Tim Hortons, the Canadian coffee shop chain, has announced it will open more than 1,500 branches in China over the next decade through a master franchise joint venture with Cartesian Capital Group, while the brand’s sales and reputation struggle in its homeland.
The deal continues Tim Hortons’ parent company, Restaurant Brands International’s aggressive development outside of North America. The move also adds to Tim Hortons’ global footprint, after last year’s entry into the Philippines, Britain, Spain and Mexico.
“We have two main priorities at Tim Hortons: building and strengthening our brand in Canada and expanding our iconic Canadian brand to the rest of the world,” said Alex Macedothe, president of Tim Hortons.
He added: “We have already seen Canada’s Chinese community embrace Tim Hortons and we now have the opportunity to bring the best of our Canadian brand to China,”
China may provide a boost for the brand, as it has struggled in recent quarters amid disputes between parent Restaurant Brands International Inc. and Canadian franchisees.
Macedothe said: “China’s population and vibrant economy represent an excellent growth opportunity for Tim Hortons in the coming years.”
China’s coffee and tea consumption is expected to increase to 750,218 metric tons by 2020, from 693,748 in 2015, according to Statista. Shanghai alone has an estimated 6,500 coffee houses, with small chains, independent stores and bakeries battling for a slice of a market that research firm Mintel says could reach US$11.84 billion by 2022.
Tim Hortons competitor Starbucks, McDonald's and KFC all have a major presence in China.
Restaurant Brands, which also owns the Burger King chain, wants to boost Tim Hortons’ sales by remodelling locations and revamping the menu with more espresso and lunch offerings.