Tim Hortons plots Chinese invasion as Asian giant’s favourite drink — tea — gives way to roasty rival

Canadian coffee chain Tim Hortons has signed up to a joint venture in China that will see it open 1,500 new outlets in the world’s second largest economy over the next 10 years, parent Restaurant Brands stated on Wednesday.

Restaurant Brands, that further owns the Burger King chain, stated the Chinese restaurants will be opened under a master franchise joint venture with private equity firm Cartesian Capital Group.

“China’s population and vibrant economy represent an excellent growth opportunity for Tim Hortons in the coming years,” President Alex Macedo stated in a statement.

Tim Hortons, that has more than 4,700 over the world, has seen sales falling over the last two years.

Tim Hortons’ move to China is clearly a natural growth of a chain searching for a new identity in new territories, says Sylvain Charlebois, professor in food distribution and policy at Halifax-based Dalhousie University.

“What was considered as the Republic’s favourite drink, tea, is slowly giving way to its roasty rival,” Charlebois wrote in a report, noting rival Starbucks has 2,800 stores in China.

“Tim Hortons’ legacy in Canada lies in convincing Canadians to make and consume coffee somewhere else than their home. However, in these past few years an increasing number of Caucasian Canadians are preparing coffee themselves; the trend for Asian Canadians is the opposite,” Charlebois said. “For marketers, this shift represents the golden goose. RBI understands that once a certain level of wealth is achieved, and disposable income increases, coffee-related behaviours will change.”

In April, Restaurant Brands stated it plans to spend $700 million to revamp the coffee chain, following a round of bad publicity over its management of outlets.

China is embracing cafes and switching from tea to coffee, prompting Starbucks Corp to assert in May that it aims to triple China revenue and double cafe figures to 6,000 by 2022.

Cartesian Capital Group is further already involved in Burger King’s Chinese franchise operation.

© Thomson Reuters 2018

With a file from Financial Post Staff

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