Tim Hortons

This article is about the Canadian restaurant chain. For the ice hockey player who co-founded the chain, see Tim Horton.
Tim Hortons Inc.
Subsidiary
Industry Restaurants[1]
Founded Hamilton, Ontario (May 17, 1964)[2]
Founders
Headquarters Oakville, Ontario, Canada
Number of locations
 4,492 (September 30, 2016)[3]
Areas served
Key people
 Alex Behring
(Chairman of Restaurant Brands International)
Daniel Schwartz
(CEO of Restaurant Brands International)
Elias Diaz Sese
(President of Tim Hortons)
Revenue Increase US$4.0522 billion (2015 RBI)[4]
Increase US$511.7 million (2015 RBI)[4]
Number of employees
 100,000 (2008)
Parent Restaurant Brands International
Website TimHortons.com

Tim Hortons Inc. (known internationally as Tim Hortons Cafe and Bake Shop) is a multinational fast food restaurant based in Canada, known for its coffee and doughnuts. It is also Canada's largest quick service restaurant chain; as of September 30, 2016, it had a total of 4,492 restaurants in nine countries.[3][5][6][7]

It was founded in 1964 in Hamilton, Ontario, by Canadian hockey player Tim Horton and Jim Charade, after an initial venture in hamburger restaurants.[8][9] In 1967, Horton partnered with investor Ron Joyce, who assumed control over operations after Horton died in 1974. Joyce expanded the chain into a multimillion-dollar franchise. Charade left the organization in 1966 and briefly returned in 1970 and 1993 through 1996.

On August 26, 2014, Burger King agreed to purchase Tim Hortons for US$11.4 billion; the chain became a subsidiary of the Oakville-based holding company Restaurant Brands International on December 15, 2014, which is majority-owned by Brazilian investment firm 3G Capital.

History

1964-89: Tim Horton and Ron Joyce

Tim Horton's store signage at the site of first franchise, pictured in June 2007.

The chain's first store opened on May 17, 1964, in Hamilton, Ontario,[2] under the name "Tim Horton Donuts"; the name was later abbreviated to "Tim Horton's" and then changed to "Tim Hortons" without the possessive apostrophe. The business was founded by Miles G."Tim" Horton, who played in the National Hockey League from 1949 until his death in a traffic collision in 1974.[10][11] Horton had an initial venture in hamburger restaurants.[8]

Soon after Horton opened the store, he met Ron Joyce, a former Hamilton police constable. In 1965, Joyce took over the fledgling Tim Horton Donut Shop on Ottawa Street North in Hamilton. By 1967, after he had opened up two more stores, he and Tim Horton became full partners in the business. Upon Horton's death in an auto crash in 1974, Joyce bought out the Horton family's shares for $1 million and took over as sole owner of the existing chain of forty stores. Joyce expanded the chain quickly and aggressively in geography and in product selection. The 500th store opened in 1991.[12]

Ron Joyce's aggressive expansion of the Tim Hortons business resulted in major changes to the Canadian coffee and doughnut restaurant market. Many independent doughnut shops and small chains were driven out of business, while Canada's per-capita ratio of doughnut shops surpassed those of all other countries.[13]

1990s: Name change and growth

Tim Hortons logo as used in the mid-1990s, and still the chain's most common outdoor sign.

The company had originally been incorporated as Tim Donut Limited.[9] By the 1990s, the company name had changed to The TDL Group Ltd. This was an effort by the company to diversify the business, removing the primary emphasis on doughnuts, and continuing the expansion of the menu options as consumer tastes broadened.[12]

Some older locations retain signage with the company's name including a possessive apostrophe, despite the fact that the official styling of the company's name has been Tim Hortons, without an apostrophe, for at least a decade.[14] The company had removed the apostrophe after signs using the apostrophe were interpreted by some to be breaking the language sign laws of the Province of Quebec in 1993. The removal of the apostrophe allowed the company to have one common sign image across Canada.

Although a number of Quebec locations have bilingual menuboards, the decision to have both languages represented is left to the discretion of each franchise owner. Some locations have French-only menu boards. It is the strong recommendation to all the Quebec restaurants from the TDL Group Corporation that they post bilingual menuboards in accordance with the standards being enforced by the Office québécois de la langue française.[15]

1992-95: Merger with Wendy's

A Tim Hortons/Wendy's joint restaurant in Markham, Ontario in 2015.

In 1992, the owner of all Tim Hortons and Wendy's Restaurants in Prince Edward Island, Daniel P. Murphy, decided to open new franchise outlets for both brands in the same building in the town of Montague. Murphy invited Joyce and Wendy's chairman Dave Thomas to the grand opening of the "combo store", where the two executives met for the first time and immediately established a rapport. Murphy's success with combining coffee and doughnuts with Wendy's fast food led to August 8, 1995 acquisition of and merger with TDL Group by Wendy's International, Inc., an American company.[16] Joyce became the largest shareholder in Wendy's, even surpassing Thomas. TDL Group continued to operate as a separate subsidiary from its head office in Oakville, Ontario, although Joyce eventually retired from active management to pursue other interests.

The sale was widely commented on in the media. In 1995, the Toronto Star had a story reflecting on Tim Hortons "selling out" to Wendy's with "the spectacle of another great Canadian icon, one more priceless chocolate coconut cream-filled dutchie glazed cruller Timbit of our precious heritage, gone to Yankee burgerfat, (rounding) out the menus of the two chains by blending Tim Hortons morning meals and snacks with the strength enjoyed by Wendy's in lunches and dinners; burp; and nobody around to pass the Maalox?"[17]

2002-06: Regaining independence

Tim Hortons franchises spread rapidly and eventually overtook McDonald's as Canada's largest food service operator. The company opened twice as many Canadian outlets as McDonald's by 2005,[18] and system-wide sales also surpassed those of McDonald's Canadian operations as of 2002.[19] The chain accounted for 22.6% of all fast food industry revenues in Canada in 2005.[18]

Under pressure from major investors Peter May and Nelson Peltz,[20] in late 2005, Wendy's announced it would sell between 15% and 18% of the Tim Hortons operations in an initial public offering, which was completed on March 24, 2006, and subsequently said it would spin off to shareholders its remaining interest by the end of 2006.[21] Wendy's cited increased competition between the two chains and Tim Hortons' increasing self-sufficiency as reasons for its decision, but the company had been under shareholder pressure to make such a move because of the strength and profitability of the Tim Hortons brand.[22] Peltz in 2008 acquired Wendy's after pressuring them initially to spin off Tim Hortons.

Shares of the company began trading on March 24, 2006, with an initial public offering of C$27 per share, raising over $700 million in the first day of trading. On September 24, 2006, Wendy's spun off the rest of its shares in Tim Hortons, by distributing the remaining 82% to its shareholders.[23] On the same day, Tim Hortons was added to Canada's benchmark stock-market indicator, the S&P/TSX Composite Index, and to the S&P/TSX 60.[24] Despite maintaining its operational headquarters in Oakville, the spun-off holding company, Tim Hortons Inc., was initially incorporated in Delaware.

As of March 2006, Tim Hortons commanded 76% of the Canadian market for baked goods (based on the number of customers served) and held 62% of the Canadian coffee market (compared to Starbucks, in the number two position, at 7%).[25]

2007-13: Repatriation

On June 29, 2009, Tim Hortons Inc. announced that, pending shareholder approval, the chain's operations would be reorganized under a new publicly traded company, also named "Tim Hortons Incorporated," incorporated under the Canada Business Corporations Act. The change was being made primarily for tax purposes.[26][27] On September 28, 2009, Tim Hortons Inc. announced it had completed the reorganization of its corporate structure to become a Canadian public company.[28][29]

In November 2010, Tim Hortons extended Interac debit payment system acceptance to most of its stores. The company previously began accepting Interac in its stores in Western Canada in 2003 and, later, MasterCard and MasterCard PayPass across most of its stores in 2007. The company often indicated the delay of broader or wider electronic payment acceptance was to "ensure speed of service".[30][31] In 2012, Tim Hortons began accepting Visa cards, and in 2013, began accepting American Express cards.

As of late 2013, Tim Hortons had "4,350 cafes across the world, out of which 3,500 are in Canada, 817 in the US and 33 in GCC. The Toronto Stock Exchange listed company recorded revenues of $794 million and net profit of $111 million in the September quarter."[32]

2014: Merger with Burger King

On August 24, 2014, US fast food chain Burger King announced that it was in negotiations to merge with Tim Hortons Inc;[33][34] the proposed $18 billion merger would involve a tax inversion into Canada, with a new holding company majority-owned by 3G Capital, and the remaining shares in the company held by current Burger King and Tim Hortons shareholders. A Tim Hortons representative stated that the proposed merger would allow Tim Hortons to leverage Burger King's resources for international growth; the two chains would retain separate operations post-merger.[35] News of the proposal caused Tim Hortons' shares to increase in value by 28 percent.[36]

On August 25, 2014, Burger King officially confirmed its intent to acquire Tim Hortons Inc. in a deal totalling CDN$12.5 billion (US$11.4 billion).[37] 3G Capital offered to purchase the company at $65.50 per-share, with existing shareholders receiving $65.50 in cash and 0.8025 shares in the new holding company: per-share—all-cash ($88.50) and all-shares (3.0879) options were also made available. The agreement planned to result in 3G Capital (which held a 71% majority stake in Burger King) holding a 51% majority stake in the new company, Tim Hortons' existing shareholders owning 22%, and Burger King's owning 27% with the new entity based in Oakville and listed on both the TSX and New York Stock Exchange. Per the agreement, Burger King CEO Daniel Schwartz became CEO of the company, with existing Tim Hortons CEO Marc Caira becoming vice-chairman and director; Burger King itself still operated out of its existing headquarters in Miami. It was announced the deal would form the third-largest fast food restaurant company in the world.[36] On October 28, 2014, the deal was approved by the Competition Bureau of Canada,[38] but had yet to be approved by Industry Canada. The Bureau ruled that the deal was "unlikely to result in a substantial lessening or prevention of competition."[39]

Former CEO Marc Caira reassured the integrity of Tim Hortons following the purchase, stating that the acquisition would "enable us to move more quickly and efficiently to bring Tim Hortons iconic Canadian brand to a new global customer base."[36][40] On October 30, 2014, various media covered a Canadian Centre for Policy Alternatives study which suggested that Burger King’s proposed takeover of Tim Hortons is "likely to have overwhelmingly negative consequences for Canadians."[41][42] This study analysed Burger King's private equity owner, 3G Capital, past takeovers of Burger King, Heinz, and Anheuser-Busch and declared that "it has a 30-year history of aggressive cost cutting, which could hurt Tim Hortons employees, small-businesspeople, Canadian taxpayers, and consumers."[41][43]

The deal was approved by Minister of Industry James Moore (of the governing Conservative Party of Canada) on December 4, 2014: The two companies agreed to Moore's conditions, requiring that the Burger King and Tim Hortons chains retain separate operations and not combine locations, maintain "significant employment levels" at the Oakville headquarters, and ensure that Canadians make up at least 30% of Tim Hortons' board of directors.[44] Tim Hortons shareholders approved the merger on December 9, 2014; the two chains merged under the new parent company Restaurant Brands International (RBI), which began trading on December 15, 2014.[45][46][47] According to CBC News, "how the government will enforce [Moore's] conditions is unclear."[48]

2015-16: Recent years

On May 21, 2015, the company announced the closure of its US headquarters in Dublin, Ohio earlier that week. As of March 2015, the Dublin headquarters had 127 employees.[49]

In August 2016, Tim Hortons again changed presidents.[50]

In September 2016, Tim Hortons announced it would be expanding into the United Kingdom, with an unannounced number of locations to be built.[51] There were also plans as of September 2016 to open locations in the Philippines.[51]

Locations

A drive thru only Tim Hortons location in Moncton, New Brunswick

Tim Hortons was originally concentrated in Ontario and Atlantic Canada. In recent years, however, the chain has greatly expanded its presence into Quebec and western Canada.[52] Its location in Iqaluit, Nunavut, is the northernmost store as of 2010.[53]

Tim Hortons' international presence includes outlets in the United States and one that was on a military base outside Kandahar, Afghanistan,[54][55][56] although this latter outlet was principally intended for Canadian Armed Forces and allied military personnel. Two more outlets are located in military bases at Fort Knox, Kentucky,[57] and Naval Station Norfolk, Virginia.[58] TDL Group recorded $1.48 billion in sales in 2005[59] and Tim Hortons' products have become available in Ireland and Scotland at some SPAR convenience stores as of 2006[60] and Tesco supermarkets.[61] Tim Hortons' other international expansions include a small outlet at the Dublin Zoo. Tim Hortons also made a deal with the Spar convenience store chain in the UK and Ireland, resulting in Tim Hortons coffee and doughnuts being sold at small self-service counters in 50 Spar stores as of April 30, 2007.[62] It also has a partnership with Tops Markets in the United States.[63]

In March 2010, Tim Hortons announced further expansion on both sides of the Canada–US border to be completed by 2013. The plan calls for 600 new stores in Canada (primarily in Quebec and Western Canada but also including smaller communities) and 300 new stores in the US (primarily in its existing markets of Michigan, New York, and Ohio). It also for expansion into such non-standard store locations as hospitals, universities, and airports, as well as extending its co-branding initiative with US ice cream chain Cold Stone Creamery, which began in 2009, to cover 60 Canadian stores and 25–35 new and existing US stores. It will also include testing a new café/bake shop concept in at least 10 existing US locations, including "enhanced finishes, fixtures, and seating areas" as well as an expansion of menu offerings.[64][65]

In October 2010, Tim Hortons confirmed that it is planning to open three kiosks at NorthMart stores in Iqaluit, Nunavut, in November 2010, as part of a joint venture with The North West Company, the owners of NorthMart. This opening will make Tim Hortons a fully Canadian operation with stores in every province and territory; the new branch will become its northernmost. The Tim Hortons logo in these kiosks will feature Inuktitut characters.[66] According to Nick Javor, senior vice-president of corporate affairs at Tim Hortons, "You could say it's overdue. If we can be in Kandahar, why can't we be in Iqaluit?"[67] In December 2011, Tim Hortons opened its 4000th restaurant.[68] In 2012, Tim Hortons Inc. recorded its total revenues at $3.12 billion (CDN).[68] As of 2012 the company had expanded across Canada.[68] As of June 30, 2013, Tim Hortons has 4,304 restaurants, including 3,468 in Canada, 807 in the United States, 29 in the Cooperation Council for the Arab States of the Persian Gulf.[69] Tim Hortons reportedly had plans by 2013 plans to enter the large Indian market, which the company denied.[32]

United States

Tim Hortons United States Logo where it is known as Tim Hortons Cafe & Bake Shop
A Tim Hortons store at Penn Station in New York City in 2010.

Initially, the US stores were the result of natural expansion in Canada–US border areas (e.g., stores in Maine and the Buffalo, New York area where Horton played from 1972 to 1974 as a member of the Buffalo Sabres). The first United States locations were opened in Deerfield Beach, Florida and Pompano Beach, Florida in 1981, but they proved unsuccessful and were closed.[70] In 1985, the chain returned to the US with a location on Niagara Falls Boulevard in the Buffalo suburb of Amherst, New York.[71] Starting in the mid-1990s, however, the chain began expanding in the US by acquiring former locations from fast food chains. In 1996 and 1997, thirty-seven former Rax Restaurants locations in Ohio, Kentucky, and West Virginia were bought by Wendy's International Inc.; 30 of these were converted to Tim Hortons, while the others became Wendy's franchise locations. Thirty-five closed Hardee's stores in the Detroit area were also purchased with the intention of being converted.[72] By 2004, the chain had also acquired 42 Bess Eaton coffee and doughnut restaurants situated in southern New England. Several combination Wendy's/Tim Hortons units were opened in the US; both in the "traditional" markets of Maine and Buffalo, where there were well over 180 locations as of 2011,[73] and in the markets entered through acquisition.

In October 2008, Tim Hortons announced a plan to add 82 locations in Tops Markets stores in the United States.[63]

On July 13, 2009, Tim Hortons opened stores in New York City at former Dunkin' Donuts locations operated by the Riese Organization. One of the stores is located at Madison Square Garden, where Horton played as a member of the New York Rangers from 1969 to 1971.[74] In 2009, Tim Hortons opened its first store in Albany, NY, with more stores on the way. Tim Hortons continued its southward expansion in the US by opening a restaurant at Naval Station Norfolk, Norfolk, Virginia, in mid-December 2009. In November 2010, Tim Hortons announced it was closing 36 stores in the northeastern United States due to high competition with New England-based Dunkin' Donuts and Au Bon Pain. The stores, which made less than half the average company per-store sales, were concentrated heavily in the Providence, Rhode Island, and Hartford, Connecticut, areas, the former of which also has a concentration of stores from the locally-competing Honey Dew Donuts chain, itself with some 150 outlets in Rhode Island and Southeastern Massachusetts. In the announcement, the chain stated that it will concentrate its efforts on its core markets such as western Canada. In the same statement, the company announced the sale of its portion of distribution company Maidstone Bakeries to Tim Hortons' European partners. It will use the C$400 million generated by the sale for a stock buyback.[75]

In 2010, Tim Hortons opened two kiosks at Consol Energy Center (now known as PPG Paints Arena) in Pittsburgh, partly as a test to eventual expansion into Pittsburgh (their closest locations at that point were in the Wheeling, West Virginia/Steubenville, Ohio area) as well as Pittsburgh Penguins star Sidney Crosby having a longtime sponsorship with the chain as well. In addition, Horton played for the Maple Leafs American Hockey League affiliate, the Pittsburgh Hornets, earlier in his career as well as the Penguins for one season in 1971–72.[76] Aramark, which operated the kiosks, closed them in 2012, however Tim Hortons proceeded to open full-service locations in Pittsburgh and surrounding areas in July 2012. At the time of the entry into Pittsburgh, of the four NHL cities Horton played in (Buffalo, New York City, Toronto, and Pittsburgh), Pittsburgh was the only one without a Tim Hortons location, and was also where Horton met his future wife, Lori.

2011 saw Tim Hortons aggressively expanding into the Grand Rapids, Michigan region.[77] In 2012, Tim Hortons began advertising in the Youngstown, Ohio area in anticipation of an eventual expansion into the Mahoning Valley. The closest location at the time was in Calcutta, Ohio, about 50 miles south of Youngstown. The chain entered the area in July 2012 with the opening of a location in Hermitage, Pennsylvania.[78] As of 2012 the company had expanded across the US states of Connecticut, Indiana, Kentucky, Maine, Massachusetts, Michigan, New York, Ohio, Pennsylvania, Rhode Island, and West Virginia.[68] The first expansion into Indiana was the opening of a location in Richmond, Indiana's southwest side. On January 7, 2014, Tim Hortons opened a kiosk in the Gila River Arena (where the Arizona Coyotes of the NHL play) in Glendale, Arizona.[79] On March 5, 2014, The Arizona Coyotes announced that as of March 10, 2014, the Tim Hortons stand would be open to the public from 9:00 to 15:00, seven days a week.[80] This location is the first Tim Hortons in Arizona.[81] A flagship Tim Hortons location within the Buffalo area opened across from the First Niagara Center at the HarborCenter complex on October 29, 2014.[82] The location honours the life and legacy of Tim Horton. The chain also is planning to open 40 outlets in the St. Louis, Missouri area starting in 2015, first selling coffee and hot chocolate at Scottrade Center during St. Louis Blues games, followed by the opening of a full-service store in the suburb of Maplewood and an "express" location inside a Frontenac bank building.

Middle East

Through franchisee partnership with Dubai-based Apparel Group, Tim Hortons entered the United Arab Emirates in 2011 with store openings in Abu Dhabi, Dubai, and Fujairah, with the first location opening in September 2011.[83] As of December 2013 it has 19 stores in the United Arab Emirates, two in Oman and two in Saudi Arabia. They plan to open up to 120 stores over the next five years in the Persian Gulf area, with a focus on Qatar, Bahrain, Kuwait, Oman, and the United Arab Emirates.[84][85]

Store growth

Tim Hortons milestones[86]
Store # Location Date Note
1 Hamilton, Ontario May 1964
100 Thunder Bay, Ontario December 1978
200 Hamilton, Ontario December 1984
300 Calgary, Alberta February 1987
400 Halifax, Nova Scotia February 1989
500 Aylmer, Quebec January 1991
700 Moncton, New Brunswick October 1993
1000 Ancaster, Ontario August 1995
1500 Pickerington, Ohio March 1997 also Wendy's 5000th store
100 in US Columbus, Ohio July 31, 1998
2000 Toronto, Ontario December 2000
2500 Cayuga, Ontario September 2003
3000 Orchard Park, New York December 14, 2006 [8]
500 in US Detroit, Michigan 2008
4 in Kuwait Kuwait 2013
1 in Oman Oman 2012
2 in Saudi Arabia Saudi Arabia 2015
1 in Qatar Doha, Qatar May 2013

Partnerships

With Cold Stone Creamery

Joint location on New York's 42nd Street.

The parent company of Cold Stone Creamery, Kahala, announced in February 2009 that it had reached an agreement with Tim Hortons to open up to 100 co-branded stores in the United States after successfully testing two locations in Rhode Island.[87] The most notable co-branded store opened in August 2009 when Tim Hortons moved into three Cold Stone Creamery locations in New York City, including its flagship Times Square location.

In June 2009, Cold Stone Creamery started testing the Canadian market by opening its six co-branded locations with Tim Hortons in Ontario,[88] and began expanding its test markets in Canada, including Calgary, Alberta, Nova Scotia, Ontario, New Brunswick, and British Columbia, and in the summer of 2010, Cold Stone Creamery moved into six Tim Hortons locations in Quebec and one in Summerside, PEI. However, in February 2014, Tim Hortons chief executive Marc Caira announced that they will be pulling Cold Stone Creamery from all its Canadian restaurants, although Tim Hortons would maintain its locations in the United States.[89]

Military partnerships

Soldiers at the Tim Hortons in Kandahar, Afghanistan in 2007.

Tim Hortons has outlets located on at least seven Canadian Forces Bases.[90] TDL Group announced in March 2006, in response to a request by Chief of the Defence Staff, General Rick Hillier, its commitment to open a franchised location at the Canadian Forces operations base in Kandahar, Afghanistan. The new Kandahar location opened on July 1, 2006, in a 40-foot (12 m) trailer on the military base.[91] The 41 staff members of the Kandahar outlet have been drawn from the Canadian Forces Personnel Support Agency who received training on such matters as how to handle a potential nuclear or biological attack before working at the military base.[92] The Canadian Federal government subsidized the operation of the Kandahar outlet in the order of CAD$4–5 million per year.[93] The Kandahar Tim Hortons closed on November 29, 2011, after serving four million cups of coffee and three million doughnuts over five years.[94]

The first Tim Hortons outlet at a US military base was opened in 2009 at Fort Knox.[95] The following year, a second Tim Hortons outlet was opened at Naval Station Norfolk.[96] As of November 2011, Tim Hortons has five outlets open on four US military bases. Besides the first two, they are also at Naval Air Station Oceana, and two locations at the Aberdeen Proving Ground.[97]

Menu

Tim Hortons' first stores offered only two products – coffee and doughnuts.[8] Aside from its coffee, tea, hot chocolate, and doughnuts, the menu now contains a number of other baked goods, such as bagels – of which the brand sells one out of every two in the Canadian food service industry.[98] Nutritional information on most menu items is made available by the company in a two-page brochure and online. The brochure does not list ingredient information.[99]

Coffee and beverages

Tim Hortons coffee and smoothie in 2011.

Tim Hortons' first stores offered only two products – coffee and doughnuts.[8] Aside from its coffee, tea, hot chocolate,[98] Hortons now serves other types of drinks as well, and in the mid-1990s the chain moved into specialty and premium items such as flavored cappuccino, iced cappuccino, and iced coffee.[100]

Originally featuring Pepsi products via fountain machines, the retailer changed in the mid-1990s to Coca-Cola products. For a time they offered bottled and canned Coca-Cola products, but switched back to bottled and canned Pepsi products in 2007. PepsiCo replaced the Coca-Cola products on United States restaurants in 2011, disappointing similar longtime PepsiCo rival Dunkin' Donuts. Dunkin' Donuts moved to Coca-Cola products only for United States restaurants in April 2012 because of this.

Despite an expansion in their food offerings around 2009, the brand remained heavily dependent on coffee sales.[101] In 2009, it was reported that 60% of their sales occur in the morning, and of that more than 50% is coffee.[101] The coffee served is a blend of 100% arabica beans. The "original blend" is a medium, balanced roast that is the most popular served coffee in Canada.[102] The chain has an "always fresh" policy where coffee is served within 20 minutes of brewing.[52]

In November 2011, the company announced that they would be adding espresso machines in 1,000 of their locations, later that month.[103] Lattes were added to Ontario stores on November 14, 2011. In February 2012, they offered a new beverage, White Hot Chocolate, in select branches. On April 16, 2012, the brand launched frozen lemonade, in two flavours: original and raspberry.[104] In May 2014, they first offered frozen green tea. On August 15, 2014, the company added a dark roast coffee blend as an alternative.[105] In the summer of 2015, they introduced a frozen drink called Creamy Chocolate Chill which was essentially a chocolate milkshake topped with chocolate whipped cream and drizzled with chocolate syrup. In addition to the Creamy Chocolate Chill, they also launched a Maple Chill, a maple milkshake topped with regular whipped cream and sprinkled with maple flakes.

Food items

Tim Hortons baked goods in 2015.

The menu contains a number of other baked goods, such as doughnut holes (branded as Timbits), muffins, croissants, tea biscuits, cookies, rolls, danishes, and bagels.[98] Take-home cakes are offered in some locations. The dutchie is a Canadian doughnut popularized by the Tim Hortons chain.[106]

Since the mid-1990s, the chain has moved into other areas beyond donuts and coffee, including specialty and premium items such as New York-style cheesecake, and a lunch selection that includes soups, chili, and submarine-style sandwiches. In fall 2006, the chain began rolling out a breakfast sandwich. The sandwich consists of an egg patty, processed cheese slice, either ham, bacon or sausage as the topper, and is placed on either a biscuit, English muffin or bagel.[100] In October 2007, they launched a chicken fajita wrap, which contained spiced chicken and sautéed vegetables. This was discontinued and replaced a year later with the barbecue and ranch chicken wrap snackers. In December 2007, they introduced hash browns and the "Bagel B.E.L.T.", a breakfast sandwich of bacon, egg, lettuce and tomato on a bagel. In February 2009, they announced co-branding with American ice cream parlor Cold Stone Creamery. The deal called for each chain to convert 50 stores into dual-operation franchises, for a total of 100 stores. The idea was successfully tested at two stores in Rhode Island.[107][108][109][110] Despite this expansion, the brand remained heavily dependent on coffee sales.[101] In February 2014, Tim Hortons announced that the dutchie timbit was discontinued due to low popularity.[111]

Baking methods and lawsuit

Coupled with the expansion and expanded menu came the outsourcing of baked goods. Doughnuts, which used to be made at night to be ready for the morning rush, are now parbaked – partly cooked and then frozen and delivered to every restaurant in Canada from Brantford, Ontario.[52] Each restaurant bakes and finishes the product throughout the day. As of April 2007, many of the various muffin batters are being revoked, as frozen, pre-made and pre-wrapped muffins are being introduced to all bakers at Tim Horton locations.[112]

Tim Hortons switch to a parbaking system has disappointed some die-hard customers, who note that this contradicts the chain's "always fresh" slogan. David Swick reported in the Halifax Daily News on September 19, 2003 Tim Hortons outlets in Atlantic Canada would no longer serve fresh donuts, but rather donuts that had been remotely factory-fried and then frozen and shipped.[113] In 2008, two franchisees initiated a class-action lawsuit against the parent company for the switch to parbaking, "claiming breach of contract, breach of duty of fair dealing, negligent misrepresentation, and unjust enrichment".[114] The lawsuit cited that parbaking tripled the franchisee's fixed cost to produce a doughnut (from 6 cents per doughnut to 18 cents),[115] required the purchase of new freezers and microwaves, and reduced profitability for the franchises while increasing profits for the parent company.[114] Franchise owners are required to purchase food products from the Brantford-based parbaking company owned by IAWS Group PLC,[115] and had originally been told the price of each doughnut would be 11 or 12 cents (and each Timbit 4.6 cents).[116] The case was dismissed in February 2012.[117]

A 2009 New York Times article contrasted the baked from scratch at stores approach of Krispy Kreme and some Dunkin' Donuts locations compared to the "flash frozen" and shipped Tim Hortons method. The NY Times article also noted an apparent scarcity of doughnut specialties such as the dutchie at newly opened Tim Hortons stores in New York City. Noting that "American visitors tend to flock to the sweets", including the "raisin-studded Dutchie", the Times found redemption among Canadians that the brand is once again a Canada-based company while contrasting the way politicians in the US "woo" soccer mom while in Canada they "go after Tim Hortons voters".[118]

Marketing

Tim Hortons advertising on the field at BC Place during the 2005 Grey Cup game

Tim Hortons' advertising slogans have included "You've Always Got Time for Tim Hortons" and starting in the mid-2000s, "Always Fresh. Always Tim Hortons." While both of these slogans are still used, Tim Hortons began using an alternative slogan, "It's Time for Tims" in November 2011.

Canadian Business magazine has named Tim Hortons as the best-managed brand in Canada in 2004 and 2005.[119][120][121][122]

Since 2005, Tim Hortons has been the title sponsor of the Brier, the annual Canadian men's curling championships, along with the Canadian Ringette Championships.[123] Resultant sponsored events include the Tim Hortons Brier Shot of the Week Award, 2013 Tim Hortons Brier, 2016 Tim Hortons Brier, and the 2014 Tim Hortons Brier among other years.

Shortly before December 2007, they discontinued their gift certificates, and replaced them with the Quickpay Tim Card,[124] with the Christmas slogan "Because it's hard to wrap a double double" (coffee with two sugars and two cream). Many locations still accept gift certificates, however.

In September 2006, Tim Hortons courted controversy by mandating that employees were not to wear red as part of the Red Fridays campaign by families of the military to show support for Canadian troops. Within a few hours, Tim Hortons partially reversed its position and has allowed staff in Ontario stores to wear red ribbons or pins to show support for the wear red on Fridays campaign.[125]

In June 2009, Tim Hortons USA created a Twitter and Facebook page to drive online traffic.[126][127] After Tim Hortons had agreed to provide 250 cups of free coffee in 2009 for a "Marriage and Family Day" hosted by the National Organization for Marriage, the company removed its sponsorship after it was revealed that the NOM was an organization that campaigns against gay marriage.[128] The company stated the sponsorship was a violation of the company's policy not to sponsor events "representing religious groups, political affiliates or lobby groups."[128][129][130]

On July 12, 2013, it was announced that Tim Hortons had acquired the naming rights to the new stadium being built in Hamilton, Ontario. The new stadium took on the name of Tim Hortons Field. It became the home stadium of the Hamilton Tiger-Cats in 2014.[131] The corporate-sponsored statdium name was not used during the 2015 Pan American Games, when the stadium hosted soccer matches.

In June 2015, Tim Hortons pulled a four-week advertising campaign by energy company Enbridge from its in-store "Tims TV" service after three weeks following a petition by the advocacy group, SumOfUs. Even though the ads were part of a general "Life Takes Energy" campaign introduced by Enbridge the previous year, the group argued that Tim Hortons' airing of the ads implied an endorsement of controversial projects under development by Enbridge, such as the Northern Gateway pipeline, going on to say that "Enbridge's ad campaign uses attractive actors, cute kids and high production values to hide the real truth — its tar sands project will put ecosystems, salmon and wildlife in danger, create virtually no local jobs, and accelerate climate change." The decision to pull the ads, however, resulted in a boycott of Tim Hortons led by Wildrose Party leader Brian Jean, who felt that the decision was an attack on Alberta's oil industry, as Enbridge is one of the province's top-employing companies.[132][133][134][135]

Roll Up the Rim to Win campaign

A Roll Up the Rim to Win cup in 2007.

Each February, Tim Hortons holds a marketing campaign called Roll Up the Rim to Win. As of 2007, over 31 million prizes were distributed each year,[136] including vehicles, televisions, and store products. Customers determine if they have won prizes by unrolling the rim on their paper cups when they have finished their drink, revealing the result underneath. Prizes are not distributed randomly country-wide; each of the company's distribution regions has distinct prize-winning odds.[137] The Roll Up the Rim campaign was first held in 1986 when the biggest prize was a snackbox of Timbits.[138] In 2008, over 88% of major prizes were redeemed.[139]

The contest is popular enough that Paul Kind has invented the Rimroller (as seen on Dragons' Den), a device for rolling up the rim mechanically.[140] In March 2006, two families were fighting over the Toyota RAV4 SUV prize of C$32,000 value when their daughters found a winning "roll up the rim" coffee cup in a garbage bin of an elementary school in Saint-Jérôme, north of Montreal. The younger girl had found a cup in the garbage bin and could not roll up the rim, so requested the help of an older girl. Once the winning cup was revealed, the older girl's family stated that they deserved the prize. Tim Hortons originally stated that they would not intervene in the dispute. A further complication arose when Quebec lawyer Claude Archambault requested a DNA test be done on the cup. He claimed that his unnamed client had thrown out the cup and was the rightful recipient of the prize.[141] On April 19, 2006, Tim Hortons announced that they had decided to award the prize to the younger girl who had initially found the cup.[142]

Canadian cultural fixture

Parade float featuring the logo for Timbits, a Tim Hortons product, on the hockey raccoon at the 2009 Santa Claus Parade in Toronto.

Tim Hortons is popularly known as "Timmy's" or even "Timmies".[143] The ubiquity of Tim Hortons, through the wide expansion of its outlets, makes it a prominent feature of Canadian life; Canadians eat more doughnuts per capita and have more doughnut outlets per capita than any other nation.[144][145] Tim Hortons' prevalence in the coffee and doughnut market has led to its branding as a Canadian cultural icon. The media routinely refer to its iconic status, despite this being a relatively recent development; there were only a few outlets before the chain's expansion in the late 1990s and 2000s.[120][121][146][147][148][149] A series of Tim's television commercials promotes this idea by showing vignettes of Canadians abroad and their homesickness for Tim Hortons. Noted Canadian author Pierre Berton once wrote: "In so many ways the story of Tim Hortons is the essential Canadian story. It is a story of success and tragedy, of big dreams and small towns, of old-fashioned values and tough-fisted business, of hard work and of hockey."[120]

Some commentators have bemoaned the rise of Tim Hortons as a national symbol. Rudyard Griffiths, director of The Dominion Institute, wrote in the Toronto Star in July 2006 that the ascension of the chain to the status of cultural icon was a "worrying sign" for Canadian nationalism, adding, "Surely Canada can come up with a better moniker than the Timbit Nation."[150]

The recognition of Tim Hortons as a Canadian icon has permeated into American culture as the result of product placement efforts in conjunction with a marketing agency.[151] In the American situation comedy How I Met Your Mother, while standing in a Tim Hortons "just around the corner from the Hockey Hall of Fame", Robin, played by Canadian actress Cobie Smulders, called the location the "most Canadian place in the universe". The chain has since embraced that comment as an unofficial slogan and has used it in promotional advertisements to emphasize their fixture in modern Canadian culture.

The chain has also been featured in the TV series Homeland as a result of the aforementioned product placement campaign.[151]

Another TV show that has Tim Hortons products making an appearance is The Last Ship, having a product placement deal.

Community involvement

A Timbits hockey player from Niagara Falls in 2006.

Tim Hortons sponsor community outreach programs including Free Skating, Free Swimming, Earn-a-Bike Program, Remembrance Day, Food Drives, the Smile Cookie program, as well as a community clean-up project.[152]

The store promotes itself through the "Tim Horton Children's Foundation." Founded by Ron Joyce, the Foundation sponsors thousands of underprivileged children from Canada and the United States to go to one of six high-class summer camps located in Parry Sound, ON; Tatamagouche, NS; Kananaskis, AB; Quyon, QC; Campbellsville, KY; St. George, ON and most recently, Whiteshell, MB.[153] [154]

The foundation's highest-profile fundraiser is Camp Day, which is held annually on the Wednesday of the first full week in June. All proceeds from coffee sales at most Tim Hortons locations, as well as proceeds from related activities held that day, are donated to the foundation. Small stores located in Esso Service Stations do not donate coffee proceeds on Camp Day.[155]

Joyce's work with the Tim Horton Children's Foundation earned him the Gary Wright Humanitarian Award in 1991, presented periodically in recognition of contributions to the betterment of community life throughout Canada.[156] In recognition primarily for his work with the Foundation, he received an appointment to the Order of Canada, with the official presentation taking place on October 21, 1992, in Ottawa.[156]

See also

References

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