Tim Hortons looking to fend off rivals with new dark roast, expansion plans

The company that already dominates the coffee market in Canada is looking to shore up whatever space may be left with the launch of a new coffee blend.

Tim Hortons began serving a new dark roast Friday morning across its North American restaurants. It’s the first opportunity in 50 years patrons have been able to order something other than the familiar medium blend to help wash down their Tim Bits and breakfast sandwiches.

Marc Caira, Tim Hortons president and CEO, said the new coffee is in response to the changing tastes of consumers. The company cited industry studies that found about half (49 per cent) of Canadian and American (52 per cent) coffee drinkers who reported a preference for dark roast.

Caira said the company has done its own research and discovered 30 to 40 per cent of coffee drinkers are asking for a darker blend.

“Given we are the leaders, by far, we felt we had a responsibility to respond to that,” he told Yahoo Canada Finance.

The new blend is the result of months of internal research and included consumer tests in London, Ont. Columbus, Ohio and across Quebec. Borrowing the lingo of a seasoned sommelier, Cairo described the taste as “smooth and rich, with hints of citrus, cocoa and earthy tones.”

Tim Hortons has long ruled the coffee landscape in Canada. Competitors Starbucks and McDonalds have done their best to lure consumers with their own specialty coffees, but have so far failed to alter statistics that overwhelmingly favour the hometown favourite.

Tim Hortons boasts that it serves eight out of every 10 cups of coffee sold in Canada every year.

“If you take our next 15 competitors and add them all together, it doesn’t equal the market share that we have,” said Caira.

Caira, who took over the top job at Tim Hortons last May after a career as global CEO of Nestle, said he isn’t afraid of rival restaurants catching up anytime soon, but that doesn’t mean he won’t take risks in order to stand out and stay relevant with consumers.

“It’s innovation that is the differentiator,” he said.

The launch of the new blend comes as traffic at Canadian restaurants fell flat in 2013, a trend market researchers expect to continue this year.

Expansion to continue

Caira confirmed Tim Hortons will push ahead with expansion plans. The company will open 500 more outlets in Canada over the next five years, according to the Financial Post.

It’s also looking to take on as many as 150 new locations in the U.S., and enter international markets in 2015.

Cairo said the company will be pragmatic in its expansion plans.

“People say, you should go to this market or that market, but there is no such thing as a global consumer. You’ve got to really understand the market and really understand the consumer. You’ve got to adapt who you are to the local consumer,” he said.

The Financial Post earlier reported that, in the past 10 years, 50 per cent of the company’s growth has come from building restaurants.

Tim Hortons says the new dark roast coffee will be offered at the same price as its original blend. But, in an interview with Reuters, Caira said consumers can expect prices to go up sometime in 2015.