How Bubbleology cracked the competitive bubble tea market

Assad Khan, CEO, explains why expanding store footprint is not a priority.

With the bubble tea market shifting towards more mainstream, making it a "numbers" game is not the best strategy, according to Bubbleology CEO and founder Assad Khan

The brand anticipates that it will grow to more than 50 outlets by the next 12 months, however growing their estate just for the sake of growth and without considering how it affects the brand's equity is not a sustainable strategy in the long run. 

This is why Bubbleology opted for a different approach, having identified a new revenue stream as more consumers became interested in being able to enjoy bubble tea in the comfort of their own homes.

To leverage this rising trend, Bubbleology created a home brew kit to make their brand more accessible to UK households.

In a quick Q&A with Assad Khan, CEO and founder of Bubbleology, he talked about how FMCG products expanded their business, his thoughts on the current bubble tea market, and other industry trends he is keeping his eye on.

QSR Media: Could you tell us the story behind the Home Kits? How was it conceptualised?

Assad: The aim of the Bubbleology Home Kits was simple – to make bubble tea accessible to every household in the UK. We noticed through our focus groups that many of our customers wanted to make bubble tea easily from the comfort of their home, and so this was the driving force behind the development of the home kit. Early on, we mastered the taste profile and manufacturing processes of the essential components by leveraging our key relationships in Asia. However, we knew that we needed to partner with a leading UK food & beverage company to successfully collaborate and execute the concept in the market – this is why we entered into the strategic partnership with Aimia.

Why did Bubbleology decide to expand its brand to include FMCG products?

Every major drink and dessert category has an at-home FMCG product, but we knew that bubble tea was lacking in retail, and so this was a natural brand extension opportunity. The UK bubble tea market has considerably evolved over the years, with most customers now being aware of it, and so the market was ripe for the FMCG expansion. We trialed our initial home kit concept with several focus groups, with the reaction being overwhelmingly positive. We quickly realised that consumer demand would be significant. However, in the first few weeks of launching into the supermarket aisles, the demand was even greater than our most optimistic projections, and we’ve only just scratched the surface of the potential in the FMCG category!

Why choose Aimia Foods to partner with?

Aimia is a leading food and beverage company with a phenomenal entrepreneurial culture and a truly inspirational leadership team, which is exactly what we needed to fully maximise the brand’s entry into FMCG.

The partnership was the perfect blend required to make the home kits such a success. Bubbleology brought nationwide brand recognition, market experience, and an authentic ingredient supply chain to the partnership, while Aimia leveraged its position as a market-leading multi-channel manufacturer and distributor with first-class execution and collaborative brand engagement. The success of the home kits was underpinned by this partnership, and we look forward to working in partnership with Aimia to expand the range within the UK market.

How do home brew kits work? How is this different from others in the market?

The home kits include all the elements to create your perfect at-home bubble tea. The milk tea kits include tapioca sachets that can be quickly prepared in the microwave, which are added into the flavoured milk tea blend mix provided, with the concept allowing the consumer to choose plant or dairy milk. The fruit teas include popping boba, jasmine tea, and flavour blends. Our at-home kits all come with easy-to-follow instructions for a freshly made bubble tea in under three minutes. We also encourage customers to make their bubble tea their own way using our kits and have even provided exciting new recipe videos on our website on unique versions such as coffee latte brown sugar and raspberry vanilla fruit tea floats.

Whilst bubble tea kits have been in the market, many of these are overly complex and lacked authenticity in quality, texture, and taste. They also have not been easily accessible to the consumer at an affordable price point, and are not tried and tested recognised high street brands. Our product is competitively priced in the supermarket aisles, and we also offer multi-pack boxes which are great for gifting to those who love bubble tea. All of these factors have been the key differentiators for Bubbleology, leveraging our intimate knowledge of the UK market and ensuring an authentic at-home experience from a national established brand in operation for well over 10 years.

Can you elaborate on the selection process for the ingredients included in Bubbleology's home brew kits, and how do you ensure quality and authenticity?

The selection process for the ingredients in the home kits was extensive as we worked to ensure that we were genuinely replicating the Bubbleology experience at home. We took an exhaustive quality control approach ensuring the exact flavour profile, consistency, and texture from our flavour bases to our tapioca pearls is achieved for every home brew to the high standards our consumer base is accustomed to in our high street stores.

The flavours and ingredient components used in the home kits are sourced from the same partners in Asia that we use in our store network to achieve authenticity. We also ensured that the chosen flavour options for the home kits were based on our most popular and best-selling within our stores, resulting in no consumer missing out at home!

How have the Home Kits affected the brand's performance?

The home kits have been game-changing for the forward growth of the business. They have enabled immense scalability of the brand and allowed for the potential launch in further territories, which is part of our future plan. Through partnering with Aimia, we’ve launched our home kits into 1500 retail locations across the UK in just 10 months, and between both our home kit sales and our high street sales, we are now projected to serve 8 million Bubbleology bubble teas this year, in and out of the home, increasing the brand's footprint exponentially.

What about in-store? Can you share some new happenings with your in-store growth? How many stores does Bubbleology currently have, and what is the goal this year?

We currently have 42 stores within the estate and anticipate growth to over 50 stores in the next 12 months. However, we always take a careful approach when it comes to store growth, and it has never been a "numbers" game for us – we would rather launch strategically identified sites that positively contribute to brand equity rather than a mass high street approach which brings with it downside risks. As well as estate growth, we’re always focused on new exciting drink flavour launches as well as collaborations with well-known high-street brands. Furthermore, following the immense success of our FMCG division, we’re working to create further exciting synergies between the high street stores and the developing retail range.

How do you see the bubble tea market in the UK evolving?

The bubble tea market has exponentially evolved since we first started out – once claimed to be a ‘fad’ or ‘trend’, bubble tea is now entering the mainstream. We predict that we will soon see well-known high-street food and drink brands adding bubble tea offerings to their menus. For FMCG, we expect Bubbleology home kits to take an increasingly dominant role in the tea aisles nationwide with incredible scope for growth.

Any challenges in the market you are keeping an eye on? How are you navigating the market?

Our main focus is managing the challenges that come with success, which is primarily ensuring supply chains can keep up with demand. This means being constantly proactive on production and shipping lead times, the latter of which has been volatile recently. Moreover, becoming the market leader in the bubble tea FMCG category in the UK now means we need to constantly innovate and stay ahead. It is all too easy to focus on the current success while neglecting the important future challenges of constant innovation.