Emotion, scarcity drive demand for seasonal products like pumpkin spice

Pumpkin spice is back on the menu – in everything from cereal, Twinkies and doughnuts to lattes, coffee creamer and beer and seltzers. I’m literally writing this story as I drink a cup of generic pumpkin spice coffee brewed in my Keurig.

A Virginia Tech economist says the sudden desire for pumpkin spice and apple cinnamon treats and beverages this time of year is a great example of how scarcity, and emotion, can drive seasonal demand for a product.

“Part of the joy from these items comes from the fact that they aren’t available two-thirds of the year,” says Jadrian Wooten, a collegiate associate professor of economics at Virginia Tech in his Economist newsletter. “That first taste brings back positive memories for people, but eventually that nostalgia wears off.”

According to Nielsen, consumers spend around $500 million annually on pumpkin spice flavored products in the U.S. alone. And those numbers don’t include coffee shop offerings or self care products like lotions, lip gloss and shower gel. And then there are the apple offerings … like apple dumplings and apple crisp.

“The second drink may still be really good, but it’s usually not as good as the first one. The same phenomenon happens with the third drink, fourth drink, and so on,” said Wooten.

By the time you get tired of pumpkin-flavored everything, it’s time to switch to the undisputed flavor of winter: peppermint. With holiday offerings including peppermint bark, hot chocolate and candy canes.

Wooten says that if we convert that experience to economic language, drinking seasonal drinks or eating seasonal foods are each subject to diminishing marginal utility.

“Even though there may be an increase in demand, the release of pumpkin spiced items simply increases the happiness we gain overall. After enough time, that happiness wears down and we’re ready for the next seasonal treat,” said Wooten. “Thus, leaving the beverage off the menu and items off the shelves creates that longing. In a sense, pumpkin spice scarcity creates demand for pumpkin spice products.”