More Like CBC: Tim Hortons and the Road Ahead

(A parody inspired by a tortured analogy)

From a presentation by Paul House, Chairman, CEO and President, the TDL Group Corp. to the Standing Committee on Snacks and Beverages
Ottawa, Nov. 28, 2007

Mr. Chair, Members of the Committee.

Thank you for inviting us back to talk with you about the mandate of Tim Hortons Canada Ltd. It’s been almost 15 years since the Royal Commission on Donuts examined the Baking Act and the Tim Hortons mandate, and much has changed. It’s time for a new contract with the diner.

When speaking with Globe & Mail restaurant critic Joanne Kates last week, I used a simple analogy to outline my vision for reshaping Tim Hortons into a restaurant chain that truly reflects Canadians to themselves. It seems to have resonated with people, so I’d like to repeat it here:

Simply put, Tim Hortons must be more like the Canadian Broadcasting Corporation and less like Showcase.

If Tim Hortons is to be a nationwide chain with coffee and donuts paid for by consumers, then it has got to make an eating offer that is the broadest possible offer. It’s not a service that is built for individual consumers or the “muffin elite”. It must be all food and all drink to all people.

For decades, Tim Hortons has targeted specific market segments by placing a limited number of stores in a limited number of locations. Those numbers have grown, but there are still many communities where citizens do not have free, unfettered access to a full slate of coffee and donuts.

Consumers today are faced with myriad choices in this era of food convergence, and our diet is dominated by the predominance of American fast food and snack franchises.

Our competitors, such as Dunkin’ Donuts and Krispy Kreme, cash in on appetite for popular American fare, selling U.S. pastries almost exclusively in prime locations. True Canadian snacks, like the Canadian Maple, the persian and proud butter tart are increasingly relegated to end-of-counter. Simply put, the private sector refuses to give Canadian cuisine the shelf space it so richly deserves.

This is where I see the CBC as being a model worth emulating in the coffee and donut business.

First, we need to rethink our revenue model. At the moment, monies are generated by selling individual food and drink products to individual consumers, on a user-pay basis. Those who cannot afford to buy donuts, muffins or danishes are left underserviced, as are those outside major metropolitan areas like Hamilton.

Access to Canadian food culture cannot be left to the vagaries of the market. Instead of relying on “sales”, Tim Hortons is therefore asking for a Parliamentary appropriation of $1 billion in stable, multi-year funding.

This works out to only $30 per capita – considerably less than any other G8 country except the U.S. spends on public pastries.

In return for this reasonable levy, each Canadian will have access to a full slate of nationally-available foods. Each man, woman and child – from coast to coast to coast - will receive a yearly allotment of five donuts (assorted), 3 black coffees, 1 coffee with triple cream triple sugar, 27 bran muffins and a small Iced Capp.

I want to emphasize that during prime consuming periods, our menu will be exclusively Canadian. Yes, there is money to be made by simply repackaging American foods, offering only the popular donuts that “taste good” and that consumers “want to eat.”

But we have a responsibility to offer the donuts that the other chains won’t provide or find unprofitable: amateur baking, regional cakes, children’s crackers and the best imported scones from Britain and around the world.

We must also fulfill our mandate to connect Canadians, and offer them snacks on a variety of platforms, so Canadians can access coffee where and when they want it. We are pushing heavily into Snack 2.0 technologies - rate this coffee, send it to a friend, recommend an employee of the month, and so on. Very soon, our stores will begin featuring User-Generated Donuts. Watch for myTimsVancouver to break this new ground in the coming months.

Fewer pastries baked in Toronto. Teas that reflect different cultures. DonutHD. Less icing, more toasted coconut. With a new mandate and increased federal funding, the new Tim Hortons will be positioned to take the donut into the 21st century.

Thank you.

Posted by: Paul Gorbould | 12-04-2007 | 12:12 AM
Posted in: CBC