Issue link: https://read.dmtmag.com/i/1506254
28 STiR coffee and tea | 2023 Issue 4 (August / September) B By Dan Bolton ouncing back from contraction during the Covid-19 pandemic, the global mar- ket for tea consumed away from home is expanding briskly, led by chai bars and bubble tea outlets. The trend caters not only to tea drinkers but also investors, generating a pipeline of plans for initial public offerings. Taiwan's Gong Cha opened its 2,000th location on July 21. Serving bubble tea, milk tea and other offerings, the company operates in 23 countries. In the United States, it has 225 locations in 19 states. Gong Cha celebrated the new opening with a Global Tea Party that kicked off at an event in New Zealand and reached a finale in Boston, Massachusetts. Gong Cha was launched in 2006. Estimates on the out-of-home tea industry's size vary but all sources predict solid growth. The global bubble tea market is expected to generate $4 billion per year by 2030, according to Fortune Business Insights, which forecasts a combined annual growth rate (CAGR) of 7.5% for the segment through that year. According to Vantage Market Research, the worldwide bubble tea market will reach $3.8 billion by 2030. Singapore-based Momentum Works estimates that in China, sales of flavored tea reached $20 billion in 2021, double that of coffee. According to the China Tea Marketing Association (CTMA), 450,000 tea shops of all types gener- ated $47.3 billion in China in 2021. Boba market leader Mixue Bingcheng Co., which operates 25,000 outlets in China and 3,000 overseas, is weighing a $1 billion initial public offering, according to Bloom- berg News. Mixue is now the fifth largest fast-food chain in the world by number of outlets, reports The Economist. Bubble Tea and Chai Chains Resume Expansion China's bubble tea leader, MixueBingcheng Co., plans an IPO in the U.S. Competitors include HeyTea, Na- yuki Tea, ChaGee, and Happy Lemon. Transparency Market Research forecasts that out-of-home tea and herbal tea sales will reach $47.7 billion, expanding at a CAGR of 9.3% through 2031. Zion Mar- ket Research projects a CAGR of more than 11%, with revenue exceeding $49.9 billion by 2026. Data Intelo projects a CAGR of 5.5% for black tea consumed out-of-home through 2030. Rising chai In South Asia and the Middle East, fran- chised chai ventures are more popular than bubble tea outlets, but expansion is at a somewhat moderate pace compared to boba's fast international growth. In- dia's Chai Sutta Bar, the brand having the most locations, announced in late July that it had established a regional headquar- ters in Dubai, according to Arabian Busi- ness. Founded in 2016 in Idore, Madhya Pradesh, the company has 470 outlets in 190 Indian cities and three countries. Chaayos, founded in India in 2012, operates 200 outlets in six cities and re- cently announced financing to open 400 locations by the end of 2023. Rival Chai Point operates 100 chai outlets.