CoCo Fresh Tea and Juice is a striking instance of the pace and extent of innovation in tea products, markets, and customers across the globe, especially in Asia. It began in Taiwan in 1997 as a bubble tea brand, distinguished by its in-store preparation of drinks and global procurement policy of top-quality fresh fruits and whole leaf tea.
It is now a giant, with more than 4,000 stores in Japan, Thailand, Australia, the UK, and North America. CoCo claims to be the world’s largest fresh tea seller. It entered the Philippine market in 2013 and has expanded its product range to include milk tea, fruit teas, and flavored traditional teas, such as grapefruit green and matcha latte. Milk teas are typically cold and increasingly diverse in ingredients and flavors, going beyond the bubble teas from which they have evolved. They add to the market segments that have emerged to reposition tea service and marketing: kombucha, cold brew, matcha, etc.
CoCo’s latest growth initiative is to build on its position in the Philippine market, where it is, by far, the trendsetter and hottest brand. It opened its first store there in 2013 and has expanded rapidly to close to 40 outlets. The bubble tea market was stagnating, and it was and remains the freshness, flavor variety, and fruit that differentiates its products.
CoCo’s growth parallels that of innovators across Asia. CoCo, Chaayos and Chai Point (India), TWG (Singapore), T2 (Australia), and Sakurai, Oharaka and Saryo (Japan) all aim at redefining the experience through ambiance and design of stores and a direct appeal to younger buyers’ focus on hot trends, fresh and natural ingredients and variety of products.
The general manager of CoCo, Larry Evans Tan, summarizes the strategy: “We cater to almost every market but the bulk we see are the influential cluster.” [Social media influencers are a commonly cited instance.] “This is the group that values a good experience, good aesthetic, and the product as well. It’s usually the younger market that is quite exposed to global brands.” One review of CoCo captures the branding and global dimension common to the new competitors’ offers as “affordable luxury.”
The Philippines ranks 48th out of 54 countries in traditional tea consumption per capita (2016 figures), at just a negligible ounce per year (0.03 kilos). This is a tiny fraction of average consumption across Asia: Japan 1.00 kg), Singapore (0.40), India (0.33), and South Korea (0.20). The figure for the US is 0.23 kg per annum. The top three countries, Turkey, Ireland, and the UK are in the 2-3 kg range.
The message here is that any region now offers growth opportunities for tea. The CoCo mix – experience, ambiance, freshness, variety, and natural ingredients – is a signal of the style of innovation that is building new markets across the globe. When even the Philippines becomes a hot and trendy tea market, the possibilities are seemingly unlimited.