Sylvain Charlebois is a professor of food distribution and policy, and director of the Agri-Food Analytics Lab, at Dalhousie University
Tim Hortons is finishing what is likely one of the strangest years in its history. Most of the iconic chain’s decisions have left Canadians scratching their heads. Many of its choices in recent months have been simply inexplicable.
Take the Beyond Meat burger and breakfast sandwich: Tim Hortons took the well-promoted plant-based burger off its menu in September, 2019, only two months after introducing it at most of its 4,300 locations across the country. The breakfast sandwich is now only sold at Tims in Ontario and B.C. Proteins are not even Tim Hortons’ strategic focus, but they still ended up confusing customers as to why Beyond Meat had been such a focal point over the summer. Tim Hortons is about coffee, doughnuts, muffins, bagels and the odd soup or sandwich. Unlike Popeyes or Burger King, other chains owned by Tims parent company Restaurant Brands International (RBI), Tim Hortons is not about proteins. Given Burger King’s partnership with Impossible Foods, one of Beyond Meat’s chief rivals, RBI clearly had its portfolio of chains in mind, and not the welfare of the Tims brand equity. Big mistake.
Secondly, RBI announced during the December holiday season that Alex Macedo, Tim Hortons’ president, was leaving. Mr. Macedo was North America’s head of Burger King for several years before becoming president of Tim Hortons three years ago. So, he’s been part of the RBI family for quite some time. As a Brazilian, he has tried to disconnect himself from 3G Capital’s reputation of being cost-obsessed (3G Capital is the largest shareholder of RBI). But it was awkward that the announcement said Mr. Macedo would remain available for the transition. Mr. Macedo has had a rocky tenure as Tims president, and leaves a chain reeling financially, trying to figure out how to expand organically and maintain its market dominance in Canada.
And then came Timbits cereal, which will be available in grocery stores across the country later this year. Announced just a few days ago, Tim Hortons is launching the breakfast cereal, in partnership with Post, well-known for its past successes in the category.
Synergies between food service and retail sectors are becoming more apparent. Increasingly, food service brands such as Swiss Chalet, St. Hubert and others are attempting to increase their exposure in retailing. It was not surprising to see Tim Hortons trying to do the same thing, beyond its coffee. But the call to introduce a sugar-filled cereal with an array of artificial flavours made little sense in an era when more consumers are increasingly conscious of their health. The “Dream Donuts” line, coming out of Tim Horton’s boutique Innovation Café in Toronto, also extended the chain’s line of unhealthy products, although reviews overall have been positive. And let’s be honest, extending its doughnut menu made much more sense than the Beyond Meat move in July, 2019.
Finally, Tim Hortons’ attempt to capitalize on “Megxit” backfired spectacularly.
Hearing that Prince Harry and Meghan could be moving to Canada, Tim Hortons opted to offer both the Duke and Duchess of Sussex free coffee for life, should they move to our country. The offer was made through social media. Within minutes – seconds really – the chain was accused of undermining its low-paid employees and people who suffer from food insecurity. Offering free coffee to two individuals who could arguably buy several Tim Hortons stores was not a stroke of marketing genius.
And, of course, who can forget the ruckus raised by the new cup lids, which apparently took two years to develop.
Over the past few years, it seems Tim Hortons has deliberately tried to make itself the easiest of targets for criticism. Many of their decisions made little strategic sense and have confused the brand identity, at least in Canada.
Innovation through trial and error is encouraged as it speeds up change. But successive failures will create doubters. Overseas, though, Tim Hortons is getting more traction than before. After opening its first store in China in February, 2019, it now has more than 20 stores in the country, and plans to open 1,500 stores there within 10 years. At the same time as Tim Hortons is growing its global footprint, mishaps have undermined the brand.
Tim Hortons is clearly experiencing an identity crisis, which is likely why some changes at the top were warranted. Its marketing and product development groups are simply out of touch with what is happening out in the field and in stores. RBI is still trying to figure how Tim Hortons can fit with its other mammoth chains, Burger King and Popeyes, and how it can generate managerial synergies among all of these. Perhaps, at some point, RBI may conclude that Tim Hortons as a brand is uniquely different, and the store experience is critical to their success. While total and same-store sales are up for both Burger King and Popeyes, they have been sluggish at Tims for the past 12 months.
The launch of its loyalty program was likely the chain’s best move this past year, even if it was long overdue.
Despite the blunders made at the expense of franchisees and customers, Tim Hortons enjoys one of Canada’s most influential private monopolies. The chain says it serves eight of every 10 cups of coffee consumed outside the home in Canada. In food service, this figure is simply unprecedented. The pressure to maintain such market dominance is extraordinary and may be underestimated by many Canadians.