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Market Sizing Question – How many cups of boba are sold each year in the US?

By December 29, 2021February 6th, 2022No Comments

How many cups of boba are sold each year in the US? 

There are many different ways to approach market sizing questions. This is just an example of how you could solve this problem. If you are unfamiliar with market sizing questions, check out a quick explanation here.

Steps and Explanations: 

1. Assume that there are 320 million people in the US. 

In this example, we’re using the top-down approach which is starting with a large number and then breaking it down. In this case, we will start with the population of the United States, approximately 320 million, to begin our market sizing. Remember, the true US population is 330M+, however, we will use 320M because it is easier to perform rough calculations for mental math with no calculator.

2. Segment the population 

Because Boba consumption varies greatly by age demographics, it is important to segment our population to get an accurate answer. We will first assume that the average lifespan is approximately 80 years old. This stat is a great fact to remember for market sizing questions that deal with population and age demographics. The most common way to segment age demographics is by using 20-year age brackets like this: 0-20, 20-40, 40-60, and 60-80. Doing so means that each age bracket represents approximately 25% of the population.   

Age Group# of PeopleBoba DrinkersBoba/WeekBoba/YearTotal Bobas

Once you have segmented, use a rational approach to decide how much Boba is consumed by the average person in that age demographic. Basing your estimates off of your personal experiences or observations is a great approach! For example, you could say “I know that many of my high school friends love to drink Boba”.

3. Figure out the proportion of each age group that drinks boba.

This is where you’ll draw from personal experience which makes for a logical approach when answering market sizing questions. To emphasize, the purpose of market sizing is to test your logic, not the correctness of your answers. 

0-20: From personal observation, kids don’t drink boba until they are around the age of 10. But once they are in their teens, boba is an incredibly popular drink, so I’d assume that 50% of the population in 10-20 drink boba. 80M people divided by 2 equals 40M people multiplied by 50% who drink boba = 20M boba drinkers between 0 and 20 years old.

20-40: In my experience, fewer people in this age demographic drink boba, but it is still relatively common. We can assume that 20% of this age group drink boba. 80M people multiplied by 20% who drink boba equals 16 million boba drinkers between the ages of 20 and 40 years old. 

40-60: Boba is quite unhealthy and contains a lot of sugar. It is also a trendy drink among younger demographics. Because of this, we can assume that significantly fewer people between the ages of 40 and 60 drink boba. I’d assume that only around 5% drink boba which is 4M boba drinkers. 

60-80: Once again, boba is not a common drink of choice among older demographics. As such, we can assume again that 5% of people in this demographic drink boba. 5% of 80M in this demographic equals 4M boba drinkers  

Age Group# of PeopleBoba DrinkersBoba/WeekBoba/YearTotal Bobas
4. Estimate the amount of boba consumed per week by the boba drinkers.

0-20: Boba is incredibly popular, so from personal experience, we will estimate around 1x per week. Apply this same logic to the other age groups. 

This is what we get:

Age Group# of PeopleBoba DrinkersBoba/WeekBoba/YearTotal Bobas
5. Now we just convert the boba/week to boba/year with quick arithmetic. 

There are 52 weeks in a year, so we’ll just multiply that by the boba/week to find boba/year. 

6. Find the total number of cups of boba consumed.

To find the total number of cups of boba consumed, we’ll multiply the boba/year by the number of boba drinkers. 

7. Add up the total number of cups of boba in each age group to reach the final answer. 

From the table, we can draw the total number of cups of boba consumed in each age group: 2080M + 832M + 104M + 104M = 3120 M →

3.12 billion cups of boba consumed each year in the US