Canadian icon misses the Chinese coffee rush
During her first trade mission to China in 2014, the premier of Canada’s Ontario province bemoaned the absence of Tim Hortons in the country.
“Clearly, we need a Tim Hortons franchise,” Kathleen Wynne was quoted as telling university students, some of whom had attended Canadian schools.
For those who are unfamiliar with the name, “Timmie’s”, as the company is affectionately called, is a national institution in Canada.
From a single Ontario location 53 years ago, the coffee-and-doughnut chain has grown to become an industry leader with more than 4,600 stores in 10 countries. Its most popular offering is the “Double Double”, a coffee with two servings of sugar and cream.
In 2008, the chain announced its intention to enter the lucrative Chinese market. Nine years on, the company is still in the planning stages as far as China is concerned.
In 2014, US fast-food giant Burger King acquired Tim Hortons and formed Restaurants Brands International, the world’s third-largest operator of quick-service restaurants, which is controlled by 3G Capital of Brazil.
At the time, it was forecast that because Burger King was already operating in China, it would be easier for Tim Hortons to open outlets too. While the company has expanded to the Philippines and the United Kingdom since then, it is keeping us guessing about its plans for China.
I asked both Tim Hortons and its parent company multiple times about their China strategy, but they did not respond.
So I turned to Wynne’s office, which quickly responded, although that did not resolve the mystery.
“Unfortunately the Premier’s Office has nothing to add to your story as this is a corporate decision by Tim Hortons,” an aide said in an email to China Daily.
As the company dithers, other players are racing ahead, with Starbucks in pole position.
Last year, the US behemoth announced plans to double the number of stores in China to 5,000 by 2021, opening 500 stores every year.
That makes sense because China is the fastest-growing coffee market in the world, and specialty stores are cropping up in cities, small and big.
“Total sales revenue for chained specialist coffee shops in China was 18.5 billion yuan ($2.7 billion) last year, and is estimated to reach 32.9 billion in 2021,” market research provider Euromonitor International said last week.
Canadian food service industry consultant Geoff Wilson said several conditions have to be met before a company enters a foreign market.
“Typically, new market entries need to be executed correctly from the start. Second chances generally don’t occur,” he said.
Yet, he believes that given China’s population and its economic growth, the country is a highly desirable market.
“China may be in the future for Tim Hortons,” Wilson added.
May be, but don’t expect any latecomer advantage in a market that is getting more crowded by the day. Contact the writer at abdul@chinadaily.com.cn