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Coffee n’ Doughnuts: A Love Affair (Cont.)

While great tasting coffee has always been a priority at Tim Hortons, Canada’s largest coffee and fresh baked goods chain, it’s not a large part of their current competitive positioning, mostly due to the fact that the company is 38 years old and they have developed a very loyal group of customers who are well aware they can get a great cup of coffee at Hortons. “The chain is built on coffee,” said Greg Skinner, corporate communications representative at Tim Hortons. “It’s been kind of the cornerstone of the chain. Our customers are very loyal, they come in two, three times a day.”

So when it comes to keeping up with other quick serve chains, Tim Hortons focuses on expanding their lunch menu. “We have other baked goods, sandwich, bagels, soups,” Skinner said. “So we’re just not coffee, doughnuts. We’ve expanded the menu in the last 15 years to expand into the lunch market. So really we’ve become more, almost like a restaurant.”

Tim Hortons has recently expanded into the U.S. market, though, and this is where positioning their coffee becomes a little more important. They want to make Americans aware of the great coffee that their Canadian counterparts have been drinking for years. The U.S. commercials introduce the chain and focus on the coffee and talk about how a fresh pot of coffee is brewed every 20 minutes.

In addition to opening up four new locations in Rochester, New York in September, Tim Hortons also opened a coffee roasting plant in Henrrietta, New York which will supply coffee to all U.S. Tim Hortons stores. Other U.S. locations are mainly in the Buffalo, NY; Columbus, Ohio; and Detroit, Michigan areas.

“Our expertise in coffee over the 38 years we have operated can now be translated into the actual roasting process with this state-of-the-art facility,” said Paul House, president & c.o.o. of the coffee and baked goods chain.

The roasters at the new facility will also be creating a blend for Wendy’s International, Inc., which purchased Tim Hortons in 1995. “It was a good acquisition, a good business decision,” Skinner said of the roasting plant.

The Tim Hortons special blend of coffee has been closely guarded from the beginnings of the chain, and, according to Skinner, is subject to stringent quality assurance measures by a team of coffee experts located at the Tim Hortons head office in Oakville, Ontario.

“We do extensive testing and cupping of our coffee to ensure the highest quality standards are met, and now our people can extend that quality right into the roasting process here in Rochester,” said House. “We start with the best possible Arabica beans from various countries of the world to create our special blend, and can follow those beans right through the roasting and packaging processes.”

The premium blend coffee, made from 100% Arabica beans, is available in decaf and regular. Customers can also purchase cans of coffee to make the brew at home.

“We have an ‘always fresh promise,’” explained Skinner. “If we brew a pot of coffee and it’s not sold in 20 minutes, we throw it out. So you’re always getting a fresh cup. The blend was created back in the 1960s and the flavor profile is very popular. It’s kind of become a Canadian icon.”

Skinner continued, “The coffee has always been there so in the last ten years, we’ve expanded the menu through baked goods sandwiches and soups. The coffee hasn’t changed and customers always like it, we’ve just added the other food products to the menu. We’ve never changed the coffee, but now we’ve branched off from that. Like in 1996 we introduced bagels and now we sell one out of every two bagels in the country.”

Perhaps the sleeping giant in the doughnut/coffee wars will prove to be Dunkin Donuts, USA, a company that is perhaps just as well known for its coffee as it is for its doughnuts. The company, based in Randolph, Massachusetts, has 5,000 combined locations in the U.S. and 35 countries around the world, and when Bill Rosenberg (who passed away recently) founded Dunkin’ Donuts in 1950, he believed that he could provide a better tasting, richer cup of coffee that people would pay 10 cents a cup for, instead of 5 cents, which was the standard price during that time. Since then, Dunkin’ Donuts has continued their philosophy of providing only the best coffee to customers. According to Dunkin’ Donuts, the chain has since become the largest retailer of coffee, serving over 2 million cups of coffee per day. Recent TV spots that have a man sipping up a small amount of spilled coffee on his desk with a straw, reinforce the image of the rabid Dunkin’ Donuts coffee drinker.

Ed Valle, director of beverages, Dunkin’ Donuts commented on the popularity of their coffee. “Since opening its doors in 1950, Dunkin’ Donuts has been known for its great coffee,” he said. “In fact, in fiscal year 2001, coffee attributed to 1/2 of Dunkin’ Donuts’ overall sales. Dunkin’ Donuts has always offered customers premium quality at a value price.”

Valle continued, “Over the past few years, we have increased our coffee drink offerings to include Dunkaccino, a creamy mocha drink, and Vanilla Chai, a creamy combination of tea, vanilla, honey and spices. Dunkin’ Donuts also offers the Coolatta, a frosty frozen beverage, as well as Iced Coffee. Dunkin’ Donuts has always offered customers a wide variety of coffee beverages to choose from.”

Doughnut shops are not at risk of becoming the coffee purists savior. They aren’t emphasizing their coffee programs out of nostalgia or an aesthetic appreciation for the stuff. Rather, they see it as an opportunity to attract new customers and win back old ones. Indeed, as doughnut shops, coffee houses and even burger chains increasingly encroach on each others menu territories, they will all use coffee to attract what customers they can, to the extent coffee can do it. Even the coffee house, however, is under no obligation to push a drink that is less popular than, say, their chai cappuccino. The recent emphasis on coffee at the continents leading doughnut shops is a golden opportunity for the coffee industry. It’s one that should be encouraged. The more consumers know about coffee, its great taste and the value that a simple and well-brewed cup of the stuff represents, the more they will seek it out wherever they can find it.

Timothy J. Castle is the president of Castle Communications, a company specializing in marketing and public relations for the coffee and tea industries. He is also the co-author (with Joan Nielsen) of The Great Coffee Book, published by Ten Speed Press, and the author of The Perfect Cup (Perseus Books). He may be reached at: (310) 479-7370 or via E-mail at: qahwah@aol.com.

Tea & Coffee - December/January 2002

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