Spending

How the pandemic might change pumpkin spice latte season

With coffee sales down 13% in July, it's unclear if pumpkin spice lattes will be profitable for Starbucks in 2020. Here's how the pandemic might alter PSL season.

Twenty/20

The time period during which Starbucks sells its popular pumpkin spice lattes — called PSL season — started on the early side this year. As of August 25, consumers can order from a collection of pumpkin spice drinks, which includes the signature latte along with the new pumpkin spice cold brew, all of which come in equally festive cups. 

Pumpkin spice lattes are Starbucks' most popular seasonal beverage, according to a company spokesperson, and the day they start selling them is often highly anticipated. 

However, with coffee sales down 13% in July of this year, according to data from the NPD Group, it's unclear whether PSL season will be as profitable as it has been in years past.

"Consumers are not taking that morning stroll to work, not stopping by on their way to the train, or not taking that break in the office," says Darren Seifer, food industry analyst at NPD group. 

Here's how changes brought about by the pandemic might alter PSL season.

Consumers are not taking that morning stroll to work, not stopping by on their way to the train, or not taking that break in the office.
Darren Seifer
Food Industry Analyst at NPD Group

Pumpkin spice mainly attracts heavy coffee drinkers 

"The drive to bring the pumpkin spice latte even earlier is a clear attempt to offset a weak summer period and to herald in the higher visit levels that come in the fall and winter," says Ethan Chernofsky of Placer.ai, a site that analyzes consumer foot traffic patterns. 

Last year, pumpkin drinks along with other fall-specific beverages increased sales in Starbucks by 3%, according to the company's earnings statements. The price of a pumpkin spice latte varies slightly based on location, but is typically between $4.50 and $6. 

Pumpkin spice beverages don't necessarily bring in a new consumer base, Seifer says, as they are mostly purchased by people who are already consistent Starbucks visitors. Only 8% of all patrons purchase the pumpkin spice latte, according to NPD data. 

"Pumpkin spice lattes are not bringing in new buyers, but when heavy buyers purchase it they typically have higher check sizes," Seifer says. "Last year, on average, when people bought PSLs, their check was about $2.75 more than the typical check." 

This year, however, PSL season might not net the sales growth Starbucks usually sees, as in-home coffee appliance sales rose significantly due to Covid-19. 

VIDEO2:5402:54
Is your daily coffee really making you broke?

Video by Courtney Stith

Coffee machine sales increased

Coffee machine sales from May to August this year grew 25% compared to the same time last year, according to NPD data. Cold brew coffee growler sales also increased by 129%, according to data from Square

"Pot coffee makers and single serving coffee makers were actually rising before Covid," Seifer says. "Covid probably just accelerated that to a degree." 

That's why some coffee shops have pivoted to selling products you can use to make your own PSL at home. For example, Pedal Java, based in Knoxville, Tennessee, started selling pumpkin pie syrup for $12 a bottle. It doesn't feel like fall in Tennessee right now, Pedal Java owner Andrew Mrozkowski says, but thanks to Starbucks he had to start selling the syrup early this year. 

"Up in Seattle they decided [PSL season]  started in August but, it's still very very hot in Tennessee," he says. "Right now 75% of our sales are for cold coffee, iced or frozen.  We expect that as things cool off, pumpkin spice sales will pick up." 

Last year, on average, when people bought PSLs, their check was about $2.75 more than the typical check.
Darren Seifer
Food Industry Analyst at NPD Group

PSL season has a unique appeal during the pandemic 

Even though PSL season typically doesn't bring in new coffee drinkers, it does have a loyal fan base. And for many coffee drinkers, PSL Season is synonymous with fall, which might make it an even more appealing purchase during the pandemic.

Almost 20% of Americans said late August was a socially acceptable time to market pumpkin spice products, according to Morning Consult data

Anrenee Reasor, 27, says she is buying less coffee these days due to lifestyle changes during the pandemic.

"I get more sleep now," says Reasor, a risk analyst with Cigna. "The commute to the home office is much shorter and there are fewer long, event-filled days that I need to be alert for." 

Still, she plans on buying her share of PSLs this season. "I need a semblance of time passing," she says. "Plus, La Colombe crafts a nice rendition of the PSL." The Philadelphia-based brand's lineup of canned draft lattes includes a seasonal pumpkin spice flavor.

With the pandemic warping some consumers' sense of time, buying a pumpkin spice latte might signal that regardless of what you have (or haven't) done this year, fall is here.

More from Grow: 

acorns+cnbcacorns cnbc

Join Acorns

GET STARTED

About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2019 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.