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Starbucks’ Pumpkin Spice Latte returns today for 20th year

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Dee-ann Durbin, The Associated Press


Published Thursday, August 24, 2023 10:42AM EDT


Last Updated Thursday, August 24, 2023 10:42AM EDT

The seasonal drink that made pumpkin spice a star is turning 20. And unlike the autumn days it celebrates, there seems to be no chill in customer demand.

Starbucks’ Pumpkin Spice Latte goes on sale Thursday in the U.S. and Canada, as it does each year when the nights start getting longer and the fall winds gather. It’s the coffee giant’s most popular seasonal beverage, with hundreds of millions sold since its launch in 2003. And it has produced a huge — and growing — industry of imitators flecked with cinnamon, nutmeg and clove.

In the year ending July 29, U.S. sales of pumpkin-flavored products reached $802.5 million, according to Nielsen. That’s up 42% from the same period in 2019. There are pumpkin spice Oreos, protein drinks, craft beers, cereals and even Spam. A search of “pumpkin spice” on Walmart’s website brings up more than 1,000 products. A thousand products that smell or taste like, well, pumpkin pie.

For better — and, some might say, for worse — the phenomenon has moved beyond coffee shops and groceries and into the larger world. Great Wolf Lodge is featuring a Pumpkin Spice Suite at five of its resorts this fall, decked out with potpourri, pumpkin throw pillows and bottomless pumpkin spice lattes.

It has also spawned a vocal group of detractors — and become an easy target for parodies. Comedian John Oliver once called pumpkin spice lattes “the coffee that tastes like a candle.” There’s a Facebook group called “I Hate Pumpkin Spice” and T-shirts with slogans like “Ain’t no pumpkin spice in my mug.”

The haters, though, appear to be in the minority. Last year, Starbucks said sales of its pumpkin spice drinks — including newer offerings like Pumpkin Cream Cold Brew — were up 17% in the July-September period. And in a 2022 study of 20,000 Twitter and Instagram posts mentioning pumpkin spice, just 8% were negative, according to researchers at Montclair State University in New Jersey.

BEFORE THE LATTE: WHAT PUMPKIN SPICE WAS

It wasn’t always this way.

Canned pumpkin and pie spices were relegated to the baking aisle when Starbucks began experimenting with an autumn drink that would replicate the success of the Peppermint Mocha, which took the winter holidays by storm in 2002. Customer surveys suggested chocolate or caramel drinks, but Starbucks noticed that pumpkin scored high for “uniqueness.” That would turn out to be prescient.

In the spring of 2003, a team gathered in a lab in Starbucks’ Seattle headquarters, bringing fall decorations to set the mood. They sipped espresso between bites of pumpkin pie, figuring out which spices most complemented the coffee. After three months, they offered taste tests; pumpkin spice beat out chocolate and caramel drinks.

Starbucks tested the Pumpkin Spice Latte in 100 stores in Washington, D.C., and Vancouver, British Columbia, that fall. The company quickly realized it had a winner and rolled it out across the United States and Canada the following fall. And in 2015, a watershed: The company added real pumpkin to the recipe.

These days, Starbucks’ Pumpkin Spice Latte has its own handle on X — formerly known as Twitter — with 82,000 followers, and a Facebook fan group called the Leaf Rakers Society with 43,000 members. And it has fans like Jon McBrine, who drinks black iced coffee for most of the year but eagerly awaits the latte’s return each fall.

“I love the flavor and I love the subculture that has evolved from this huge marketing campaign,” says McBrine, a graphic designer and aspiring author who lives in the Dallas area.

It’s hot through the end of October where he lives, so McBrine typically orders his with ice. But at least once a year, he gets a hot latte, savoring memories of the autumns of his childhood in Delaware.

“It’s part of getting into the season,” he says. “It’s almost like a ritual, even if you’re just waiting in the drive-thru.”

THE PUMPKIN SPICE LATTE AS SENSORY EXPERIENCE

Jason Fischer, an assistant professor at Johns Hopkins University who studies human perception through sight, sound and smell, says odor and flavor have a more direct route than other senses to the area of the brain that processes memories.

That’s due to evolution; humans needed to remember which foods were safe to eat. But it means smells and memories are closely linked.

Still, he said, people’s sense of smell can be malleable. In experiments, subjects have taken a sniff of something and described it in many different ways. But when they’re shown a label for that smell — say, “pumpkin spice” — their perceptions shift and their descriptions become more similar.

“Odors and sights go with certain places, like the aroma of pine and the crunching of needles beneath your feet,” he says. “They’re associated with a certain kind of experience. And then marketing taps into that, and it’s a cue for a product.”

Pumpkin spice doesn’t conjure happy memories for everyone. Kari-Jane Roze, who lives in Fredericton, Canada, loves many things about autumn, including back-to-school routines, changing leaves and hockey. But she’s not a fan of pumpkin pie or pumpkin bread — and she has a particular dislike for pumpkin spice lattes.

“The artificial flavor is disgusting,” says Roze, who works at New Brunswick Community College. “The only thing I do not like about fall is seeing everyone obsess over PSLs. Makes me want to shut off social media for a month.”

She won’t have to deal with those “PSLs” for long. The limited-time nature of the product is another thing that keeps customers hooked, marketing experts say. Last year, Starbucks’ holiday-themed drinks arrived on Nov. 3. And then, for devoted fans, the wait begins anew.

 

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Japan’s SoftBank returns to profit after gains at Vision Fund and other investments

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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.

Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.

Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).

SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.

The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.

WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.

SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.

SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.

SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.

The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.

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Yuri Kageyama is on X:

The Canadian Press. All rights reserved.

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Trump campaign promises unlikely to harm entrepreneurship: Shopify CFO

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Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.

“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.

“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”

Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.

On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.

If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.

These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.

If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.

However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.

He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.

“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.

Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.

The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.

Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.

Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.

Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.

Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.

Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”

In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.

“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:SHOP)

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RioCan cuts nearly 10 per cent staff in efficiency push as condo market slows

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TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.

The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.

The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.

RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.

The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.

RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.

This report by The Canadian Press was first published Nov. 12, 2024.

Companies in this story: (TSX:REI.UN)

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