Hannah Theyerl
Economics
Mr. Reuter
10/10/2017
Pumpkin Spice Lattes
As many would agree, the fall season is one of the most trendy times of year as people from all around purchase oversized sweatshirts, UGG boots, and none other than pumpkin flavored goodies such as coffee, muffins, pie, and pretty much anything else you could think of. One of the companies that has had the biggest influence in this pumpkin flavored trend is Starbucks. Starbucks launched its Pumpkin Spice Latte, or PSL, in 2003, and ever since more and more people have been purchasing this drink every year. This drink is said to be a fall essential by many, and a must try by most.
Since this drink has been produced in 2003 there have been over 200 million that have been sold, so this drink has a very high supply and demand. Also, because this drink is only sold throughout the fall season buyers wait all year for this drink and there are always new people who want to see what the craze is all about. Since this drink is so scarce, only coming around once a year, and for only about five dollars it’s almost hard to resist.
Speciality drinks and items always bring in a large revenue because some people wait for so long to buy this drink and get multiple throughout the fall season. Starbucks is not one to release sale revenue for specific drinks, but it is estimated by Forbes that, Starbucks will make in the region of $100 million in revenues from pumpkin spice lattes this fall (Forbes).
Because Starbucks had been so successful with their pumpkin flavored drink other companies had decided to produce more products in order to keep up with this ever growing demand. Other large companies such as McDonald’s also jump into this annual craze in order to keep up with what the people want, but when one thinks about this drink, Starbucks is the main company that comes to mind. Forbes also states that, “the instances of pumpkin as a flavor on restaurant menus is up 21% since 2012. While just over half of this growth is in baked goods, statistics show we like everything from dressings (20% increase) and dips (6% increase) with a pumpkin flavor” (Forbes). Most cafe-like companies make a good profit as the fall season rolls around, and because they are in a free market economy they make the strategic move of producing these products because they know that the consumers will purchase it.
In conclusion, it is obvious that the Pumpkin Spice Latte, along with many other seasonal drinks and items, are very popular and apparent once the fall season comes around each year. Whether the consumer is young, old, from America, UK, or almost anywhere in between, it is likely that they have tried or at the very least have heard of this type of drink. At a low price, and high demand companies make a very large profit during this time and bring in a relatively large revenue.
Works Cited:
O'Connor, Clare. “The Pumpkin Spice Economy: How Starbucks Lattes Fueled A $500 Million Craze.” Forbes, Forbes Magazine, 10 Nov. 2015.
Higgins, Marissa. “How Much Does A Starbucks Pumpkin Spice Latte Cost? Fall In A Cup Can Be Yours For About $5.” Bustle, Bustle, 1 Sept. 2016.
Starbucks. “Pumpkin Spice Latte”. Starbucks Coffee Company, 09 Sept. 2017.
I agree with the fact that items that come around once a year are far more popular and bring in more profit during a specific season. This is because the demand of the Pumpkin Spice Latte when fall comes around because it fits the season of October. For the fact that it isn't supplied year round makes people want it even more because they know when the fall season ends the consumers will have to wait another to get the product. As years go on, the Pumpkin Spice Latte gets more popular and brings in more revenue each year because of the reviews and positive comments Starbucks receives. Which people that go to Starbucks and order the same thing during the season makes it harder for competitors to keep up because they can't give the same quality product. Overall, I think it's a good idea that Starbucks doesn't sell their special drinks all the time because eventually, people would get tired of and stop buying it. If they sell it once a year it makes people want the product even more. People would still buy this product if Starbucks decided to raise the prices. By having these specials it brings in the most revenue and satisfies the customers and in this scenario everyone wins.
ReplyDeleteI thought that this was a good topic to choose, because every other topic has been so specific and political. This was a good, every day example of how a company can create a higher demand on products by only offering to sell them for certain times of the year. Also, because the demand for this product is so high it is very smart for other companies to buy pumpkin products.
ReplyDeleteI definitely agree that Pumpkin Spice Latte's are a big popular demand due to the small window they are accessible to have during the year. I feel as though, each year during this season the demand for these sugary drinks increase, and more and more stores, like McDonald's for example, picks up the original Starbucks drink. I wonder, however, if these drinks were around all year long, if they would be in as high of a demand as they currently are?
ReplyDeleteI thought this was a great topic for economics since there is a huge demand for it around fall. I think Starbucks will have more competition now that the demand for fancy caffeine drinks are high and keep growing. The businesses with the best priced and best quality drink will win the competition.
ReplyDeleteVinny Rondinelli
DeleteI agree with that every year there is a large demand for pumpkin spice ideas. I think the reason people buy these ideas so much around now is because it has been a staple of fall. Other competitors want to get into the revenue because it is such a large demand. I don't think anyone will ever check up to Starbucks because Starbucks made it populate. The competitors are only going to go be able to get a small amount of the revenue. Starbucks pretty much controls the market for pumpkin spiced ideas.
ReplyDeleteEvan Turinske
DeleteIt's crazy that a Starbucks drink has become something people spend a lot of money on nowadays, but items like these really have an impact on the people and the economy. Just because pumpkin spiced things have become so popular, other companies have introduced new pumpkin items that help a growing demand.
ReplyDeleteYour claim that products that come around once a year have a much greater demand amongst consumers is extremely accurate. Because this drink is only available for a certain season, it acts as a scarce good. Come fall the demand of Pumpkin Spice Latte's increases as it fits the season of October becoming almost a staple for fall amongst coffee lovers simply because of the fact that it isn't supplied all year round. the product only being around for a limited time results in consumers feeling the need to purchase it (often times buying coffee at Starbucks significantly more) because they know that when the fall season ends they'll have to wait an entire year to get the product again. In conclusion, I think it's a very smart idea that Starbucks does not sell their seasonal drinks year round as eventually, people will become sick of them. Not only do the Pumpkin Spice Latte's sell very well, but because of the buzz that specific seasonal drinks generate so do many other items such as muffins and scones which also greatly increase profit.
ReplyDeleteI completely agree with you Liam that he claim that products which come around once a year have a much greater demand amount consumers is extremely accurate. The Pumpkin Spice Latte is a huge money tree for Starbucks as it is a scarce good that only comes around one time of the year. Because of the fact that it only comes around one time of the year, it gives Starbucks a huge costumer rush in a time where they need it most. It provides Starbucks with the stability to know that during the fall season they are round to get a good amount of business just based off their past financial years where they finished big time in the positive due to the Pumpkin Spice Latte. Although Pumpkin Spice is not completely Inelastic because if the Latte was over 20 dollars it would be hard to imagine people would buy it, but it is more elastic than most of the products Starbucks offers.
DeleteStarbucks and the Pumpkin Spice Latte are two of my favorite things in the Fall which make this post very interesting to read. With that being said, I totally agree with the demand of the Pumpkin Spice Latte being very high as it is only available in a limited time frame. This then means Starbucks has to supply more of the products to produce and create the popular drink. Also the specialty drinks allow the consumers to always be interested in Starbucks and the new surprises they will announce to everyone which means there will always be revenue for Starbucks. This company has a high profit and will always be loved by many.
ReplyDeleteThis is a very unique topic to write an econ blog post on, but I believe it's very accurate. The statement about Pumpkin Spice Lattes being in high demand due to it only being available for a portion of the year is true because once the Pumpkin Spice Lattes come back, everyone rushes to Starbucks to get one. The company makes a high profit off of these drinks and if they sold them year round, they would make less because it would take away from the demand if they were always available.
ReplyDeletePumpkin Spice Lattes are totally super delicious. That's why I like buying them. I love the way they taste and I can see why their demand would be high. IF I could, I would give them out for Trick or Treating! I would also love to have some of Starbuck's money because I am about to get destroyed by college tuition. Maybe I should invest next year around this time because the Pumpkin Spice Latte is a scarce good and more rare than an iPhone. Fun fact for you, the company Starbucks got its name from a character in the famous novel "Moby Dick" despite the fact that Captain Starbuck never drinks coffee in the book. Isn't that just fantastic? I thought so too.
ReplyDeletePumpkin Spice Lattes definitely have a high demand. They are so well marketed on the internet and by word of mouth, nearly everyone, even people who wouldn't purchase them, knows what they are. I agree that they are also scarce, probably also due to strategically controlled supply. Starbucks knows many people want this drink and if it appears sold out it will seem even more popular and desirable than it already is, people will want it. I also agree they will make an increased profit, they are selling a 5 dollar latte which probably costs much less to make and they have rolled out some price increases upon some of their items, such as breakfast sandwiches- a complement to their Pumpkin Spice Lattes- thus increasing profit even more.
ReplyDeleteThese seasonal drinks are becoming a norm in today's world and they have been high in demand almost for as long as they have been invented. Starbucks did a good job promoting this product and millions of people fell in love with the seasonal drinks. This drink seems to be elastic and people will buy the product almost at any cost because they are limited. A raise in price would not change the demand of the drink much because it is limited. Starbucks makes a lot of revenue during this time of the year because of the limited menu.
ReplyDeleteI hear talk about Pumpkin Spiced flavored food and drink products throughout the entire fall season. I am one of those consumers who purchase pumpkin spiced flavored items when they are on their peak in the fall. I am already a huge Starbucks fan but when it comes to the sales revenue for pumpkin spiced flavored items I am a big contributor to the businesses profit. I agree that when businesses specifically restaurants have a seasonal item come out that, it's when the business expects its most revenue and can pay their employers a raise among that time. Hence the higher demand for pumpkin spiced drinks, then the higher the price Starbucks can price their drinks as well.
ReplyDeletePumpkin Spice Lattes get more and more popular every year. Starbucks did an insane job promoting this product a few years back and it has been an extreme hit every fall every since. A raise in price would not change demand because people would still be willing to buy this seasonal drink.
ReplyDeleteStarbucks has promoted Pumpkin Spice Lattes so well that they have become what I call the "drink of fall." The one drink that you think of when you think of fall, is Starbucks pumpkin spice lattes. This promotes to brand increased recognition for Starbucks as well as an increase in sales as, when you hear all about a certain drink you are going to want to try it.
DeleteI think that it is smart of Starbucks to limit the product to only one season out of the year because it keeps the demand high the entire time it is out, and people never get sick of it. Some people might say that it is dumb of them because the drink is so popular when it's out, but if they left it out forever, it would slowly become less and less popular. In the long run, it is best for them to keep it limited. This is also why supreme is so popular, because it is hard to get and is very limited.
ReplyDeleteI agree with you that Starbucks should keep selling these drinks only in the fall because they can ave a higher price when they aren't available during the rest of the year and looked at as a special fall treat. I would like to see how sales have possibly decreased due to McDonald's selling the same latte. Overall, Starbucks is doing a good job by creating a drink that is limited throughout the year and limited throughout the stores they can be purchased.
DeleteThe main reason pumpkin products are limited to the fall is that harvest is that time. There wouldn't be able to sell it year round because there just isn't enough pumpkin for it.
DeleteI agree that Starbucks is wise to only sell them in the fall, especially as pumpkin is very fitting for the fall. Additionally, it creates a bigger hype for them to start selling them. For example, I saw many posts on Instagram and snapchat advertising that the Pumpkin Spice Latte is back. I think it would be interesting to poll some people about if they would rather purchase a PSL from Starbucks or McDonald's, as the latte from Starbucks is more expensive however maybe better quality.
DeleteI would love to see how Starbucks customers' utility could be measured throughout the year, and especially in the fall to see if there is a correlation between the number of purchases and if there is actually satisfaction from a purchase from a pumpkin spice product.
ReplyDeleteThis is a good point, it would be interesting so see if the sales of Pumpkin spice latte's decrease as time goes on due to people not getting as much satisfaction. Another thing to look at too would be the demand of the product, if the Pumpkin spice latte was available all year, the demand for them probably wouldn't be as high.
DeleteThis was interesting topic to choose for economics because the PSL is one of the most in demand products there is during the fall season.As the fall season approaches the marketing and publicity for this drink is sprawled all over every form of social media and it is made into a need. Although Starbucks has dominated the PSL field in the past I think there may begin to be an increase in the amount of competition now that consumers are turning towards cheaper options such a as McDonald's for similar products. I believe that if McDonald's was to heavily marked an item similar to a PSL and sell it for much cheaper than Starbucks offers, I predict that there would be a large dent in the demand and overall revenue for Starbucks during the fall season.
ReplyDeleteIt was an interesting tangent in the beginning when it was discussed that since the launch of the Pumpkin Spice Latte a large variety of all other pumpkin flavored goods have been increasing in both supply and demand. It's an interesting (and smart) producer technique for the producers to only release these flavored products in the Fall season as it does create a large spike in consumption from the excitement and anticipation of the goods. I agree with Brooke that if McDonald's was able to create a drink that is strongly comparable to the famed beverage from Starbucks, then a lot of the consumers may change their producer preference as McDonald's is usually a cheaper producer than Starbucks.
ReplyDeleteIt is a very smart strategy on the producer's part to create a variety of pumpkin related goods, based on the evidence of the high demand for all things pumpkin during this season. Additionally, the slight increase in prices of these goods will still almost guarantee that the demand will not change relatively at all, giving producers some wiggle room to increase their revenues without hurting the demand for the product.
ReplyDeleteI agree that Starbucks is smart for making Pumpkin Spice Latte's a seasonal drink. This way, consumers will buy a lot of them when they are in season because they know it won't always be there. However, since McDonald's is also having Pumpkin flavored drinks, their cheap prices will cause consumers to go there instead of Starbucks.
ReplyDeleteIt really is interesting how so many people rush toward the fall flavors. I think one of the biggest reasons that pumpkin flavored drinks have become so popular is because of the amount of people that enjoy the drinks. People tell their friends and the word continues to spread. Even if people end up not liking the flavor, many will simply try it because of all of the good reviews. This only increases the profits that Starbucks receives which continues to make their decision to produce pumpkin flavored drinks an even more profitable item.
ReplyDeleteIt is smart for Starbucks to make more pumpkin goods, like latte, bread, cookies, etc. This will increase their growth and they will make more profit because during fall many people want pumpkin type of goods. It doesn't matter at what price Starbucks sell their pumpkin goods because at the end of the day many people will come and buy pumpkin goods. If they keep their price high or low they will be able to make a profit.
ReplyDeleteI agree with the argument that Pumpkin Spice Lattes are not only loved by the public, but also loved by Starbucks because it is so popular and is bringing in a large revenue. I though the points you made on how the PSL is a seasonal drink, making it more of a demand because it only comes around once a year and it produces more money during this period of time, greater than any other normal drinks would do. This also then ties into other seasonal drinks during the winter and summer, which leads consumers to wonder what drink they will be purchasing next. In the end I believe it was a strong argument that was backed up with reasonable evidence.
ReplyDeleteCompany's that have seasonal items are very smart. They make a ton of money of of those products. Because people wait all year to get them and when they do they buy as much a they can before they are all gone. Just like Starbucks. Another example of this would e with McDonald with their shamrock shakes.
ReplyDeleteChains like Starbucks make a large amount of money from seasonal drinks like you mentioned and McDonald also leads in Shamrock shakes during March. Like you said the demand for these will be higher in season. I however don't think other companies will effect Starbucks price. Because they have a quality product that has a unique taste so they can charge more money than Mcdonalds.
ReplyDeleteI agree that the fall season causes a higher demand for pumpkin flavored drinks and food. This reminds me of how the supply and demand increases for Shamrock Shakes at McDonald’s closer to St. Patrick’s Day. However, one negative externality from this effect might be that the demand for other drinks or foods that aren’t holiday or seasoned theme would decrease.
ReplyDeleteI actually have never had anything from Starbucks before so I don’t understand the hype. Though due to this post, I thought about how much pumpkin spice is advertised during the fall season. There’s TV ads, billboards, radio ads, and more! Also as I was reading, I noticed a connection to eggnog during the Christmas time. McDonald’s and Culver's both have a huge sale revenue from eggnog products. I never realized the supply and demand needs of each favorite seasonal drink.
ReplyDeleteI agree because when the pumpkin spice latte's are available at Starbucks I bet their is a huge boom in sales because there is a high demand for them.Its a very smart sales strategy because by the time fall rolls around everyone wants a pumpkin spice latte.
ReplyDeleteSeasonal items for company's are very smart for there revenue because not only with food products but with all products because if someone knows a product is almost sold out for the year they will buy a large amount and preserve it as long as they can. Even if thats not the case for drinks people will buy more products for the time being since the product is only seasonal and this raises the demand.
ReplyDeletePumpkin spice lattes have been around ever since I can remember. The fact that there is an estimated revenue of $100 million dollars just from this one drink is unfathomable! Over the years starbucks has launched a multitude of new drinks regarding pumpkin flavoring such as: pumpkin spice chai tea latte and a new salted caramel mocha. With these new drinks I agree with you that the consumers wait a considerable amount of time in suspense to see the reveal of the new fall drinks. With this suspense the regular consumers of any coffee shop would be anxious to get their hands on the new drinks that await the fashionable season.
ReplyDeleteThe fall drinks and Starbucks as a whole are great economic topics to discuss. Starbucks has a lot of elasticity power in their products because everyone wants that white cup with the green logo on the side. That demand for the brand sky rockets even further when seasonal beverages come out. The marginal benefits of these promotions must be immense.
ReplyDeleteSeasonal items are key to many companies revenue streams. I am not surprised that Starbucks makes so much revenue off this drink because they are a household name/brand and because it is one of their most popular drinks. The demand is only increased when it is a limited time product.
ReplyDeleteI agree that seasonal marketing has become more popular. Since they were really the first company to brand the Pumpkin Spice Latte, Starbucks is in control of this fall drink market. Their revenues have most likely seen an increase in other drinks as well because the PSL brings in fall customers who may have otherwise not spent money at their business. (Kathryn Van Hulle)
ReplyDeleteSeasonal drinks are a set in stone craze, because seasons don't change every year. Fall seasons bring on pumpkin flavored things, winter brings on hot items and candy cane themed items, spring brings on healthy items, and summer brings on cold items. Each year, companies prepare for said demands of these items each season, such as Starbucks with their Pumpkin Spice Lattes. Although the only thing I enjoy about fall items is the pumpkin pie, the craze for the lattes, I understand. Each company that is large, advertises well, and has good products, will see an increase in revenue from each season.
ReplyDeleteI agree with you that this drink has such a great supply and demand since its a seasonal drink. Since its a seasonal drink, the company makes tons of money from it and over the years the pumpkin spice lattes have grown very popular so Starbucks is making crazy money with this drink.
ReplyDeleteI think eventually Starbucks will make these lattes year round, because it could be a major marketing campaign for them. I get that because it is available for a limited amount of time that people want it more, but if it is available year round, you have to think that more purchases will be made over a year long period than in the time frame they have now.
ReplyDeleteI agree with your statement on how the popularity of the pumpkin spice latte has brought high demands for starbucks. Since this is a one holiday drink and doesn’t show up until next year, will make the supply and demand to increase because everyone wants to get it the day it comes out. I believe that having this drink only once a year makes starbuck demand sky rocket because there is such little time for it to be out and everyone craves it. Overall, I like the way you used your vocabulary and the evidenced that you used to backup your topic.
ReplyDeleteAlthough seasonal marketing is effective in promoting a product, if Starbucks sold the Pumpkin Spice Latte throughout the year they might be able to make more money. Some people who really love the drink would buy it year round, however they can only buy it during the fall season so Starbucks is missing out of some of that revenue. I think a good way to promote the product during fall is having it discounted by a slight amount, so people try the product, and if they like it then they might buy it year round.
ReplyDeleteI agree that in the fall, pumpkin spice lattes are very popular and especially when it gets cold, most people are buying them if not other hot drinks. It is crazy to think that there is such a high revenue. Because Starbucks was already in very high demand for its specialty drinks, the pumpkin spice latte just made the company more desirable which is why I can understand why so many people wait in the line for the drink.
ReplyDeleteI agree that in the fall there are a lot more fall festivities and that pumpkin flavoring is high in demand. Since Starbucks was for a while the only producer of the Pumpkin Spice latte there was a larger demand for the product since it was so good. So Starbucks could have made the price as high as they wanted to since they knew consumers would be buying it because of it's demand. But now that more companies are making this same drink and making other similar, the demand is still in high but companies have competition. Therefore making other companies prices lower or more reasonable.
ReplyDeleteI agree with you that fall is one of the most trendy seasons of the year, bringing out the UGG’s, sweater’s and pumpkin everything. Personally, I am one of the people who love the “PSL” and wait for the first day it is available to get one. I agree that since it is only a seasonal drink, it becomes more scarce, and in a very high demand during the fall time. I like how you incorporated how they bring in more revenue for this specific drink because there is so much hype behind it. It is in high demand for all of those coffee lovers that wait for that day to come when the PSL is back, and that Starbucks is able to make a lot more money on not only their pumpkin spice latte in the fall, but as well as their seasonal winter drinks and summer drinks as well.
ReplyDeleteI find it interesting how McDonald's menu tends to change with other popular restaurant changes. Originally McDonald's menu did not include McCafe, but as the coffee/tea market experienced increases in demand, McDonald's created an entire new menu to incorporate coffee drinks. Starbucks does the same thing to please the consumers. They have started to serve drinks using nondairy like coconut milk and almond milk to serve people with allergies. They also have bought out teavana to supply for the increase in demand of tea. Starbucks and McDonald's uses scarcity to increase demand with the PSL, christmas drinks, and the shamrock shake. I wonder if they were to serve these items all year round if they would do as well? Do to diminishing marginal utility, people would probably start to get tired of the unique flavors.
ReplyDeleteI agree that fall is a very trendy season to everyone. Companies are capitalizing on the trends and creating products that will bring in revenue for the company. I wonder if these companies will create new drinks for other holidays or seasons coming up.
ReplyDeleteSeasonal products are a very important part of the revenue for a lot of companies. As it only comes around for a few weeks-months of every year, there's more of an urge for consumers to purchase, as the product is limited. Starbucks is a very smart and successful company-- they make an impressive amount of money for their simple and overpriced coffee drinks. Not only this, but their marketing is almost flawless, especially when it comes to advertising their seasonal drinks. Very interesting topic!!
ReplyDeleteSeasons provoke many flavored fun food ideas. Pumpkin spice lattes are a great deal to many teenagers, coffee lovers, and seasonal beverage freaks. Having limited time offers will surely increase demand, which Starbucks has the benefit of even increasing supply for more revenue.
ReplyDelete