EP65 – The Impulso Podcast – Will health labels reduce bubble tea consumption? 

Is Shanghai mirroring Singapore’s nutritional labelling approach? 

Recently, Bawang Tea Ji’s (Chagee) Shanghai store has introduced a “Nutritional Choice” logo on all its beverages – a first for freshly-made drinks in China. This mirrors Singapore’s Nutri-Grade ratings (A to D), implemented by the Health Promotion Board, from December 2022, which were introduced to increase consumers’ awareness, and help them make healthier choices. 

But do these labels actually change consumer habits? And are they a hindrance to the bubble tea business, or do they push for product innovation?

Tune into our latest episode for a light-hearted discussion on the impact of these nutri-grades on consumer habits and business operations:

Featured materials

Who is Mixue?, Momentum Works 

Bubble tea in Southeast Asia, Momentum Works  

[AI-generated transcript]

[00:00:00] Sabrina: Hello everyone, and welcome to episode 65 of the Impulso podcast. So today, Janggan and I are actually going to be talking about something a little more interesting. So we’re going to be talking about bubble tea, and more specifically, having nutritional logos on bubble tea. 

[00:00:16] Jianggan: 65, that’s the country code of Singapore.

[00:00:18] Sabrina: Oh, yeah. Oh, what a nice episode and bubble tea is the national drink of Singapore. So this episode is actually 

[00:00:25] Jianggan: It’s a national drink of any country that I’m aware of in Southeast Asia. 

[00:00:28] Sabrina: So it’s a well timed episode. So recently Chagee in Shanghai has added a new nutritional choice logo to all its beverages.

And this is something very similar to what we’ve seen in Singapore, right? So it seems that Shanghai seems to be copying Singapore in terms of nutri grade labels. 

[00:00:47] Jianggan: What is the sugar grade label? 

[00:00:49] Sabrina: So Nutri grade labels is a set of ratings, so the ratings go A, B, C, D, and they were introduced by a government agency, the health promotion Board in Singapore, as a set of thresholds for sugar and saturated fat content in beverages.

So since 30th of December, 2022, all pre packaged drinks, as well as drinks from beverage dispensers were required to have a nutri grade labeling. And from 30th of December, 2023 onwards, these requirements were of course extended to freshly prepared beverages, such as bubble tea, coffee, tea, even At the hawker centers that we have, the tea and coffee that you buy, they all are required to have this label as well.

And of course, it’s not just this label. So for example, for drinks that have a C or D rating, this nutrient grade mark is mandatory. And for drinks that have a D rating, they are actually prohibited from advertising. 

[00:01:46] Jianggan: So D rating are the drinks with a lot of sugar. 

[00:01:49] Sabrina: Yes, they are the drinks.

So some example, I think Dr. Pepper is a D rating. 

[00:01:53] Jianggan: What’s Dr. Pepper? I mean, you are Dr. Pepper, but I don’t know any of the brands. No, no, 

[00:01:57] Sabrina: Dr. Pepper is a soda. It’s a soda? Okay. Yeah, it’s a soda from America. I’m pretty sure Coca Cola has a D rating as well. Probably Sprite has a D rating as well. So these are the drinks that are currently prohibited from advertising.

[00:02:10] Jianggan: Interesting. I remember a few weeks ago I was talking to a senior executive of a major beverage company, beverage like a chain in China. He was visiting Singapore and he, he saw all this freshly implemented nutrient grade ratings at the bubble tea shops, at coffee stores. He said, Oh, I wish I had the same in China. and of course now that he’s been implemented out it’s been rolled out. So I asked him why, so he said, doesn’t that, I mean change people’s behaviour, make people consume less of your products? 

He said something interesting. He said I, I think If I were to unilaterally reduce the sugar level and fat level in my drinks while my competitors are still doing that, that might make my products less competitive.

Because I mean, this kind of, you know, fat, sugar content actually make some drinks addictive. If the government creates a common standard I don’t think that’s going to reduce the amount of drinks that people consume overall, but it creates a level of play field for, for me, for him, right? Because he believes that his R& D capabilities of rolling products, which have better taste and and good flavoring. But still can reduce the sugar and the fat levels. He said, I mean, if the government mandates that, then we’re competing on product innovation. We’re not competing on like just adding more sugar or whatever. So that’s good for me. 

[00:03:39] Sabrina: Is there a reason why, for him, he wants to, as a business, create products with less sugar if they won’t sell as well with consumers?

[00:03:51] Jianggan: I mean, it still goes back to the point that he thinks that I will not name which company that is. But but he believes that they have very good research and development capabilities. They can create products better than their competitors. But now, I mean, if, if. You’ve better miss adding more sugar. I don’t think he can actually demonstrate that advantage well. 

[00:04:11] Sabrina: And I think we see that consumers are changing as well, right? I mean, I don’t know if these nutrient grade labelings help, but we’ve seen that a couple of months ago, HeyTea also revealled the ingredients in their drinks to show consumers that it’s healthier.

So I think these brands are realizing that consumers are looking, consumers are becoming a lot more concerned about their health. And of course, like you said, this grading system can help level the playing field for everyone. 

[00:04:39] Jianggan: We don’t, we don’t have specific insights of how exactly that is impacting the consumer behavior. I think individual players will know it better. We hear that consumers are voicing their sort of concerns and stuff on social media. And and of course their, their views about drinks sort of how healthy they are or how unhealthy they are. I’m sure that’s impacting their behavior to a certain extent, but by how much, we don’t know.

You are a daily bubble tea drinker. 

[00:05:05] Sabrina: So for context, I drink bubble tea maybe three to four times a week. So that’s almost every day. Almost every alternate day. I used to drink bubble tea with milk and 50 percent sugar. So to me, that was already cutting my sugar because I realized that I drink. 

[00:05:24] Jianggan: So you were conscious, right?

I mean, you look at the options like 75, 50, 25, and you choose for 50. I choose 50 because I feel like that’s a 

[00:05:33] Sabrina: decent amount of sugar for it to still taste well. Recently on my way to work, there’s been this big advertisement on this nutrition, Nutri grade rating and it basically tells me how much sugar and fat is in all my bubble tea that I’m drinking.

Even at 50%? Even at 50%. So I think 50 percent with milk is still a C rating. 

[00:05:56] Jianggan: Okay. 

[00:05:57] Sabrina: So I have cut my sugar level down recently to 25%. 

[00:06:02] Jianggan: Which gives you a b 

[00:06:04] Sabrina: I’m hoping, but that’s the thing, right? So for most of these brands and drinks for the standard order, they have the rating there. Okay? But if I order, if I were to order at 25% or 50%, they don’t tell me what the rating is.

Mm-Hmm. . So even as a consumer, it’s not very clear if I’m actually making a better choice or I’m just making myself feel better. 

[00:06:25] Jianggan: What makes more sense to you? I mean, I mean your objective is to at least make yourself feel better, right? Because otherwise you will not stand. 

[00:06:33] Sabrina: Yeah, but there is no like, it’s not proven that drinking 25 percent is actually much healthier, which I think is a problem with this grading system in that because bubble tea is quite customizable, a lot of brands have now allowed consumers to choose your sugar level.

The toppings that you want to add right but this logo is for the standard default drink 

[00:06:56] Jianggan: I think I think it’s hard for government to exactly enforce on different kind of combinations and stuff And and sometimes it also depends on I mean for many brands which are not exactly Exactly standardized. We, I mean, we add like one extra drop of syrup or, or one less drop of syrup.

I, to a certain extent, I’m not sure whether, how much this is this is the effort to, really impact individual sort of sugar consumption individual. But I do think the aggregate value, right? I mean, now you are probably consuming like half the sugar that you used to consume. So overall, I think it’s still good for the society that reduces the sugar.

Therefore, I think the government will probably monitor the data very closely. And for that to translate into the more sort of direct metrics like diabetes and stuff will probably take years, but you know, I think But I think sugar consumption in the society as a whole is something which is relatively easy to measure, right? I mean, are we reducing the total sugar consumption in the society, in people’s diet? 

[00:07:55] Sabrina: And I think of course it’s up to each individual consumer, right? I mean the ratings are there, you know, if it’s a high rating, you can order less sugar, you would feel better about yourself and you probably are going to be taking in a lot less sugar as well.

So I think it’s a good guide for consumers who want to make a healthier choice. 

[00:08:15] Jianggan: Okay. Does it make you consume less? Like less amount of cups, or is it still the same? I do think that the motivation of you to, or any consumer to consume this kind of beverage is not that they want to be healthy, right?

It’s for something like, maybe it’s routine, maybe it’s some kind of emotional appeal. 

[00:08:38] Sabrina: For me, it’s just Cause I like the taste of the drink, so it makes me, at the start of the year, I told my colleagues that I would only have one cup of bubble tea a week in a month I failed and now I’m at four cups a week, so, I don’t know why.

[00:08:52] Jianggan: Compared to last year, last year was still four cups? 

[00:08:54] Sabrina: Yeah, last year was probably three to four. Last year I drank a lot of Starbucks. Okay. But I’m trying to. 

[00:09:00] Jianggan: Starbucks, what? 

[00:09:01] Sabrina: So I drink a caramel frappuccino from Starbucks, which I’m pretty sure is a D rating as well. 

[00:09:06] Jianggan: Which is still like, you know, a mixture of caffeine and the fat and the and the carbohydrates.

So just put it down. 

[00:09:13] Sabrina: But bubble tea is a lot more customizable. So it’s a lot easier to order, like, 25 percent sugar level as compared to Starbucks, where I have to reduce the number of pumps of caramel, right? Mm hmm. So I don’t know. I think for people, it’s one it’s convenient when you’re at work. I mean, opposite our office, there’s so many bubble tea stores and two, it’s just, it’s like a comfort drink.

So I think a lot of people in Southeast Asia, bubble tea is a comfort drink. It’s something you started drinking since. 

[00:09:41] Jianggan: Just like fried chicken is a comfort food for lots of people. Yeah, so 

[00:09:44] Sabrina: it’s, it’s just out of habit. Do you drink bubble tea? 

[00:09:48] Jianggan: I drink black coffee. And I was speaking to that senior executive for a coffee chain in China.

He was telling me that if everyone’s like you then our business will be much better because of course black coffee is much easier to prepare, right? You don’t, and for people who do drink that regularly, it’s still a habit that you take every day. So no, yeah. So I don’t really drink bubble tea unless that there’s the group buy in office, which is, which is, which is a very nice. Usually the, the, the organizer and the chief culprit for that. 

[00:10:19] Sabrina: It’s a sharing the carbs, you know. And it makes people happy, right? Yeah, it cheers everyone up on a tiring day. But even for coffee, so the I mentioned there’s this like advertisement on my way to work, right? Even for coffee, they have these Nutri grade labelings.

Which is interesting because generally I think to set some context, coffee that you buy from the hawker centers in Singapore, they are quite sweet. I’m pretty sure they are a C or D rating, so they are trying to encourage people as well to cut down the sugar that they drink when they drink their coffee.

So it’s interesting, and I guess we’ll see if more stores start to employ this nutritional choice logo, it’s what it’s called in Shanghai, to their stores. 

[00:11:01] Jianggan: I do think that if first I think the government is probably testing what they should enforce that , because health and special diabetes is a big issue for, for many countries maybe less so in China by now, because because the whole country was was exposed to sort of FMCG and carbonated drinks much later compared to many parts of Southeast Asia.

And when in 1990s, people started consuming this kind of FFCG products after opening up, but still that’s like 30 years, right? So, so lots of, I remember my cousin growing up in China, he was super, I mean, he was like, he was born in 1988 and he was super addicted to Sprite when he was like 10 years old and not a level of you know like daily drink replacing water, but he was still consuming lots of Sprite.

 And now he actually. I mean, he’s like mid thirties, kind of regrets that he said it had, I had too much right when I was a kid, but, but the thing is that if you just purely rely on people’s will, just like Sabrina, right? She wants to consume one cup a week and now. In the new resolution, now it’s barely like, you know, in the first quarter it has only gone back to four quarters.

I mean, people want this for the emotional appeal. People want to be comfortable. And the question is that, how do you make them more informed and what they make choice? Sometimes we are aware, you realize that, okay, something which is a bit lighter makes you feel light, right? I mean, it’s not so fat ish and it still makes you feel good.

[00:12:28] Sabrina: That’s true. 

[00:12:30] Jianggan: , so Chachi, I think in China, they’re also working with a fitness sort of tech player called Kip to, promote this kind of message that, okay, you can be healthy and you can still enjoy the daily indulgence of of, of a, I don’t know how to call that anymore. 

[00:12:45] Sabrina: Your daily dose of happiness.

[00:12:47] Jianggan: Daily dose of happiness. Yeah. 

[00:12:49] Sabrina: So I think this will be, it’ll be interesting to see how this progresses and it’s, it’s Not just this logo, right? I think, I mean, bubble tea is really, really popular in China and we see that brands are coming up with healthier choices. A lot of them are focusing on just pure tea with less sugar options, which consumers seem to like as well.

So I think this is the trend. And of course, like you mentioned, we’ll see a lot more product innovation into how to make tasty drinks that give you your daily dose of happiness, but still making sure that consumers can stay healthy. 

[00:13:20] Jianggan: Actually, a more sort of operational question. So when people say, say that, okay, I add like 25%, 50%, what exactly are they adding? It’s like one drop of syrup versus like four drops of syrup or? 

[00:13:32] Sabrina: I have no idea, but I do think it’s the amount of syrup because they’re not directly pouring sugar into your bubble tea. Yeah. So it’s probably the amount of syrup that they’re adding because same for Starbucks and I guess other coffee chains. When you order like a vanilla latte or caramel latte, less sugar would just mean reducing the number of pumps of caramel syrup, 

but for the hawker centers, like the legit black coffee, 

I would think that is reducing the amount of sugar because have you ever seen the amount of sugar that they put in a cup?

[00:14:11] Jianggan: I saw, I mean, I, I don’t drink that often, but whenever I order that observe, I mean, how they prepare it, right. It’s just, 

[00:14:19] Sabrina: it’s a big spoonful of sugar. Yeah. And also, 

[00:14:24] Jianggan: I think it depends on the preference of the guy preparing for that so that you have different sugar levels at different stores. Some of them just add sugar.

I mean, have a bigger spoon, then they add more and and of course the level of condensed milk is also different. So,, but I think overall this initiative is getting people to to be conscious about that and to make a choice. I mean, even if it’s reduced by half, I think aggregate to the society is still a big benefit.

Do you think that other governments should copy that? If they can enforce it, I mean, Singapore, they don’t need to enforce it. Are they enforcing it? 

[00:14:56] Sabrina: They are. So it’s enforced now. Everywhere you go, you would see it. The supermarkets, any beverage store you go to, generally it’s there. I think it would be interesting for more governments to enforce this.

Just, you know, I think you can’t control how consumers behave, right? But it’s good to give them an option or at least make, allow them to make more informed decisions about what they’re actually drinking. 

[00:15:22] Jianggan: So, so I was talking to one of the major bubble tea and ice cream, , chains in Singapore. And what they told us is that from operational point of view, initially was a big headache for them to figure out.

I mean, it’s like an administrative effort, right? You have, you have like, I don’t know, 30 products on a list. You have to figure out exactly which one goes into which category and that has to be auditable, right? So, so that’s a one time effort. And afterwards they said that, that they haven’t experienced any inspection from the government, but I suppose there’s something similar to like driving in Singapore, you don’t see police enforcing that, but most people will still ab by the rule.

Yeah. And the police will selectively sort of conduct inspections. And and, and if, as you said right, it’s just the number of like pumps people, people get into it. So from, from from operational point of view, it doesn’t really impact. It doesn’t really add operational complexity to the preparation of the drinks, so for the players, I think, I think it can be positive, right?

I mean, the consumers feel happier about the drinks they consume. 

[00:16:27] Sabrina: Maybe they’ll consume more, because they’ve convinced themselves that they’re drinking a healthy amount of sugar. 

[00:16:32] Jianggan: They can drink two cups to, to, to the same amount of sugar. It’s 

[00:16:35] Sabrina: like two cups of 25 percent versus one cup of 50%. 

[00:16:39] Jianggan: Yeah, I think it’s an interesting experiment and it gets people to I think the players are probably monitoring the data very closely.

I do think that it’s probably good for industry unlike many, many had concern before saying that, Oh would get people away from us. 

[00:16:55] Sabrina: And I think it forces product innovation, right? It forces these companies to really find other strategies to get people to buy their drinks besides just adding sugar and syrup.

[00:17:05] Jianggan: Which is good, which is good. But I’ll stick with my black coffee. I don’t know, I don’t need caffeine, but I just get into this habit. It’s a habit, right? It’s a habit, right? So I 

[00:17:15] Sabrina: don’t need the sugar, but it’s just a habit. 

[00:17:17] Jianggan: I don’t need caffeine, and even if I drink like a double espresso before, like, But at the time, I could still sleep, so I don’t know.

[00:17:25] Sabrina: I think it’s just more of a habit at this point, it’s a source of comfort a day, right? So yeah, it’s interesting. True, 

[00:17:31] Jianggan: true, true. The aroma makes me happy. Yeah, smelling. 

[00:17:34] Sabrina: It will be interesting also because, you know, we always say people like to copy things from China. And for once, China might actually be copying something from Singapore. 

[00:17:42] Jianggan: Well, China has always been copying things from Singapore, from CPF to a lot of policies. But, but I think recently in terms of, in terms of this kind of concepts and , and models, which, which actually actually have aggregate public policy kind of implications.

So it’s interesting to see that that Singapore, I mean, being a small country with a good execution from the government and continuously innovate and, and other, other countries can look at what has transpired and learn from it, which I think is good. 

[00:18:14] Sabrina: And of course, I mean, Implementing it, I think that would be a little bit more different, right?

Singapore is so much smaller than so many other countries to actually implement this successfully and making it compulsory or preventing advertising. I think it’s something that would be interesting to see how other companies implement it as well. 

[00:18:34] Jianggan: Oh I think I do think that there might be some complication for, for some companies, which you know, you know, Mixue, right? The largest bubble tea chain in China, 

[00:18:44] Sabrina: which we recently launched a report about their IPO prospectus. 

[00:18:48] Jianggan: Yeah. Yeah. Check that out. So they have 36, 000 stores. So they have, they have a sub brand called lucky Cup. Yeah. So which is coffee brand. And and initially they have the process of, you know, just give you the coffee and give you two pouches of sugar.

You go and add yourself. Then it was very interesting. They realized that this, this is operationally inefficient and cost wise inefficient. And then they started doing this, this, this automatic mixture. of adding like two drops of syrup into each coffee by default. And if you ask not to be added, they have to adjust the process because they said most people still want the syrup.

And I think for them, there’s a bit of, I mean, if this is enforced, there’s a bit of operational adjustment, but I think overall is still positive for the industry. 

[00:19:33] Sabrina: Yeah. And then it’s, I mean, it’s good for the industry and it’s good for consumers. So it’ll be interesting to see how this goes. So thank you guys for tuning in to another episode of the Impulsa podcast.

We hope like Friday one, apologies. That’s a little late, but we hope you guys do enjoy today’s episode. It’s a lighter and much more fun topic. If you did do like our podcast and follow us on Spotify, Apple podcast, or your preferred podcast platform to stay up to date on the latest happenings and trends in tech, new retail and the broader digital economy. And of course, sometimes we make fun episodes like this.