The Tim Hortons Starbucks McCafe Battle Royal Brewing

Tim Horton's venture into Specialty coffee service - 2011Had an interview with 9 CBC-1 regional stations this morning… starting at 4 AM My time – on the Wet Coast.

Talking to Sydney, Nova Scotia, Corner Brook, Newfoundland, Charlottetown, P.E.I. – Yellowknife in the North West Territories, Whitehorse in the Yukon, and 3 wonderful spots in B.C.; Kelowna, Vancouver and Victoria. Let’s not forget Calgary’ Alberta!

Which means I was up at 3:30 AM prepping after a fairly full 4 hours of sleep. Who needs a coffee? I do, I do!

So let’s get down to the skinny cappuccino on this issue shall we?

The big question in the news today is: Venerable Canadian coffee and doughnut icon to unveil espresso and specialty coffee service to double-double take-out java junkies nationwide – starting in Ontario today… So why now!

Excellent question. Here is the deal: Tim Hortons has a throttle hold on drip coffee take out in Canada… 80% of the market share. That is something like 1 billion cups of java in one year. But it is a flat market place. And they have virtually no stake in the lucrative and growing specialty coffee sector… which accounts for upwards of 3% growth annually.

Oh yea… and McDonalds is doing it as well with their 2nd or 3rd time rebooted McCafe series of gourmet coffee kiosks – often and in almost all cases located within many standard McDonalds franchise locations.
You have heard the joke about the Starbucks located within the Starbucks? Well, this is the real deal. And here is the kick: The espresso coffee service at the McCafe is not half bad. I say that because I have had it. And for some in the industry, this might be scary… but I will explain why there is nothing to worry about.

How are existing Tim Hortons customers going to respond?
Well, this is not the end of the world. Truth be told, Timmy’s customers are a loyal lot and, if I may be blunt… Put it in the menu and they will eat it or drink it. Tim’s is constantly rolling out new ideas, and although I might not be a big fan of their drip coffee (which I described as miserable in a recent Financial Post article) nor their greasy little Tim doughnut morsels (manufactured and frozen in Ontario only to be shipped nationwide only to be reanimated.) – I do enjoy the occasional sandwich or bowl of Chicken Noodle soup while I am on the road.
If they put espresso and cappuccino on the menu, someone is going to try it – particularly the up and coming next generation of coffee consumers… whomever they might be.

I guess I know coffee – so what am I expecting personally?
Tims drip coffee service is 1950’s old school miserable; poorly blended arabica coffee brewed in old school gravity brewers into glass urns where bitterness is given an open invitation to the caffeine party within minutes of the pots being put out on the hot plates!
Even McDonalds has joined us in the 21st Century with sealed air pots and professionally sourced 100% Arabica blends that taste, well, like coffee… and often good coffee at that.
How will Tim’s fair? It really depends on how motivated the Horton mother ship is. At McDonald’s McCafe kiosk, they use Franke Swiss made machines that are more reliable than gravity and unflinching in their coffee brewing precision. These machines are upwards of 30G a pop and in skilled hands are capable of producing a winning double tall skinny latte. They will not win any barista throw downs but they will satisfy the commuter in a hurry. Time will tell, readers… Time will tell.

Does Starbucks or the independents have anything to worry about?

Heck no. Starbucks customers (like their McCafe and Independent counterparts) have fierce and unbending loyalty to their product and preferred fix. Certainly, the occasional java junkie will be enticed by the rock bottom prices – but they will only return if the product is stellar.

Some in the industry feel that this will set back all the ethical progress that has been made in the area of fair trade, direct trade, and online specialty coffee auctions. Not so fast. These markets are entirely different than the New York C markets that Starbucks, McDonalds and (ultimately) Tim’s will be pulling from. In fact, the real showdown here is between McDonalds and Tim Hortons. Starbucks is still a cafe and their priority remains, coffee for the masses.

Will I try it?
I regularly head into my local Tim Hortons in the interest of research… just as I pop into Starbucks and McDonalds. Tim’s coffee needs work. And it is a simple fix. Am I curious about what their “specialty coffee” service will taste like? You bet.

Will it stand the test of time?
McDonalds has made several attempts to enter the specialty coffee market – with limited results. We are still not sure now McCafe is going to look in the long term. Tim’s, like McDonalds has nothing but time. If it does not work now, they will certainly try again in the future.

Meantime, I am brewing a pot or two of Jamaica Blue Mountain Clifton Estate coffee… from a farm that has been in active production since 1770! Here is the thing about coffee: Coffee is recession proof. It stands the test of time. It’s here to stay. Imagine all the things that have come and gone since the 1700’s.
However you brew it, coffee is here for the long haul.

Colin Newell is a Victoria area resident and coffee expert – he has been studying the delicate brew since the late 70’s and offers his wisdom freely.