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Five Pumpkin Spice Industries
Five industries cash in on returned pumpkin spice craze
Pumpkin-style food, drink and other miscellaneous products have inundated the autumn product lines
of several key industries for quite a few years now. This year, the trend seems to be back in full force
even before the leaves turn brown; by mid-August, several stores and coffee shops began advertising
pumpkin-spiced everything, effectively ushering in the end of summer. What once was a temporary
treat found only in coffee houses and donut shops has expanded into a multimillion-dollar seasonal
phenomenon that has become an enormous marketing opportunity for the five key US industries listed
below.
Disclaimer: While the typical “pumpkin spice” offering boasts a combination of cinnamon, nutmeg,
cloves and other spices commonly found in pumpkin-related recipes, most of these limited-time
products offered do not actually include natural pumpkin.
Coffee Shops
Although coffee shops may not generate the majority of the US’s pumpkin-based revenue, it is
undoubtedly the widespread success of the pumpkin spice latte that has kick-started the seasonal flavor
trend. While the pumpkin spice latte may have started around 2003, it did not reach its current level of
high consumer anticipation until the past five years. The success of the drink is largely attributable to
Starbucks Corporation, which currently represents the largest company in the Coffee and Snack Shops
industry (IBISWorld report 72221b), having initially released the drink back in 2013. Generating an
estimated 43.0% of the industry’s market share, Starbucks has increased its domestic, industry-specific
revenue at an annualized rate of 11.7% to total $17.0 billion in projected sales over the five years to
2016. This far outpaces the rest of the industry, which is projected to increase an annualized 2.8% to
$45.3 billion in industry revenue during the five-year period. The success of Starbucks’ most popular
seasonal drink has encouraged its competitors to partake in the annual event, causing sales of pumpkin
spice lattes to increase 13-fold from 2014 to 2015.
Candle Manufacturing
Pumpkin-scented candles of various kinds are also a fall staple for many operators in the Candle
Manufacturing industry (IBISWorld report OD4260). According to data from the National Candle
Association (NCA), an estimated seven out of 10 households regularly use candles. Furthermore,
according to the same data, over 70.0% of consumers consider candles an appropriate housewarming
gift. Since the value of residential construction is expected to increase an annualized 8.0% over the five
years to 2016, housing expenditure will also rise, boosting demand for decorative items such as scented
candles.
Demand for scented candles is also spurred by the holiday season, which is a high-spending period for
many consumers. According to the NCA, around one-third of total candle sales occur over the holiday
season, and 75.0% of consumers consider candles to be an appropriate holiday gift. This year, per capita
disposable income is expected to increase 2.3%, enabling consumers to spend more on discretionary
items like pumpkin-scented and other seasonally appropriate candles. The industry’s largest player, the
Yankee Candle Company, has capitalized on this increased demand by offering over 80 variations of
pumpkin-scented candles and wax melts, ranging from spiced pumpkin to pumpkin buttercream. The
Yankee Candle Company comprises nearly half of the Candle Manufacturing industry’s total revenue.
The company’s industry-specific revenue is expected to grow at an annualized rate of 8.3% over the five
years to 2016, reaching $889.2 million. Moreover, overall revenue for the Candle Manufacturing
industry is anticipated to increase an annualized 5.8% during the five-year period, to total $1.8 billion in
2016.
Snack Food Production
Snack food producers receive the glut of the pumpkin-flavored demand over the fall season, thanks to
the array of products offered to consumers in the form of traditional favorites. Items such as Kellogg’s
pumpkin spice NutriGrain bars, Pumpkin Spice Frosted Mini Wheats, as well as Pringles Pumpkin Pie
Spice Chips, all offer twists on consumer favorites. Major industry player PepsiCo., which operates in the
Snack Food Production industry (IBISWorld report 31191) through its Lay’s, Doritos and Fritos labels,
also offers a decent amount of seasonal offerings; in addition, Stacy’s Cinnamon Sugar Pita Chips, as well
as a line of pumpkin seeds through its SPITZ label also have seasoning offerings. Snacks are primarily
consumed as a transient meal, typically during commutes, travel, or at work, in lieu of a full meal. As
unemployment continues to fall and consumers return to work, demand for on-the-go meals and snacks
are expected to increase.
Furthermore, according to data compiled by the Commerce Department, consumers spent more money
on dining out in 2015 than on meals prepared at home, further contributing to rising demand for the
Snack Food Production industry. As a result, industry revenue is expected to grow an annualized 2.9%
over the five years to 2016, reaching $38.0 billion. As shifting food consumption trends affect the
strategies of snack food producers over the five-year period, growing health concerns about eating
foods high in sodium, fat and sugar have made some consumers wary of traditional snacks. Therefore,
seasonal offerings, such as nuts and seeds, are expected to increase significantly in the five years to
2016. In particular, pumpkin seeds and flavored nuts are expected to stand out during the autumnal
season.
Supermarkets and Grocery Stores
The pumpkin spice craze is perhaps most prevalent throughout the Supermarkets and Grocery Stores
industry (IBISWorld report 44511), which retails the widest variety of the seasonal treat. Industry player
Trader Joe’s is perhaps the most wholehearted contributor to the trend, with its pumpkin-style cheese
cakes, cinnamon rolls, cereal bars, pies, chips, waffles, ground coffee, scones, granola cereal, ice cream,
cookies, cookie butter and biscotti private-label brands. Trader Joe’s is projected to generate $14.0
billion in revenue in 2016 and is estimated to comprise a 2.3% market share within the Supermarkets
and Grocery Stores industry.
Pumpkin-flavored product sales across the industry totaled over $360.0 million in 2015. While this
represents a minor portion of the industry’s total revenue (IBISWorld projects the Supermarkets and
Grocery Stores industry to generate $601.8 billion in total sales in 2016), pumpkin desserts have become
an increasingly popular seasonal item. Forbes estimates that total sales of pumpkin goods will increase
to more than $500.0 million in 2016. Pumpkin-pie filling remains the most popular pumpkin-style
product for supermarkets and grocery stores due to its traditional appeal over newer, unconventional
pumpkin desserts and pastries.
Craft Beer
The Craft Beer Production industry has never been averse to experimentation with different flavors,
ingredients and adjuncts. This may be partly responsible for the wild success of seasonal pumpkin beers
that fill bars and supermarkets as early as August each year. As beer drinkers continue to shift their
alcoholic beverage consumption preferences in favor of craft beer instead of standard premium brands,
limited-time seasonal flavors have caught on quickly. In fact, IBISWorld estimates that the seasonal beer
category represents the second-largest product segment for the Craft Beer production industry (19.1%
of sales), trailing only India Pale Ales (20.4% of sales) in popularity. Brewers expect pumpkin beer to
continue the industry’s remarkable growth trajectory; the Craft Beer Production industry increased by
an annualized 20.1% over the five years to 2016 to reach $5.8 billion in revenue. The Breweries industry,
which represents all major domestic beer manufacturers, generated a comparably sluggish 4.6%
annualized rate of growth over the same period.
About IBISWorld Inc.
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IBISWorld offers a comprehensive database of unique information and analysis on every US industry.
With an extensive online portfolio valued for its depth and scope, the company equips clients with the
insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a
range of business, professional service and government organizations through more than 10 locations
worldwide. For more information, visit www.ibisworld.com or call 1-800-330-3772.