The former Taiwan chain beverage shops originated from bagged ice tea that were sold on the streets by traditional vendor carts and tricycles back to 1960. During 1980-1990, the Spring House and Yao Valley International commerced sit-down tea houses. With the choice of general sitting and private compartment, they offered the general public a gathering place for a cup of tea; often, side dishes were together served on the table. The tea leaves were commercial grade and came from economic tea farms.
Since 1990, to-go beverage prevailed and it wasn’t till then that Taiwanese bubble tea culture flourished in the society.
In light of intensified competition and high entry barriers from the first movers, beverage shops with little brand recognition can hardly survive nowadays. Yet even long established brands face a hard time and have to fight against small margin in this zero-sum price game. The profit of beverage shops will only decrease in the future. If a Headquarters does not establish its own central kitchen, it can not supply products to to its franchises. Consequently, the franchisors would not have enough cash capital for developing new products and making the payroll to its employees, leaving only the Headquarters financially capable of keeping in operation.
If the Headquarters does not adjust the old selling practice towards in-house development, the business could barely survive in the market. Clever Central Kitchen from Sunshine Energy has assisted chain tea shops in establishing their own central kitchens which complies to food safety and hygienic regulations. The establishment of a central kitchen offers a chance of higher profits and a homogeneous quality across branches. The establishment also helps the Headquarters to migrate its role from a supplier to a producer. With the in-house R&D, the Headquarters is able to market new products with new features on the continuous basis. Together with the consistent quality across branches, the establishment of a central kitchen ensures a homogeneous quality and provides an overall higher profit.