Pumpkinomics

In a sluggish economy, the Pumpkin Spice Latte thrives—small luxuries become bigger rituals, and this year’s PSL season is poised to be stronger than ever.

Every September, Canadians welcome back pumpkin spice as though it were an old friend. The crisp air, the return of routine after summer, and the smell of cinnamon, nutmeg, and clove signal a familiar ritual: the launch of the pumpkin spice season. Yet beyond its cozy cultural aura, pumpkin spice is a remarkable economic case study. It is a multi-billion-dollar global industry that reveals much about consumer psychology, seasonal demand shocks, and the resilience of indulgence in an era of elevated food costs.

Globally, the pumpkin spice market is now worth an estimated US$1.1 billion in 2025 and is projected to more than double to US$2.2 billion by 2032, supported by annual growth exceeding ten percent. Within this category, Starbucks’ Pumpkin Spice Latte (PSL) remains the anchor. Since its 2003 debut—tested in Vancouver before its wider rollout—the PSL has sold hundreds of millions of units, generating over US$500 million annually across North America. For a product available just a few months a year, this scale of revenue is extraordinary. It demonstrates how the right flavour profile can anchor not only consumer rituals, but entire retail cycles.

Canada mirrors global trends but with distinct features. Statistics Canada reports that in 2024, more than 11,500 acres of pumpkins were planted nationwide, serving both fresh consumption and the booming processed sector. Canada accounts for roughly US$154 million of the global pumpkin spice market, ranking just behind the United States in per-capita terms. This is striking given Canada’s smaller population and highlights how deeply consumers have internalized pumpkin spice as part of their autumn identity.

From an economic standpoint, pumpkin spice represents a convergence of nostalgia and affordable indulgence. In an environment where grocery bills remain elevated and restaurants feel increasingly out of reach, consumers lean on symbolic luxuries. A $5 or $6 latte is discretionary, but compared to the cost of dining out, it is accessible. This explains why the product retains momentum despite saturation. In 2024, U.S. dollar sales of pumpkin spice beverages rose 15 percent year-over-year, even though unit sales declined. Households bought fewer drinks, but they paid more when they did indulge—a textbook example of the “lipstick effect,” where small luxuries thrive as larger ones are cut back.

Corporate marketing has reinforced this dynamic. Starbucks has repeatedly moved its campaign earlier, launching on August 21 in 2024 and August 26 in 2025, strategically extending the sales window to capture more consumer dollars. Other chains, from Dunkin’ to McDonald’s, have joined the arms race. The question is how long this strategy can stretch before novelty erodes. When everything from cereal to dog treats is offered in pumpkin spice, the risk of overexposure is real. Yet the numbers suggest that, for now, consumers remain willing to pay a premium for what feels like comfort wrapped in a cup.

There is also a supply-side dimension. Unlike artificial flavour fads, pumpkin spice depends on real agricultural inputs. Canadian pumpkin growers, particularly in Ontario and Quebec, enjoy seasonal boosts, though pumpkins remain a minor crop compared with grains or oilseeds. The critical pressure points are in the spice trade—cinnamon, nutmeg, and clove—commodities highly sensitive to climate shocks and geopolitical disruptions. Rising input costs may eventually force companies to make trade-offs between protecting margins and raising prices, testing the limits of affordability for consumers.

Ultimately, pumpkin spice is more than a flavour. It is an economic signal: evidence that consumers cling to small rituals even in times of uncertainty. It demonstrates how scarcity and seasonality sustain willingness to pay, and how nostalgia itself functions as an economic asset. For policymakers and industry leaders, the message is clear—food is not only sustenance, but also identity, memory, and reassurance.

The natural question is: what comes after pumpkin spice? If consumer culture is cyclical, the next PSL-style phenomenon may emerge from equally nostalgic territory. Early contenders include sweet potato and marshmallow blends, maple-based lattes, and matcha-pumpkin hybrids already trending on social media. Whether any of these can replicate the PSL’s twenty-year run remains uncertain. What is clear is that Canadians will continue to pay for rituals that feel both familiar and comforting. As long as pumpkin spice delivers on those fronts, it will remain not just a cultural marker of fall, but also a durable economic one.