IHOP today announced it will launch its pumpkin spice menu Aug. 28 at participating locations nationwide. The seasonal offerings are popular for the restaurant chain, with over 1 million pumpkin pancakes sold each year. This statistic is perhaps not surprising given our collective clamoring for all-things-pumpkin-spice.
Consider Nielsen IQ data showing that Americans’ demand for pumpkin spice drove a 24% increase in such seasonally flavored grocery items from 2021 to 2022. More restaurant chains jump in every year as well, driving sales and frequency along the way. Remarkably, the power of pumpkin spice has only grown despite product launches coming earlier and earlier and even encroaching on our summer favorites. New data from SpotOn finds that over 600 pumpkin menu items had already been launched by Aug.7, for instance.
That said, IHOP’s seasonal menu seems to be timed appropriately. More notably, this launch is perhaps less about its signature pumpkin spice pancakes and more about its pumpkin spice cold foam cold brew. The 100% Arabica iced cold brew is sweetened with vanilla and topped with a pumpkin spice creamy cold foam, and it’s new to the menu this year.
A quick glance at consumer trends and it’s easy to see why IHOP has added another cold brew product. According to Grand View Research, the cold brew coffee market is expected to register a compound annual growth rate above 25% through 2025. Marketwatch reports that the cold brew market was worth $4 million in 2019 and is expected to reach $30 million by the end of 2026.
This growth has been reflected in a few recent earnings reports. Tim Hortons launched cold brew last year and just reported those sales have grown by nearly 17% year-over-year and now generate over 40% of the company’s mix. Dutch Bros. reported that approximately 90% of its beverages are served cold.
During Starbucks’ Q2 earnings call earlier this month, executives shared that cold drinks now make up 75% of domestic beverage sales, with cold foam drinks growing at the fastest clip. Just five years ago, cold drinks made up less than 50% of sales. Modifiers, including cold foam, now contribute over $1 billion in revenue annually for the company.
With such a meteoric rise, it’s not surprising to see more companies tapping into this dramatic consumption shift. Tim Hortons just added a new Cold Brew Concentrate for its retail division, for instance. Wendy’s launched a Frosty Cream Cold Brew last month. McDonald’s and Taco Bell are both testing cold brew options.
IHOP is one of the few non-limited-service chains to leverage this big opportunity. And why not? A cold foam cold brew not only complements the chain’s signature, breakfast-centric menu but also provides a more robust, in-demand lineup that could buoy sales throughout the day. IHOP is coming off its ninth consecutive quarter of comp sales growth, generating a 2.1% bump in Q2. During parent company Dine Brands’ earnings call earlier this month, CEO John Peyton said much of this momentum is coming from menu innovation supported by extensive customer research. There’s no doubt such research illustrated an extraordinary demand for cold brew.
Contact Alicia Kelso at [email protected]