The Upsides of Competition
Kevin West will tell you he’s been working in the coffee industry since he was 10 years old, when he would spend free time at a coffee roasting plant with his father, watching, learning, and tasting. Now, as director of coffee operations for Tim Hortons, West tastes more than 300 cups a day to ensure the concept serves consistently high-quality brews. Here, he discusses the increasingly competitive nature of the coffee game—and how spikes in coffee bean prices will affect all its players.
Why have big “coffee wars” developed between quick-serve chains recently?
What we’re seeing as a market trend in the past few years is a shift from in-home consumption to out-of-home consumption. Because of that, you’re seeing a lot of coffee shops and cafés—both big-branded organizations like Tim Hortons, as well as small mom-and-pop shops—where it really becomes about the experience and convenience. We all have busy lifestyles, and good-to-go coffee is something that I think you can count on every day in today’s market place.
Who does Tim Hortons consider its biggest competitors right now?
In Canada, Tim Hortons is the No. 1 market placer. We have seven out of 10 cups of coffee in the marketplace. Our competition at times is really ourselves. We’ve got to be able to maintain that consumer promise, deliver on execution, and offer quality value. Certainly you’re seeing other players coming to the Canadian market, and we have to defend against that. The U.S. is a completely different marketplace where it’s very regionalized. You have different consumer preferences, and I would say that anybody that sells coffee is really a competitor in the U.S. marketplace.
What does Tim Hortons do that’s different from other coffee quick serves?
In the Canadian marketplace, we’re looking to enhance that customer experience all the time. We’ve got the digital menuboards, we’ve got a lot of great regional marketing, and that community work is allowing us to keep our Canadian roots. And, of course, it really is about the coffee that our customers can count on.
In the U.S. marketplace, we’re looking to evolve the business and adapt a little more. We just opened up a few concept stores in the U.S. that have a broader offering of products the consumer is looking for. I like the fact that our business is very diverse. We’ve got coffee, we’ve got baked goods, and we’ve got a lunch program.
Tim Hortons has to compete with other quick serves for coffee beans as well, correct?
We’re seeing a very tight supply of high-quality coffees. When you look at what we’re purchasing within our blend, the premium coffee or the specialty coffee that we have is what you call a strictly hard bean coffee; it’s the highest altitude that you can buy in any region. Although we offer a great price value, we are competing against the likes of Starbucks for this style of coffee, so it’s highly competitive in the marketplace, particularly now that we’ve got a shortage or supply issue in high-quality coffees.
How does Tim Hortons stay competitive on that front?
It’s really about relationships. We’re not an opportunistic buyer; we like to build relationships with vendors that are really an extension of our business, down to the farmer and back up. What we like to call it is linkages along the supply chain.
Why are wholesale coffee prices going up so much?
There’s no question about it—we’ve had a supply shortage in high-quality coffees, and that’s played into the price. But we’re hopeful that that’s just a hiccup and that, now that we have the high prices and it’s very profitable for the producer, we can get more supply back into the marketplace into the short term and we can get back to normal business operations.
How will that affect coffee prices at Tim Hortons?
We’re a quality value company. We’ve been known in the past to hold price internally so we don’t have to raise our menu price to consumers. We’ve got a great relationship with our storeowners through our national advisory group. Between our storeowners and our national team, we make the decision collectively how we’re going to deal with the price.
Food & Beverage
Move Over 4-Leggers, 2-Leggers Coming In!
Just ran across some surprising breakfast info and thought it was worth sharing, then watching where it goes. Although McDonald’s has offered its Southern Style Chicken Biscuit on the breakfast menu for several years now, and of course, Chick-fil-A menus chicken at breakfast, it came as a surprise to this writer that both chicken and turkey have gained significant ground on the breakfast menu. It seemed worthy of further investigation.
It turns out that both turkey and chicken have been getting more popular as a component of the morning meal. In a report published earlier this year, Technomic found that 24% of consumers surveyed said they’ve been eating turkey at breakfast more often than they had two years before, while 11% had been eating more chicken.
I dug further. Technomic also found that 70% of those saying their poultry consumption had risen mentioned a desire to eat more healthfully was the motivator behind their choices.
Okay, so chicken or turkey in the morning. But where were these people getting their wake-up proteins? Were they all firing up their broilers in the morning? Seemed unlikely.
So were they were going to McDonald’s or Chick-fil-A? Could be, but I discovered there are many operators offering chicken or turkey items in the a.m., I just hadn’t had my radar tuned in right.
Some of the options hew closely to the classics, with bacon or sausage made from chicken or turkey:
- Energy Breakfast Sandwich (Energy Kitchen) uses five egg whites with low-fat American cheese and turkey bacon on a honey whole-wheat English muffin.
- Power Panini Thin with Chicken Apple Sausage (Corner Bakery) is made with scrambled eggs or egg whites, chicken apple sausage, and Parmesan and Cheddar cheeses on thinly sliced whole-grain harvest toast.
- Santa Fe Egg Wrap (Einstein Bros Bagels) includes eggs, turkey sausage with ancho lime salsa, jalapeño schmear and pepper jack cheese.
Others use the more familiar forms of the poultry:
- Power Wrap (First Watch) is made with fluffy egg whites, turkey, spinach, house-roasted crimini mushrooms and Swiss in a sun-dried tomato basil tortilla.
- 2 Egg & Cheddar Sandwich with Roasted Turkey (Au Bon Pain) has a self-explanatory name and is served on a choice of breads.
- Breakfast Burrito with Chicken (Qdoba) is a flour or whole-wheat tortilla filled with grilled chicken, eggs, potatoes, choice of sauces and salsas, and optional shredded cheese or sour cream.
Did you note something in common in all those descriptions? Each one of them includes eggs!
Now I know what you’re thinking: this is a blog for the American Egg Board, so of course those items all include eggs. But foodservice operators are pretty savvy about the American consumer and they don’t include eggs just for fun. Eggs are a tasty, nutrient dense protein and just happen to be delicious.
Oh, by the way, are there eggs on the breakfast sandwiches you normally order? Uh huh. I thought so.
For more, visit www.AEB.org