How Starbucks Monetizes The Holidays Around The World

Starbucks (NASDAQ:SBUX) has mastered the art of the limited-time offer (LTO). The company has a number of drinks for each season that it rotates onto its menu, and customers love them. That tactic works best during the fall, when audiences in the United States go mad for its Pumpkin Spice Latte (PSL) and during the Christmas holiday season, when it brings back a number of customer favorites.

The coffee chain has honed its LTO game in the U.S., but it now uses the tactic around the world. It does not, however, simply use the same tried-and-true drinks that Americans love in every market. Instead, the cafe company leverages its local knowledge for some truly unique beverages.

Why LTOs, and what's on the menu?

Starbucks uses LTOs to engage its customers. That might mean getting someone who hasn't visited in a while to stop by a store, or it could mean enticing a regular to spend more money as he or she indulges in a special drink. And, of course, the holy grail business case for an LTO is when it actually brings a completely new person into a store.

LTOs also generate positive media and social media coverage for the company. People enjoy showing photos of the more colorful drinks, and the press seems to delight in writing about them.

These tactics may have been proven in the U.S., but they work around the world. For the 2019 holiday season, Starbucks has a diverse lineup at its stores around the world full of drinks designed to match local preferences. These include (but are not limited to):

• Snowman Dark Mocha (Hong Kong): A dark chocolate mocha covered "with snowflakes toppings" and a candy snowman, this drink can be served hot, iced, or as a Frappuccino.
• Santa Boots Chocolate Frappuccino (Japan): This drink plays on the fact that Christmas stockings are known as "Santa boots" in Japan. This frozen blended drink has a "rich base of chocolatey sauce and chocolate chips, topped with crispy salted potato chips and finished with an edible cookie straw."
• Holiday French Vanilla Latte (Asia): This is a take on a traditional vanilla latte with blue and white sprinkles added for a "snow-like finish." It can be served hot, iced, or as a Frappuccino.
• Toasted Marshmallow Cocoa Hot Chocolate (Europe): A hot chocolate with mocha sauce "combined with marshmallow syrup, topped with marshmallow flavored whipped cream, and finished with a caramelized sugar topping."
• Ponche Navideno (Mexico): Perhaps the most unique beverage on this list, the Ponche Navideno plays on the Mexican tradition of Christmas punch. The Starbucks version is made with "warm hibiscus tea flavored with apple, guava, cinnamon, and brown sugar." It can be served hot or iced.
• The Coquito Creme Frappuccino (Puerto Rico): A white Frappuccino made without coffee, this blended beverage uses coconut syrup, white chocolate sauce, nutmeg, and cinnamon topped with whipped cream and spices.

A recipe for global success

Some of these drinks would fit in on an American Starbucks menu, while others might be seen as exotic. All of them accomplish the same thing: They drive customers into Starbucks and entice regulars to spend more.

Not every one of these beverages will become a seasonal favorite. Some will be brought back annually, while others may never come back or will become offerings in some years but not others. This system allows Starbucks to keep its menu fresh and have drinks that customers look forward to all year. That's a smart system that works around the world.

This article originally appeared in the Motley Fool.

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Starbucks. The Motley Fool has a disclosure policy.