July 3, 2020

Winnipeg
20° C, Overcast

Full Forecast

WEATHER ALERT

Help us deliver reliable news during this pandemic.

We are working tirelessly to bring you trusted information about COVID-19. Support our efforts by subscribing today.

No Thanks Subscribe

Already a subscriber?

Advertisement

Advertise With Us

Opinion

Tim Hortons suffers identity crisis

Nathan Denette / The Canadian Press Files</p><p>Parent company RBI announced in December that Tim Hortons president Alex Macedo, seen here at the chain’s Hockey Hall of Fame location in Toronto, would be stepping down.</p>

Nathan Denette / The Canadian Press Files

Parent company RBI announced in December that Tim Hortons president Alex Macedo, seen here at the chain’s Hockey Hall of Fame location in Toronto, would be stepping down.

Tim Hortons has had what is likely one of the strangest years in its history. Most of the iconic chain’s decisions in recent months have been inexplicable. Canadians have been left scratching their heads.

Take the Beyond Meat burger as an example: Tim Hortons took this well-promoted plant-based item off its menu in September 2019, only two months after introducing it at most of its 4,800 locations across the country. The burger is now only sold at Ontario and B.C. outlets.

Proteins are not even Tim Hortons’ strategic focus, so customers had to be confused as to why Beyond Meat was such a focal point over the summer. Tim Hortons is about coffee, doughnuts, muffins, bagels and the odd soup or sandwich. Unlike Popeyes Louisiana Kitchen or Burger King, other chains owned by Tim’s parent company Restaurant Brands International, Tim Hortons is not about proteins.

Given Burger King’s partnership with Impossible Foods, one of Beyond Meat’s chief rivals, RBI had its portfolio of chains in mind and not the welfare of the Tim’s brand equity. It was a big mistake.

Then RBI announced in December that Alex Macedo, Tim Hortons CEO, was leaving.

For a CEO with a reported net worth of about $26 million and an annual salary of $14 million, his departure was strangely discreet.

The announcement was made during the holiday season, when most of the continent was at a standstill.

Macedo, 41, was North American head of Burger King for several years before becoming CEO of Tim Hortons three years ago. So he’s been part of the RBI family for some time. As a Brazilian, he has tried to disconnect himself from 3G Capital’s reputation of being cost-obsessed, but to no avail (3G Capital is one of RBI’s main shareholders).

But it was awkward that the announcement said Macedo would remain available for the transition. Macedo has had a rocky tenure as CEO and leaves a chain reeling financially, trying to figure out how to grow organically and maintain its market dominance in Canada.

Then came Timbits cereal. Tim Hortons launched the breakfast cereal on Jan. 7, in partnership with cereal giant Post.

Synergies between the food service and retail sectors are becoming more apparent. Increasingly, food service brands such as Swiss Chalet, St. Hubert and others attempt to increase their exposure in retailing. So it wasn’t surprising to see Tim Hortons trying to do the same thing, moving beyond coffee.

But introducing a sugar-filled cereal with an array of artificial flavours makes little sense when consumers are increasingly conscious of their health. The Dream Donuts line, out of Tim Hortons’ boutique Innovation Café in Toronto, also extended the chain’s line of unhealthy products, although reviews overall have been positive.

Let’s be honest — extending its doughnut menu made much more sense than the Beyond Meat move last July.

Finally, Tim Hortons’ attempt to capitalize on "Megxit" backfired spectacularly. Hearing that Prince Harry and Meghan Markle could be moving to Canada, Tim Hortons opted to offer the Duke and Duchess of Sussex free coffee for life through social media.

Within minutes, the chain was accused of undermining its low-paid employees and people who suffer from food insecurity. Offering free coffee to two people who could buy several Tim Hortons stores was not a stroke of marketing genius.

And, of course, who can forget the much-despised new coffee cup lids, which apparently took two years to develop.

Over the last few years, it seems Tim Hortons has deliberately tried to make itself the easiest of targets for criticism.

Many company decisions made little strategic sense and have confused the brand identity, at least in Canada. Innovation through trial and error speeds up change. But successive failures will create doubters.

Overseas, however, Tim Hortons is getting more traction than ever. After opening its first store in China in February 2019, it has more than 20 stores in the country and plans to open 1,500 stores there within 10 years.

But as Tim Hortons grows its global footprint, mishaps have undermined the brand.

Tim Hortons is experiencing an identity crisis, which is likely why some changes at the top were warranted. Their marketing and product development groups are simply out of touch with reality.

RBI is apparently still trying to figure how Tim Hortons can fit with its other mammoth chains, including Burger King and Popeyes, and how it can generate managerial synergies among them all. While total and same-store sales are up for both Burger King and Popeyes, they have been sluggish at Tim’s for the last 12 months.

Perhaps RBI will conclude that Tim Hortons is a unique brand and the store experience is critical to its success. The launch of the Tim’s loyalty program was likely the chain’s best move this past year, even if it was long overdue.

Despite its blunders made at the expense of franchisees and customers, Tim Hortons enjoys one of Canada’s most influential private monopolies. The chain serves eight of every 10 cups of coffee consumed outside the home in Canada. In food service, this is unprecedented

The pressure to maintain such market dominance is extraordinary and may be underestimated by many Canadians.

Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.

— Troy Media

Advertisement

Advertise With Us

Your support has enabled us to provide free access to stories about COVID-19 because we believe everyone deserves trusted and critical information during the pandemic.

Our readership has contributed additional funding to give Free Press online subscriptions to those that can’t afford one in these extraordinary times — giving new readers the opportunity to see beyond the headlines and connect with other stories about their community.

To those who have made donations, thank you.

To those able to give and share our journalism with others, please Pay it Forward.

The Free Press has shared COVID-19 stories free of charge because we believe everyone deserves access to trusted and critical information during the pandemic.

While we stand by this decision, it has undoubtedly affected our bottom line.

After nearly 150 years of reporting on our city, we don’t want to stop any time soon. With your support, we’ll be able to forge ahead with our journalistic mission.

If you believe in an independent, transparent, and democratic press, please consider subscribing today.

We understand that some readers cannot afford a subscription during these difficult times and invite them to apply for a free digital subscription through our Pay it Forward program.

The Free Press would like to thank our readers for their patience while comments were not available on our site. We're continuing to work with our commenting software provider on issues with the platform. In the meantime, if you're not able to see comments after logging in to our site, please try refreshing the page.

You can comment on most stories on The Winnipeg Free Press website. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or digital subscriber to join the conversation and give your feedback.

Have Your Say

Have Your Say

Comments are open to The Winnipeg Free Press print or digital subscribers only. why?

Have Your Say

Comments are open to The Winnipeg Free Press Subscribers only. why?

By submitting your comment, you agree to abide by our Community Standards and Moderation Policy. These guidelines were revised effective February 27, 2019. Have a question about our comment forum? Check our frequently asked questions.

Advertisement

Advertise With Us