In light of the increasing scarcity of tapioca pearls, many local businesses are under pressure to let staff members go and potentially close down. Boba tea is their main selling point and without it, their profits are set to be on the decline. Furthermore, with some storeowners noting that sales have drastically increased due to the pandemic, as boba shops happen to be one of the few available "entertainment" options, the decline in supply in face of this increase in demand makes shortages an even greater issue. Distributors of tapioca pearls are making an effort to avoid referring to the current situation as a shortage in hopes of avoiding rationing, which would worsen the issue.
It would be unsurprising to see boba prices rise due to a decline in supply as well as the high demand. While some businesses and distributors have enough tapioca stored to last for a while, others have already begun to struggle. However, this issue is one of many arising due to the effects of the coronavirus globally. Shipping has slowed a great deal due to safety precautions, and the recent blockage of the Suez Canal has further slowed already delayed supply chains. We are already beginning to see what will likely be the long-term effects of the coronavirus on the global economy. From the immediate loss of jobs and businesses due to shutdowns to delays in global trade networks, the novel coronavirus will have a lasting impact across the globe.
https://www.nytimes.com/2021/04/16/business/boba-shortage.html
https://www.sfchronicle.com/food/restaurants/article/Boba-shortage-Bay-Area-and-the-rest-of-the-U-S-16097585.php
4 comments:
This issue reminded me of an inquiry we had about the trade off between economic growth and public health during the pandemic. Shipping can be sped up at the cost of some degree of public safety. The current boba shortage indicates that public health is being valued higher than the import/export of goods like boba. Boba is not a necessity, so this ranking of priority makes sense. There are also different alternatives to boba that consumers can purchase instead.
The people who will be hurt the most due to the shortage are probably the people working at the shops running low on boba. Like mentioned in the blog post, some businesses have enough boba stockpiled to last for a while, which means that consumers who want boba are likely to turn to these businesses and avoid shops that have run out of stock. Unless these shops have high customer loyalty or are able to find a popular substitution for boba, they are out of luck. As for businesses who still have boba stockpiled, they can get away with charging higher prices for the amount they have left.
Somethings in life are just meant to be. I was never a big fan of boba myself and maybe this decline of the boba industry will give way for the next trendy sweet. Maybe frozen yogurt will make a comeback. I feel like ever since we lost Nubi yogurt in foster city, everything in life has token a turn for the worst. Looking at the big picture though, it is not a good thing that there is a backlog on shipping. The lack of la or is a basic supply and demand chart. Employers need to raise the wage in order to attract more laborers to man the cargo docks. In the mean times, the shipping industry is forced to supply less than what is currently demanded. Maybe this is why my telescope is taking so long to ship. I ordered a telescope 5 months ago for Christmas and it is still on back order. Corona virus has surely messed up the supply chain, but hopefully we will learn from our weaknesses to be better prepared in the future.
With boba being the main product that many people go to stores to buy, it is most likely that places that just sell boba will lose a large part of their customers if the boba shortage is bad enough. However, there are many stores around that sell much more than just boba, which will not be hurt as much. As someone who works in a store that sells both boba and desserts, our store has had to start selling new products like waffles or different types of drinks and offering promotion in order to keep a steady amount of customers. However, it isn't a completely lost cause, as there are many people who also enjoy the alternative toppings other than boba. I expect many places that just sell boba to start to try to sell new products and/or offer promotions in order to keep customers coming.
I think this incident shows the fragility of the supply chain and how the ship getting stuck will have a large impact on businesses. Many people go just for boba to these shops and although there are other toppings, I agree with Tim. Many vendors will loose a big portion of their clients which is unfortunate since a lot of boba places tend to be small businesses not chains.
I am surprised there hasn't been news of any other shortages happening because of the incident.
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