This is a story of how a humble boba stop grew into a successful NASDAQ-listed company. Karat by Lollicup is a large US-based manufacturer and distributor of foodservice supplies. Karat® brand containers and utensils are used in some of the largest national chains in America. In April 2021, the company celebrated its 1-year anniversary of its IPO Launch and had the honor to participate in the Bell Closing Ceremony at NASDAQ Marketsite. But it wasn’t like that 22 years ago when the company first started.
In a corner retail location in San Gabriel, CA, founders Alan Yu and Marvin Cheng opened Lollicup Coffee & Tea in April of 2000. It wasn’t long before their bubble tea concept turned into a huge hit. With a goal to bring the Taiwanese concept of tapioca pearls into mainstream America, they worked to quickly expand and franchise to as many as 100 stores in just four years across several states and thus, Lollicup was synonymous with boba drinks.
During this rapid growth, Yu realized the opportunity in sourcing bubble tea supplies directly. In 2003 Tea Zone® began distributing teas, tapioca pearls, and drink powders necessary to prepare bubble tea beverages. Next, in 2004, Yu created the Karat® brand in 2004 to offer packaging and disposable good at competitive prices. This holistic business approach meant Lollicup USA, Inc could supply its franchises everything they needed to operate.
As the distribution business grew significantly, they needed to move to a 60,000+ square foot facility in 2005 then again to a 100,000 square foot warehouse in 2007.
The success of the Karat® encouraged Yu to explore other related avenues. In 2008, Karat Earth became a pioneer in plastic alternatives. This line of eco-friendly and compostable products included PLA cups, bagasse containers, paper straws, and more. It wasn’t until a heartbreaking 2015 video of a plastic straw stuck in a sea turtle’s nose went viral that the movement to eco-friendly alternatives took off.
In 2013, the company’s headquarters is settled in Chino, CA in a 300,300 square foot facility. The added space makes it possible to setup a production facility for Karat® brand cups. That same year, Lollicup USA, Inc. decided to sell the retail tea business to focus on distribution and manufacturing. In 2014, Karat is officially manufacturing in the US. To rebrand and establish itself as a true player in the foodservice packaging industry, the company became Karat Packaging Inc.
The next few years, Karat Packaging strategically added additional facilities in South Carolina, Washington, Texas, and New Jersey. With their robust logistics capabilities, Karat Packaging was supplying custom foodservice products for dozens of large national chains including El Pollo Loco and Panda Express.
In 2020, the coronavirus pandemic meant companies had to strategically pivot to meet the needs of health and safety. In March 2020, the Company launched its Karat® Care product line and began selling 3-ply face masks at reasonable prices. Other products such as nitrile gloves, face shields, sanitizing wet wipes, and hand sanitizing gel helped so many customers, but also helped Karat Packaging maintain its trajectory of annual growth. Now Karat Packaging was prime and ready for its Initial Public Offering on NASDAQ. On April 15, 2021 Karat Packaging (NASDAQ: KRT) launched its IPO. Karat Packaging continues to grow as market demand for eco-friendly and disposable packaging increase.
“The only time you should look back, is to see how far you have come.”
In 2022, the hunger to expand is as great as ever. The most important objective for Karat Packaging is to provide efficient, competitively priced solutions for its customers so they can grow along with us.
