Why did pumpkin spice flavor work for Starbucks but, not so well for everyone else? Their strategy is built on the scarcity principle of a limited-time offer. The pumpkin spice latte is a limited-time offer — and a shelf-stable food isn’t. 

Between its first release and 2015, Starbucks reported passing 200 million sales of the beverage. Reporting on the popularity (and infamy) of the beverage is redundant at this point. It has become iconic, hashtagged-to-death, dissected for chemical components, and anthropomorphized as the incarnation of the basic white girl.

This led many brands to try adding the trending flavor to their own products. But, that didn’t lead to an increase in sales. Just an increase in the availability of the flavor. As Elise Taylor of Vogue explains, “All those wackadoo pumpkin spice products in the grocery store probably aren’t selling—only 10 percent of product categories accounted for 87 percent of pumpkin-flavored sales across the consumer landscape. The biggest sale increases were seen in cereal (up 183 percent that year) and—what else?—liquid coffee (up 596 percent). But other products, like yogurt and craft beer, saw a decline. Not everything pumpkin spice turns to gold.”

Food trends are real and driven by many factors. (I’m actually reading The Tastemakers: Why We’re Crazy for Cupcakes but Fed Up with Fondue by David Sax right now.) But, a food trend isn’t the only ingredient required to bake up a successful marketing promotion. The promotion needs a good flavor and a strategy to move the market toward the your product. 

It’s not pumpkin spice flavor that sells the PSL. It’s the perception that it’s valuable because it’s not always available.

The Secret to Success

Most marketing professionals agree that several factors contributed to the Pumpkin Spice Latte’s success:

  • Nostalgia and Emotion: The flavors of cinnamon, nutmeg, and clove evoke memories of cozy autumn days, family gatherings, and holiday celebrations. This emotional connection enhances the appeal of the beverage.
  • Scarcity and Anticipation: By offering the PSL for a limited time each year, Starbucks created a sense of urgency and excitement. Customers eagerly anticipate its return, making it a seasonal ritual for many.
  • Social Media and Culture: The rise of social media platforms like Instagram and Twitter played a significant role in spreading the PSL phenomenon. Users share their love for the drink, using hashtags and photos to celebrate its arrival. This online buzz fuels curiosity and drives new customers to try it.

I’ve written multiple times over the years about the pumpkin spice phenomenon and find one myth all the time. Brands think the pumpkin spice flavor itself is the key to success when really it’s the strategy around the promotion.

Understanding The Scarcity Principle

Each year, the release of the pumpkin spice latte is built around The Scarcity Principle. This economic theory suggests that a limited amount of a good, combined with a high demand for a good, leads to a rise in status for that good. This allows brands to ask for a higher price. It also explains why people can get so crazy excited about a drink that could technically be created year-round. Often, supply and demand can be manipulated because of the natural tension of their converse relationship.

In Forbes, Debra Donston-Miller explains, “Products that are available only for a limited time have a kind of built-in marketing that can grow in impact over time–think Cadbury Creme Eggs.” She gives the example of the Frosty the Snowman holiday special which declined in seasonal television views once home copies became available. Urgency and exclusivity were core to the appeal.

Limited-time offers to create artificial scarcity. In this case, Starbucks won’t sell the popular beverage at any other time of the year. This creates a lower supply. The demand increases in proportion to that perceived limited supply.

Food and flavor brands know that seasons affect buying habits. That’s why restaurants release seasonal menus and food manufacturers offer specialty flavors. It gives them something new to talk about for a few months. But, the urgency is a key part of that equation. Consumers need to know there is a limited supply. Otherwise, they don’t have a reason to purchase it right now.

Dr. Robert Beno Cialdini’s Principles of Persuasion

This persuasion process, the scarcity principle was developed by Dr. Cialdini — an American psychologist and a professor of Psychology and Marketing. In 1984, he wrote the book Influence: The Psychology of Persuasion based on three “undercover” years applying for and training at used car dealerships, fund-raising organizations, and telemarketing firms. Using these real-life situations of persuasion, he outlined six key principles of persuasion which he amended to seven in 2016.

 

7 Principles of Persuasion

  1. Reciprocity: People tend to return a favor. This is why you see free samples in marketing.
  2. Commitment and Consistency: If people commit to an idea or goal they are more likely to honor that commitment. This is why popups say “I’ll sign up later” as an option when closing the window. 
  3. Social proof: People follow the actions of their peers. For example, social networks show you which of your friends like a page. 
  4. Authority: People will tend to obey authority figures and experts. So, persuasion comes from referencing people with titles or achievements that align with the brand.
  5. Liking: People are easily persuaded by other people that they like — which is often for shallow reasons. Physically attractive people are more persuasive, being seen as more as kind or intelligent (referred to as the halo effect).
  6. Scarcity: A perceived scarcity of a product makes consumers perceive it as valuable. Limiting the number of items available or the time frame it’s available creates scarcity.
  7. Unity: When an influencer and influencee share an identity, the influencer has more power of persuasion. The more we perceive people are like “us,” the more influence they have.

Limited-time offers, like the Pumpkin Spice Latte rely on the scarcity principle creating a perceived value from a lack of year-round availability.

The History of the Pumpkin Spice Latte

The Pumpkin Spice Latte, #PSL  is the epitome of successful limited-time offers. They’ve ridden that wave for over a decade, with the PSL as Starbucks ’ top-selling drink. The drink’s impact is obvious, with some even calling it Pumpkin Spice Derangement Syndrome. Because of their success, food brands have been trying to cash in on the flavor with Pumpkin Spice products. But how did this simple drink become a flavor zeitgeist? 

The Market Research

In January 2003, the Starbucks product research team, led by Peter Dukes, market-tested several seasonal flavors. They experimented with a Peppermint Latte, Eggnog Latte, and a Fall Harvest Latte. At the time, few other foods focused on commoditizing the pumpkin flavor. The Fall Harvest Latte was adapted to the Pumpkin Spice Latte and launched in the fall of 2003.

Past Starbucks guru Tim Kern told Quartz, “A number of us thought it was a beverage so dominated by a flavor other than coffee that it didn’t put Starbucks’ coffee in the best light.” The timing was perfect. Market research had already shown them that the taste would feel nostalgically fresh. No one was advertising that flavor.

Discover Something Unique

To develop the PSL, Duke started with focus groups and mined their feedback for gems. Unlike the stunt flavor strategy from Oreo and Lays, they didn’t bring every popular idea to market. In fact, the Pumpkin Spice Flavor fell somewhere in the middle of focus group preferences. The brand still had to use discretion when selecting its new limited-time offer. They decided it was both new and something that could become core to their brand’s identity.

Construct Urgency

Next, Starbucks launched the seasonal drink at a time that made sense — autumn. While you can get these spices year-round, our minds associate pumpkins with fall. That’s when the plants are supposed to grow and that is when consumers believe we should buy those cans of brown paste. 

It’s also a peak foot traffic season because of consumer shopping and dining habits. The drink is released just as summer vacations are ending and everyone is into their back-to-school routines. 

Then, they end the promotion when they discontinue their fall menu. So, if you love the drink, you have to get out to purchase it within a specific window. Thus, the scarcity principle comes into play. The drink’s value comes from the fact that you can’t wait to get it. 

A Marker of Fall

Concerning their ability to move the market, the drink and the flavor are not equal. Business Insider reports, that the drink has become a ‘marker of fall.’” Indeed, sales of the fall flavor usually spike on the first day. It’s a trend that changed into a tradition. 

The rise and fall of the flavor rely on the core marketing principles behind the drink’s initial success.

What the copycats fail to realize is the near-formulaic application of a textbook marketing campaign strategy generated both the initial and ongoing success of the drink.  They started with a brand-authentic concept and then made it valuable.

Retain the Converts

Unlike medium and small businesses, Starbucks can commit to saturating the market with its ad spend. Also, they’ve worked with their customers — allowing them the freedom to engage on social media as the consumers saw fit. This contrasts with many brands that try to force audiences to follow unnatural hashtags or other inauthentic UGC behavior.

In an interview with CNN, Alexander Chernev, a professor of marketing at Northwestern University’s Kellogg School of Management, breaks down their strategy. Essentially, “seasonal menu items mean brands have something new to talk about every quarter” and “Although a specialty item may be exciting on its own, it can also remind consumers how much they like the basics.”

At this point, Starbucks is deep in their strategy of retaining loyal customers. It’s been 20 years of the Pumpkin Spice Latte, and for most of that, food brands have infused pumpkin spice into their flavor profiles. Yet, Starbucks has had the most success. 

It’s not about the pumpkin spice flavor — it’s the scarcity value Starbucks has created for the drink each season. 

This year, Starbucks released the drink earlier than ever (August 22). However, it didn’t boost sales for the quarter.

The Seattle coffee giant on Tuesday reported weaker-than-expected sales in its fiscal fourth quarter, which ended Sept. 29. It also said it would suspend financial guidance for its 2025 fiscal year to give its new Chairman and CEO, Brian Niccol, time to assess the business.

Customer traffic was sluggish in the U.S., where Starbucks saw a 6% decline in same-store sales, or sales at stores open at least a year. The company said expanded fall product offerings such as Iced Apple Crisp Nondairy Cream Chai and more frequent in-app promotions didn’t drive more visits. 

Starbucks reports weak quarterly results despite the arrival of Pumpkin Spice Latte season from SFGate

The early release went against their tried-and-true scarcity plan — and seemed to be an effort to get ahead of competitors with cheaper seasonal offerings. But, it didn’t work. They’re already planning to pivot with strategies that improve operations and marketing techniques to bring back the brand’s equity as a coffee innovator.

Niccol said Starbucks needs to improve staffing, remove bottlenecks and simplify operations for its baristas, especially during the morning rush. Mobile ordering should be refined so it doesn’t overwhelm the café experience, he said. Niccol also said Starbucks needs to simplify its “overly complex menu.”

“We know how to make these improvements, and when we do, we know customers will visit more often,” he said.

Niccol said Starbucks plans to change its marketing to focus less on Starbucks Rewards customers and more on highlighting the brand’s handcrafted drinks and coffee innovation.
Starbucks reports weak quarterly results despite the arrival of Pumpkin Spice Latte season from SFGate

It will be interesting to watch if Starbucks doesn’t rely on a pumpkin spice early release in 2025 to invigorate fall sales — and instead brings the drink back to a true limited-time offer. 

Stay On Top of Trends

I’m Danielle, owner of The Shop Shop Marketing Agency in Lynchburg, Virginia. I regularly post about social media and SEO trends here and on social media. Sign up for my twice-a-year newsletter to stay inspired.

Did you know?
– The Starbucks Pumpkin Spice Latte recipe has been unchanged in 11 years.One of the original ideas for the name was “Fall Harvest Latte.”
– “PSL” was the original beverage code for Pumpkin Spice Latte written by baristas on cups, and soon became the drink’s nickname.
– Starbucks Pumpkin Spice Latte is now available in nearly 50 countries throughout the Americas and EMEA (Europe, Middle East and Africa) regions.
– During the fall, customers express their #PSL enthusiasm with an average of more than 3,000 tweets per day.
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