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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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Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

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MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

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

Companies in this story: (TSX:TRZ)

The Canadian Press. All rights reserved.

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Dollarama keeping an eye on competitors as Loblaw launches new ultra-discount chain

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Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.

“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.

“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”

Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.

However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.

The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.

Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.

“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.

Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.

“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.

The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.

The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.

The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”

“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.

Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.

Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.

She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”

Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.

To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.

“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”

The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.

“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.

“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”

This report by The Canadian Press was first published Sept. 11, 2024.

Companies in this story: (TSX:DOL)

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U.S. regulator fines TD Bank US$28M for faulty consumer reports

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TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.

The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.

It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.

CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.

TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.

The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.

This report by The Canadian Press was first published Sept. 11, 2024.

Companies in this story: (TSX:TD)

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