

Figures for the fledgling boba market aren’t available yet. But add that to the chai tea fad in recent years and the growing taste for green tea, all of which has helped push up the overall U.S. wholesale tea market an estimated 8% last year to more than $4.7 billion from sales of $4.4 billion in 1999, according to Sage Group International in Seattle.

Some industry analysts, including Brian Keating of Sage Group, aren’t so sure boba teas will do what chai and green tea did for the industry, even if it is prompting the opening of more tea bars.

“I think it will have a very nice niche,” he said, “but I don’t think it will make the jump to Starbucks and the International House of Pancakes.”

Nonetheless, Keating sees the trend toward the Americanization of global tea styles, and that should lead to a record U.S. consumption of tea this year.

Coffee purveyors aren’t worried about the competition. “Because tea has such a different taste profile from coffee, it is in our minds a complementary beverage,” said Gary Goldstein, spokesman for the National Coffee Assn. in New York.

Indeed, Starbucks Corp. acquired Tazo Tea Co. in Portland, Ore., two years ago and added Tazo teas at its stores. And trendy coffee stores are offering rare, exotic teas for as much as $80 a pound.

About 30% of U.S. adults drink tea every day, compared with 54% who drink coffee daily, according to the National Coffee Assn. But tea consumption in the U.S. has been rising as coffee drinking has declined, according to the U.S. Department of Agriculture.

The annual consumption of coffee dropped nearly 20% in the last five years from 21.5 gallons per person in 1995 to 17.3 gallons last year, agency statistics show. Tea consumption, however, rose nearly 3% from 6.9 gallons to 7.1 gallons in the same period.

Wang hopes that Asian American college students at UC Irvine will introduce their non-Asian friends to the boba drinks at his lively tea bar near the campus.

Ten Ren tea, of course, is well known in Chinese American communities; it has 17 retail stores nationwide, including nine in California. Its Tea Station bars in Irvine, San Gabriel and Hacienda Heights have catered mostly to a Chinese American clientele.

“All the Chinese people know who we are. It’s time to expand to the mainstream,” said the Taiwan-born Wang, a Columbia MBA. Wang presented his Cha for Tea blueprint to Ten Ren’s elders three years ago while working at MTV in New York. Now there are Cha for Tea locations in China, Taiwan and Australia too.

As he builds more sites, Wang will find plenty of competition.

Dali Yu, a 29-year-old UCLA graduate, opened a Relaxtation tea bar in a restaurant and retail center on L.A.’s Westside side two years ago and has since drawn a competitor in the same building. Yu is planning to open another bar in Westwood Village, closer to campus, and a third one in South Pasadena in the next few months.

Restaurateur John Mekpongsatorn, also 29, was looking for new products for his Pan-Asian restaurants when he saw how popular boba drinks were in L.A.’s Asian neighborhoods. He opened the 60-seat Boba World teahouse in Westwood, just a hop from where Yu plans to open her next tea bar.

Mekpongsatorn now serves boba drinks at his Brentwood and Alhambra restaurants. “Beverages have a higher profit margin than food and a lot less overhead,” he said.

He said he is in the process of setting up a franchise program and has several investors lined up. Separately, he plans to open one or two more stores of his own in the next six months.

Green-tea consumption has sky-rocketed in the last few years, buoyed by health claims about a high level of anti-oxidant vitamins. Wholesale green-tea sales are expected to rise 35% to $402 million this year from $298 million last year, according to Sage Group.

Sales of the milky spiced chai tea drinks, which burst into the mainstream two years ago, should rise 54% to $37 million for 2000 from $24 million the previous year, Sage predicts.

Enthusiasts of boba, often referred to as pearls or bubbles, believe they have the formula for the next big splash. The glutinous tapioca or yam balls are added to any number of tea- and fruit-based drinks, but the most popular drink consists of sweetened black or green tea with milk, shaken with ice and served with a heaping scoop of gleaming boba. The drinks are sipped through extra-wide straws.

Boba entrepreneurs are seeing no limits to their dreams.

“I want to be bigger than Starbucks,” Wang said. And he’ll have Mekpongsatorn on his tail: “I want to be the one putting it in malls across America. But if it’s not me, it’s going to be somebody else.”