Everyone from Starbucks to Chinese giants wants in on the global boba tea craze. Meet the family who started it all.

08.08.2024 - 04:10 / insider.com

Once a novelty beverage, boba or bubble tea has moved into the mainstream.

It's an unexpected turn for Chui Shui Tang, the teahouse in Taiwan that says it pioneered the beverage in the 1980s.

Chun Shui Tang started as a traditional teahouse selling tea leaves — a dime a dozen in Taiwan. But, as Liu Han-Chieh, the teahouse's founder, found out, selling tea was harder than loving tea.

Speaking to Business Insider at his company's headquarters in the central Taiwanese city of Taichung, Liu was candid about how the move benefited his business.

"In Taiwan, we need to sell tea leaves with a human touch — customers need to try some tea before buying tea leaves, so some would just be chatting for long hours with you over tea but not buy eventually," said Liu, 72.

Furthermore, traditional Chinese tea drinking involves multiple steps, which can make the sale pitch long-drawn. And when customers finally do commit to buying a bag of tea leaves, they could brew it for weeks.

It's just not the best way to make money.

Inspired by iced coffee on a trip to Japan in the early 80s, Liu went home with the idea for a hand-shaken iced tea — a bold move for the teahouse at the time, as cold tea was generally only served at street food stands, he said.

Soon, Lin Hsiu-hui, a young staffer who was managing sales of chilled tea at the teahouse, was outselling his traditional hot offerings.

"With iced tea, you can sell to anyone from three years old to 80 years old. With hot tea, you can only sell to old people," said Liu.

It also helped that the younger customer base would buy one cup of ready-made chilled tea a day instead of one bag of tea leaves a month.

Liu knew he had stumbled upon a winner.

Liu instructed Lin, who is now the R&D director at Chun Shui Tang, to experiment with adding new ingredients to tea.

Lin said she simply added her favorite childhood Taiwanese dessert treat — chewy tapioca balls — to milk tea. Liu coined the term "pearls" for the topping because they reminded him of black pearls.

Liu likened the evolution of his tea offerings to coffee giant Starbucks, which was founded in 1971 and started out selling coffee beans. Now, Starbucks sells everything from beverages to meals, coffee mugs, and merchandise.

Liu's daughter, Angela — who is now Chun Shui Tang's managing director — acknowledged she would like the Taiwanese tea chain to be like Starbucks is to coffee.

But it has a long way to go: The tea company has over 200 outlets globally, compared to Starbucks' count of more than 38,000.

And Liu, the teahouse's founder, doesn't appear to be in a rush to expand. He said he's keen on taking a longer-term approach to growing Chun Shui Tang. He's also not looking for external funding.

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