Sam Wollenzien
Mr. Reuter
Economics
18 October 2015
Pumpkin Spice Mania
For many, it’s not Fall without a Pumpkin Spice Latte. It is by far the Starbucks drink with the most hype, and although it is not technically a “holiday” drink, it is widely referred to as the seasonal drink that kick starts Fall. Each year, the release of it becomes more and more anticipated, and the number of anticipating PSL lovers grow each year. It has grown in popularity over the past few years, and as of this year, the PSL is now made with real pumpkin which has lead to an increase in demand, and boosted its sales. In the past few years, the Pumpkin Spice Latte has not only increased in purchases, but also increased in popularity over social media networks like Twitter. It has basically become a nationwide indicator of Fall to many young adults and avid coffee drinkers alike.
This private good, although trending and popular, comes at a pretty steep price. According to an article dedicated to the PSL on Fortune.com, the average amount of money spent by a Pumpkin Spice Latte lover is about $7.81- $8.37 compared to all other spenders at about $6.67 per transaction. Each PSL lover much consider the opportunity cost of each of their drinks, because not only are their cheaper substitutes, but also other, non Starbucks, options to spend that $8.37 on. To most of the buyers, however, the PSL is more of an elastic good, and is only purchased about once a month as a luxury; only about less than 7% of consumers purchase it on a regular basis.
As of 2015, rumors have gone around that these widely loved fall fruits have become scarce. According to pumpking producers, including the nation’s largest producer of canned pumpkin, Libby, the rumors of pumpkin shortages are true. It has been excessively rainy in most regions where pumpkins are grown, thus a lower production of these seasonal goldmines, yet the demand of it grows annually. Minor pumpkin shortages much like this, have happened before (as seen below, 2013), and it is said to not negatively impact Halloween festivities, but may affect the output of pumpkin pies during Thanksgiving and Christmas.
Works Cited
Spiegel, Alison. "Starbucks Holiday Drinks, Ranked According To Hype."The Huffington Post. TheHuffingtonPost.com, n.d. Web. 18 Oct. 2015.
Pumpkin Crops Are down about a Half This Year, and The Harvest Concluded This Week. "The Great Pumpkin Shortage of 2015."CNNMoney. Cable News Network, n.d. Web. 18 Oct. 2015.
Lassiter, Lesley. "Prepare Now for the Great Pumpkin Shortage." Nashville Scene Food Blog. N.p., 19 Oct. 2015. Web. 19 Oct. 2015.
"5 Key Facts about Pumpkin Spice Mania." CNBC. N.p., 22 Sept. 2015. Web. 19 Oct. 2015.
www.statista.com
www.statista.com
It's hard for me to believe how expensive a small pumpkin spice latte costs at a Starbucks. At home, I could create the same beverage for far less of a price depending on the ingredients I use. Like you said, only 7% of people actually buy it regularly, which came as one of the surprises in this article to me. There's so much hype, I could have sworn most people get it at least 5 times a week. Pumpkin shortages come as a big surprise to me as well, as I just assumed there were tons year round. I never really thought about how weather could effect their growth; there's always so many of them around during Halloween time.
ReplyDeleteI definitely agree that the demand of pumpkin spice goes up during the Fall months. I hear about pumpkin spice basically everywhere I go. While there may not be anything compared to the Starbucks Pumpkin Spice Latte, there a lot of other substitutes that would satisfy the pumpkin spice crave. I had not heard that there was a pumpkin shortage this year. I can’t imagine how companies who deal with products that need pumpkin, are doing this year. With such high demands they probably can’t wait for the season to be over.
ReplyDeleteAs the supply of pumpkins decreases and the seasonal autumn demand for them increases, it will cause a shortage that is sure to bump up the price. Though pumpkins are pretty elastic, as most people wouldn’t consider them an essential in life, I think most consumers will likely still be willing to pay the price because pumpkin carving and pumpkin pies is a seasonal treat. The marginal benefit would outweigh the marginal cost for festiveness and holiday spirit for the trade off of a small increase in price.
ReplyDeleteIt is surprising at how many people still buy a Pumpkin Spice Latte even if it may just be once a month, despite the unnecessarily high cost and the opportunity cost. However I would have thought that that number would have been higher because everyone freaks out that its officially the start of fall when the Pumpkin Spice Latte goes on Starbucks menu. Yet the biggest surprise for me from this article, was that there is a shortage on pumpkins. Pumpkins seem so abundant everywhere that I wouldn't have thought there was a shortage.
ReplyDeleteI feel as though the demand for real pumpkins will level off to the point where pumkins are no longer scarce. this is because since the quantity of pumpkins available are low the price is going to be more expensive. Companies will soon switch to pumpkin alternatives such as a type of pumpkin powder or liquid. This is to lower the cost to make a Pumpkin spice latte that will be more ideal by the consumer thanks spending 6$ on a latte.
ReplyDeleteI'm not a fan of coffee, so I don't really understand the hype about the Pumpkin Spice Latte - but clearly, it must be loved by many according to the demand of the PSL. But what I really can't believe is how much people will spend on a simple latte! Although the PSL is only available for a couple of months, people will still make a dent in their wallet each time they purchase on these famous seasonal drinks. However, I don't think that the scarcity of pumpkins will really go up. But if they do, it probably won't effect many "pumpkin activities", since they're an elastic good that most people don't necessarily need.
ReplyDeleteIt is crazy how much the price of Pumpkin Spice Lattes has increased over the years, it started at around 5 dollars and now is around 8 dollars. Starbucks can raise the prices because no matter how expensive they are to some people they are inelastic and they have to have them even though they could make coffee at home for a minimal price. Starbucks might tell people its because of the shortage of pumpkins that the prices are so high, but they just want to make more money off the people willing to spend a high amount for a drink.
ReplyDeletePumpkin Spice Latte's are without a doubt becoming more and more popular every year. For some reason consumers just can't get enough of that seasonal pumpkin taste during the fall months even if it costs them an outrageous amount. It surprises me that there is a shortage on pumpkins because pumpkins aren't something you'd think would come close to running out.This is probably why producers jack up the prices on these pumpkin drinks in particular, because it costs them more money to get the pumpkin ingredients. Despite, the opportunity cost of getting a small drink for $5 and waiting in a line at Starbucks, people still can't get enough of their Pumpkin Spice Latte's and I think they will continue to be popular for years to come since they are seasonal and only sold during special months.
ReplyDeleteI am one of those people that buy the pumpkin spice latte every year. I admit that it is really expensive, which means that I don't get it often but certain people get this drink every week when it comes out. It's crazy on how much people are willing to spend on a drink. There is a high demand and it's increasing every single year as people become more and more familiar with the drink. I could see why there is a shortage for pumpkins as the demand of them becomes higher and higher with the amount of people that want to have the PSL. Overall, I think that the PSL will have a higher and higher demand every fall when they become the seasonal drink that everybody has to try.
ReplyDeleteIn today's society, pumpkin spice lattes are becoming an inelastic good, a necessity to fall. Because these are only offered around this time of year, the build-up to their release is quite big and causes an increase in demand. This increase in demand can be due to a change in consumers tastes, when the season changes so does their need for a pumpkin spice latte. According to the law of supply, because it was mentioned that most PSL drinkers spend more money each transaction, the suppliers will supply more because PSL are what is bringing in the money. However, if prices on PSL rise, consumers may not want to purchase them or as many of them causing a decrease in quantity demanded.
ReplyDeleteThis is a great topic to talk about considering this has been the most talked about topic at least it seems like it. Considering is now made with real pumpkin makes consumers demand increase because they are wanting the healthier option. Considering the previous ingredients were peer junk. As the price of the good is at a high price this is not stopic consumers because this is considered a seasonal product. One thing that would strengthen your post is when you talk about the increase in popularity over social media. Try to find charts of how much it has grown over the past years. But overall you did a really good job conveying the topic on the pumpkin spice mania.
ReplyDeleteThis is a great topic to talk about considering this has been the most talked about topic at least it seems like it. Considering is now made with real pumpkin makes consumers demand increase because they are wanting the healthier option. Considering the previous ingredients were peer junk. As the price of the good is at a high price this is not stopic consumers because this is considered a seasonal product. One thing that would strengthen your post is when you talk about the increase in popularity over social media. Try to find charts of how much it has grown over the past years. But overall you did a really good job conveying the topic on the pumpkin spice mania.
ReplyDelete