Tim Hortons Introduces First New Coffee Line in 50 Years
Tim Hortons Inc. (THI), Canada’s largest coffee merchant, is adding a dark roast coffee to its menu, giving an alternative to its java blend for the first time in its 50-year history.
The Oakville, Ontario-based company is adding the new line starting today, matching the sales price of its original blend, at C$1.57 ($1.44) for a medium cup.
By keeping its traditional coffee while giving customers a taste of something new, Tim Hortons is trying to lure the Starbucks crowd while not alienating customers on price. The company is bringing in the new drink after its own research found consumers enjoy a darker roast coffee.
“We’re hoping to sell this dark blend to those people that are still going to buy our original blend but are maybe looking for a different experience,” Chief Executive Officer Marc Caira said in an interview at a promotional event in Toronto yesterday, which featured a performance by Canadian singer Jann Arden. “We also hope to attract other people that may be going to other places,” he said.
The coffee-and-doughnut chain, which competes with fast-food outlets like McDonald’s Corp., is expanding its product lines to boost sales as price increases remain a limited option. The company, which has 4,500 restaurants, already piloted the dark coffee blend, including in its Quebec stores.
The new coffee line is part of a larger shake-up of the menu at Tim Hortons. Caira said last week the chain is looking to broaden its brand and popularity with the lunch crowd. It’s added variety to its menu through the introduction of a crispy chicken sandwich, turkey sausage, hot breakfast sandwich, new hashbrowns and frozen hot chocolate.
The strategy paid off in the last quarter. The company’s stock hit a record on Aug. 6 after it posted results that beat estimates and said fiscal 2014 profit will top or be at the high end of its target range.
“If we continue to execute the plan flawlessly I continue to expect that we’re going to get progress consistent with whatever guidance we provide to the market,” Caira said yesterday.
The new dark roast will also be sold in 343 gram (12 ounce) bags for C$6.69 and 14-pack single serve coffee cups for C$9.99 at its restaurants and at grocers across Canada. In the U.S. it will be sold at Tim Hortons Cafe & Bake Shop locations in 1 pound bags for $7.99 and 14-pack single serve coffee cup formats and at grocers in 12-ounce bags for $7.99 and 12-packs of single serve coffee cups for $8.99.
At the event, reporters were invited to taste the new blend in darkened rooms, heightening the senses to better appreciate the flavor, described by Caira as offering hints of “citrus, cocao and earthy tones.” Arden, who is also a judge in the company’s national Duelling Donuts Competition, added to the ambience, performing with an acoustic guitar and backing singer.
Shares of Tim Hortons rose 0.2 percent to C$68.12 at the close in Toronto yesterday, taking their gain to 9.9 percent this year.
The chain was founded in Hamilton, Ontario, in 1964 by the late Tim Horton, who was a National Hockey League player.
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