BUBBLING UP
Tea trends in action.
The bubble tea market is expanding its horizons. Here Chatime and Gotcha share insights into their 2021 plans.
CHATIME
Andrew Benefield is chief development officer at Chatime Group.
Q. HOW DID CHATIME BUSINESS BOOM THROUGH 2020?
A: Chatime persistently strives for excellence – even with the uncertain times that Covid brought throughout 2020. Over the last year we opened six new sites across Australia with one location being a second site for existing franchisees. Some key stats for last year are: 31 per cent of our sites returned a positive Like for Like over the course of 2020, we achieved a five-year sales compound annual growth rate (CAGR) of +14.2 per cent and reached a 5-year store count CAGR of +14.9 per cent.
Q. HOW MANY STORES ARE IN AUSTRALIA NOW AND WHAT'S THE TARGET FOR THE NEXT 12–24 MONTHS?
A: We currently have 126 Chatime franchises located across Australia with 29 more to come over the course of 2021. We have more than 50 per cent of our target locked in.
Q. HOW DO YOU PLAN TO EXPAND THE NETWORK?
A: We aim to expand our network through franchising as we have found that stores run by driven, dedicated business partners who are heavily involved in their own businesses tend to perform better. We aim to branch out right across Australia and to be in every major shopping centre and city.
As well as this, we are currently working on an exciting project to expand into rural Australia, looking to hit locations such as Orange, Bathurst, Bendigo and Ballarat towards the end of 2021.
Q. WHO IS THE CUSTOMER AND HOW IS THE DEMOGRAPHIC CHANGING?
A: From researching into our customer base, we’ve made some really awesome discoveries that have allowed us to really tune into our demographic. For example 78 per cent of our customers are women with 71 per cent between the age of 18 to 35; while 43 per cent (and increasing) are Australian, however 42 per cent (and declining) come from an Asiatic background.
We’ve also established that our customers are high-level digital natives and although they are brand loyal, they are mainly driven by innovation. So we can see that although we have roots stemming from Taiwan, our products are definitely appealing to the western market and this is undeniably on the rise.
Q. HOW IS CHATIME DISTINCT FROM OTHER TEA BRANDS IN THE MARKET?
A: Chatime aims to delight current and new customers via delivering superior, tailored and digitally-supported experiences. Through our tastefully provocative marketing, we highlight issues in a witty way, sparking curiosity and getting our audiences to think, often leading to change.
Unique to Chatime is our Loyal-Tea app, which allows our customers to get the most out of their Chatime experience. They can earn tea-riffic awards with points earned for every dollar spent, jump the queue and order via the app for pronto pick-up, locate their nearest T-brewery as well as app exclusive offers and promotions.
Q. WHAT'S KEY FOR SUCCESS IN THIS MARKET?
A: Chatime’s secret to success is in the consistency of our product, with all our drinks served having the same amazing taste no matter what location you visit. Chatime also demystifies the concept of bubble tea, opening it up to others and appealing to the masses. This is reflected in the fact that 60 per cent of our customer base come from non-Asian backgrounds. As well as this, we focus on the concept of freshly brewed tea, making sure to brew fresh tea frequently through the day, with our most popular mix-in being the tapioca pearls cooked fresh every four hours.
Q. WHAT ARE YOUR EXPECTATIONS FOR THE MARKETPLACE IN THE NEXT FIVE YEARS?
A: Our expectations are that the market will consolidate to two to three key players, Chatime of course included. Our goal is set high with the aim to hit 250 stores across Australia. We believe quality operators with good systems will shine through, with fresh iced tea becoming an accepted staple end competitor to other beverages such as juice.
Another growing push in the market is for brands to be more environmentally friendly and reduce plastic waste. Chatime is currently working on Project Happy Turtle, which aims for us to completely eradicate single-use plastic within our stores across Australia. We’ve trialled this through the introduction of reusable bubble tea cups, as well as paper straws across the network.
GOTCHA
Gotcha’s tea ranges are tailored to suit everyone, no matter their age, dietary preference or palate. They include handcrafted collagen teas, milk teas, cheese foam, macchiatos, Japanese-style yogurt and fruit teas.
Gotcha assistant managing director, Christy Chen, says, “As Gotcha successfully combines Asian tea culture with the European salon experience, we invite all walks of life to enjoy the taste of our fresh tea.”
Q. HOW MANY STORES ARE IN AUSTRALIA NOW AND WHAT'S THE TARGET FOR THE NEXT 12–24 MONTHS?
A: Since 2018, Gotcha has expanded to 21 stores across Australia with five new outlets opening before midwinter and another 15 Australian expected to open by the end of the year.
Gotcha is planning to expand to Saudi Arabia, New Zealand and Singapore this year, and is expanding to eight stores in Indonesia.
Gotcha will continue focusing on the interior of our stores to deliver an elevated level of design.
Q. HOW DO YOU PLAN TO EXPAND THE NETWORK?
A: We are currently focused on building strong franchising relationships, mainly in suburban locations. Landlords and shopping centres appreciate the brand’s western design concept and sophisticated offering at a reasonable price point. Gotcha’s offering is fast and convenient, which performs well in heavy foot traffic locations.
By July we plan to open stores at Fountain Gate, Epping, Broadmeadows, Watergardens, Werribee, Sunshine, Chadstone, M-City and Clayton in Victoria. In NSW, a Granville store will be unveiled.
Q. WHO IS THE CUSTOMER AND HOW IS THE DEMOGRAPHIC CHANGING?
A: The Gotcha consumer is aged between 14 and 50 years old.
Q. HOW IS GOTCHA DISTINCT FROM OTHER TEA BRANDS IN THE MARKET?
A: Gotcha has established itself as a connoisseur in the bubble tea market. We believe our strength is in our ability to harvest the highest quality teas, build impressive product ranges and by creating an unparalleled instore experience.
The interior design of all Gotcha salons is a huge element of focus for the brand in ensuring that customers can indulge in the highest luxury and enjoyment of bubble tea.
Our founder, Roger Fu, is exceptional at employing his smarts as a mechanical engineer and industrial designer, having designed a tea brew and quick shake machine that will cool hot tea to a chilled bubble tea in 0.5 seconds. We like to call this the Ferrari motor of bubble tea making and expect this to revolutionise the industry.
Gotcha’s unique machine was created to professionalise and elevate the making of each tea, instead of traditional handshaking, which can standardise the quality of the drinks.
Our brand strategy is built on the promise of providing a high-quality tea experience and education for the discerning bubble tea consumer. Gotcha remains unparalleled with rigorous quality control, from leaf to cup, with our tea being farmed and picked from our own plantation to ensure the highest quality ingredients for each customer.
Q. WHAT’S KEY FOR SUCCESS IN THIS MARKET?
A: We credit our success to two branches, entrepreneurship and innovation, which we believe stem from the creativity tree, that when combined create a business model that will flourish.
We are always working towards enhancing our products, working towards a sustainable future, maintaining jobs for our employees, and maintaining the quality of our tea.
Q. WHAT ARE YOUR EXPECTATIONS FOR THE MARKETPLACE IN THE NEXT FIVE YEARS?
A: As coffee and tea are beverages consumed across the world, we are very confident the bubble tea market will continue to grow, especially as we expand into international regions. There continues a great buzz among the trends of the food and beverage industry, with boba balls, full leaf tea, high-quality milk and sustainable packaging showing no signs of the interest dwindling away.
We are committed to enhancing our bubble tea experience and taking Gotcha to the next level through strategic planning, innovation and expanding our beverage options to suit all consumers.