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What You Need to Know About Starbucks' Pumpkin Spice Latte

Starbucks is adding a Chile Mocha along with its Pumpkin Spice Latte this fall. Image source: Starbucks.

Before 2003, when Starbucks (NASDAQ: SBUX) introduced what has become its best-selling seasonal drink, pumpkin was better known as a pie filling or a Halloween decoration. That changed when a small team working in product development led by Peter Dukes came up with what would eventually be called the Pumpkin Spice Latte, or PSL by its fans.

"Nobody knew back then what it would grow to be," Dukes said in a 2014 Starbucks press release. "It's taken on a life of its own." PSL officially launches this year on Sept. 6 though it's already being served.

The chain does not break out sales for the popular beverage, but it has used the phrase "the company's most popular seasonal beverage of all time" on multiple occasions. Starbucks told Time this week that it has sold 200 million PSLs since the coffee drink was first introduced in 2003. 

And while the drink was an instant hit when it was first released, according to Dukes, even its creator likely did not know how big it would become. Now, instead of simply not being on the menu one day and being on it the next, Starbucks rolls out the PSL in a similar fashion to how a big movie studio releases a potential blockbuster.

 "Pumpkin Spice Latte has become more than just a beverage." Dukes said in 2014. "It has become a harbinger of the season."

How is PSL being released?

It's worth noting that Starbucks no longer has the pumpkin spice space to itself. The chain that created the craze has been copied by rivals including Dunkin' Donuts (NASDAQ: DNKN) and Panera Bread (NASDAQ: PNRA). These chains not only have their own version of the pumpkin spice latte, but they infuse pumpkin flavor into coffees, muffins, doughnuts, and pretty much anything else you can imagine.

To combat the increased competition, Starbucks has made the launch of the PSL a major event. For 2016, the company sent an email on Sept. 1 to its rewards card members offering a link to a page where they could enter their phone number for the company to send them a pass to get a PSL before its official Sept. 6 release.

Starbucks admitted that the passes were just for show. "Although the official fall launch at Starbucks is September 6, PSL fans will be able to order the drink beginning today (September 1). Customers can choose to get an early access code from @TheRealPSL or just stop by a Starbucks store," the company wrote.

That's an interesting tactic because it makes members feel special by giving them a code, but the policy makes it so a barista would not have to deny someone without one. It's a smart way to build awareness for the launch, creating added hype around the drink and getting it media attention in a market now crowded with knockoffs.

Is the PSL worth the hype?

Last year, Starbucks actually changed the recipe for the PSL for the first time, adding actual pumpkin to the beverage. The new recipe consists of pumpkin spice sauce with real pumpkin, cinnamon, ginger, clove and nutmeg added to espresso and steamed milk then topped with whipped cream as well as a pumpkin pie topping.The drink can be served hot or cold or even as a Frappuccino.

The drink is not just about creating hype; the people who buy it actually spend more at Starbucks. During fall and winter 2014, PSL buyers spent an average of $7.81 versus $6.67 for non-buyers, according to data from The NPD Group as reported by CNBC. The PSL has also created a demand for pumpkin-flavored products with sales rising 11.6% in the year ending July 25, 2015, CNBC reported.

The PSL drives traffic, sales, and creates hype for the Starbucks brand. Its release serves as sort of quasi-permission to enjoy the indulgent drink, which has 380 calories, 14 grams of fat, and 50 grams of sugars in the grande (medium) 2% milk version and 520 calories, 21 grams of fat, and 64 grams of sugar for the venti (large) version with whole milk.

Starbucks has not just created a drink -- it has created an industry that its rivals have gladly joined. Each year, that means the chain has to raise the bar and it has done that this year by making the rollout a nearly weeklong event. And there is no end day for the promotion -- instead, it just fades away as stores run out of supplies to make it, prompting folks to buy while they can.

This year, Starbucks is also adding a spicy Chile Mocha that is topped with a sprinkle of topping made from ancho and cayenne chile pepper, cinnamon, paprika, sugar and sea salt. "We found that the ancho chile and cayenne perfectly complemented chocolate," said Starbucks. "It has a sweet touch to it, with an approachable amount of heat."

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Daniel Kline has no position in any stocks mentioned. He has never had a PSL, but can't wait to try the new chile drink. The Motley Fool owns shares of and recommends Panera Bread and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.