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The October 2010 issue of Report on Business magazine.
The October 2010 issue of Report on Business magazine.

How Tim Hortons will take over the world Add to ...

Schroeder and Joyce hit it off, and a month later, they drove to Joyce's cottage near Owen Sound, Ontario. "We thought we'd have a glass of wine while the cottage warmed up," says Schroeder, a lawyer by trade. "The next thing we know, it's 8 in the morning, and we've been up all night talking about Tim Hortons. By the time I went to bed, I thought, 'I have to get into this business.' "

That came to pass in 1978, when Schroeder and one of his brothers bought a store in Chatham, Ontario. Schroeder kept up his law practice, while his brother quit the army to run the franchise (Tim Hortons insists that owners also be operators). By 1991, they were running half a dozen stores. When Schroeder was hired that year as Tim Hortons' VP of human resources and international development, he sold his stake to his brother.

If you were a Tim Hortons devotee back then, you might have noticed that the coffee in, say, Halifax didn't taste quite the same as it did in the chain's spiritual home base of Hamilton. That's because the chain bought its coffee from third-party roasters. Then-CEO Paul House decided the company needed to take control of the consistency of its brew, and to that end built a lab at the firm's Oakville HQ. "I was 'volunteered' to take cupping," says Schroeder drily. "We needed someone in senior management who understood coffee and the tweaking we do of the blend throughout the year." He spent four years working with consultant Joe Moenig-whom he describes as "the coffee guru of North America"-learning through blind tests to detect the earthiness of a shade-grown Sumatran and the caramel aroma of a Colombian.

In 2001, Tim Hortons bought a coffee plant in Rochester, New York, but it still didn't have nearly enough capacity to cover the needs of the entire burgeoning chain. So, in 2009, shortly after Schroeder succeeded House as CEO, Tim Hortons broke ground on the 74,000-square-foot, $30-million coffee plant in the Hamilton suburb of Ancaster. It packs no less than 1,100 pots-worth of coffee every minute.

This is Kevin West's realm. "On a good day on a blind test, I could tell you what country a coffee is from," says Schroeder. But West-the son of a roast master-can tell, just by glancing at a handful of raw beans, what region they're from, whether they were grown in sun or shade, and at what altitude.

The aroma of freshly roasted coffee permeates every corner of the plant. In the warehouse, skids are piled high with 132-pound sacks of beans from around the world. It is the job of the plant's cupping team to sample beans from every shipment before they move on to the next stage of processing; the tasters each break, slurp and spit 25,000 cups a year.

"Central and South America are coming off the worst crop in 44 years," West says as he slaps a sack of beans. And Colombia was deluged with rain for 16 months straight, diminishing crops. That has helped drive standard-grade coffee to a 12-year high of $1.75 (U.S.) per pound. The top-quality beans Tim Hortons buys-West says they compete with Starbucks for the finest Arabica beans on the market-are much pricier.

One of the plant's 50 employees stands alone atop the giant hopper, ripping open sacks and pouring the beans into the machine for cleaning. The hopper separates out detritus-pieces of corn, sticks, stones, even the occasional bullet. Then the raw beans are drawn via pneumatic tubes into six vast silos-one for each bean that is currently being used in Tim Hortons' blend-and then to the mixer.

From there, the beans are sucked into the roaster-which looks like something out of a 1950s sci-fi comic-and subjected to up to 19 temperature changes until they begin to pop, signalling that they're done. "We took our taste buds and programmed them into the roaster," says West proudly. "It's like a fingerprint." To lock in the flavour, the beans must then temper for two hours. "If they go through the grinder when they're too soft, they won't taste right," says West, pointing to several bins that loom over the automated assembly line where the grounds are packaged. In short order, the beans are aboard trucks heading for Tim Hortons stores across Canada and the United States.

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