- Sales of Starbucks' boba-inspired "popping pearls" drinks have been booming, its CEO told investors.
- The company even had to cut back on marketing because high demand triggered shortages, he said.
- Overall Refreshers sales rocketed after the launch of the pearls lineup.
Starbucks' boba-inspired "popping pearls" drinks have been selling so well that the coffee chain had to cut back on marketing after supplies ran low.
Starbucks added the drinks to its US menu in May. The new lineup features three drinks — the Summer-Berry Lemonade Starbucks Refreshers Beverage, the Summer Skies Drink Starbucks Refreshers Beverage, and the Summer-Berry Starbucks Refreshers Beverage — but customers can also add the raspberry-flavored popping pearls to other beverages.
Sales of the products were "significantly ahead of what we thought it would be to the point where we ran out of supply," CEO Laxman Narasimhan told investors on Tuesday.
"And I think that it wasn't a supply issue necessarily, but it was more, the demand was ahead of what we thought it would be," he continued. "We had to pull back marketing, and my sense is that as you look at what we now have in our stores, they're back in stores with new products and it's a platform that we will continue to build over time."
Narasimhan said pearls had had the highest launch-week sales of all new product at Starbucks. They also contributed to overall sales of Starbucks' Refreshers drinks reaching an all-time high during the quarter.
Many customers have been adding the pearls to other Refreshers beyond those included in the core pearls lineup, two baristas told Business Insider.
"We go through them pretty fast," one Starbucks barista in Cape Cod, Massachusetts, told BI of the pearls. The barista's employment has been verified by BI but they have been granted anonymity to protect their employment.
Customers "definitely like" the pearls lineup, they said.
Boba, also known as bubble tea, is a Taiwanese drink that's served cold and typically made with milk, tea, and chewy tapioca pearls.
It's a booming business in the US, especially among Gen A and Z consumers. Dedicated boba stores offer a huge variety of flavors and toppings, like fruit, grass or coconut jelly, red beans, brown sugar, and pudding.
Starbucks has never described its drinks as boba, simply calling them beverages "with pearls." Rather than the traditional chewy tapioca, Starbucks makes its drinks with popping pearls — also popular at boba chains — and none of the beverages on Starbucks' set pearls lineup appear to contain tea.
"It's not real boba," the Massachusetts barista said. They added: "The people who like real boba probably wouldn't like it as much."
The success of Starbucks' boba comes as the chain continues betting on cold drinks, which made up 76% of its beverage sales in the quarter. This includes its new iced energy drinks, which it launched in late June.
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