Starbucks will begin selling its new fall menu, including its Pumpkin Spice Latte, on Tuesday. / Photo courtesy of Starbucks.
Starbucks will begin selling its fall menu on Tuesday, anchored by the Pumpkin Spice Latte, which the chain has offered this time of year for nearly two decades.
Few annual menu releases generate so much attention or have spawned so many imitators – pumpkin-flavored items can be found across a wide range of chains, which you can see by reading my colleague Chronicle “Taste Tracker” by Pat Cobe.
Yet it has become arguably the clearest sign of downfall in the restaurant industry as it looks to back to school and then the holiday season.
Here are some notable facts about the drink.
He’s a big seller
The PSL and the like are big sellers for Starbucks, which is probably obvious given that there are videos and memes about women starting to dress for fall at this time of year only in depending on the flavor of the pumpkin.
The PSL gives Starbucks a boost on the most important part of the year for the chain. Starbucks revenue is more than 5% higher on average in the last three months of the year, at least based on recent years’ data.
Although Starbucks starts selling the PSL a month before that, it’s still an important product that gets customers in the holiday mood. Even though it’s hot and humid outside.
The pandemic could have improved these sales
It’s possible that years of confinement inside our homes have only heightened the impact of Pumpkin Spice Latte. Bloomberg Second Measure last year noted that sales in 2021 increased by 10% the week of PSL’s launch
That was up from 8% in 2020 and 6% in 2019. “In today’s environment, customers are looking for a taste of something familiar,” former chief financial officer Patrick Grismer told analysts in 2020, according to a transcript from financial services firm Sentieo. .
But cold brew is now queen
Although it’s PSL season, in reality it’s probably Pumpkin Cream Cold Brew season.
Starbucks began selling its Pumpkin Cream Cold Brew in 2019. The product began outselling PSL in 2020.
This highlights a surprising and remarkable shift for the chain: 70% of Starbucks beverage sales now come from cold beverages, rather than hot beverages. This helps explain why more chains are rolling out their pumpkin products earlier.
Starbucks offers a selection of items for retail sale, including canned Nitro Cold Brew Pumpkin Cream. / Image courtesy of Starbucks.
It continues to add items for retail
Just as fall highlights Starbucks’ shift to cold beverages, it also highlights the growing number of items it’s seretail filling.
While restaurants have been enthusiastic followers of pumpkin-flavored products, retail companies have taken the trend to a new level with all things pumpkin. And Starbucks’ growing presence in store aisles is a clear sign of that this year.
The coffee giant will start selling canned versions of its Nitro Cold Brew Pumpkin Cream. It also sells roast and ground coffee flavored with Salted Mocha. This is in addition to PSL creamers, including almond milk and oat milk versions as well as PSL iced espresso in bottles.
It will actually be more expensive.
Chains have raised their prices and Starbucks is no exception. The company has raised prices by about 5% over the past year, which is actually lower than the 7% average for limited-service restaurants over this period.
The price of a PSL is apparently increasing by 9% in some places.
It makes sense for prices to rise further. The company “is not currently seeing any measurable reduction in customer spending,” interim CEO Howard Schultz told investors. With margins contracting 250 basis points last quarter and costs expected to accelerate this period, it would be reasonable to expect higher prices this period.
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