Why Tim Hortons is selling nitro lattes and creme brulee donuts

On Thursday, Tim Hortons opened its new “innovation café” in the heart of Toronto’s business district, just below its head office at 130 King West.

The store brings together the three pillars of the Tim Hortons brand, says chief marketing officer Axel Schwan. “The brand has been all about coffee, all about donuts and, of course, all about hockey,” he said. “So we wanted to make sure we create a space where we really bring these passions to life in a way that we haven’t done before.”

While there are design nods to the brand’s hockey roots, and customers can still get a traditional coffee and donut, in almost every other way this store seems to be about imagining entirely new opportunities for the business.

The store’s wide sweep of new options are a far cry from the unfussy Double Double and honey dip donut basics that have been the bedrock of the brand for decades. Aside from typical brewed coffee, the store is testing six different coffee styles—from pour over, to espressos and nitro lattes (Schwan’s favourite).

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There are also deluxe donut creations like crème brulee, dulce de leche, Froot Loops, and a PB&J option, while the hot food menu includes Montreal smoked meat on rye, a turkey avocado club and Italian muffaletta, and premium soups like lobster bisque and Thai green curry chicken.

It may only be one store, but it feels like more than a small experiment or a stunt aimed at the Bay Street crowd. It’s more like Tim Hortons, which has slipped in brand rankings in recent years, attempting to figure out where it fits into a changing Canadian landscape populated by consumers who’ve grown up on coffee culture and decadent donuts.

The Message spoke with Schwan about the new cafe.

Why do this?

Schwan’s quick response is the “urban demographic.” The Tim Hortons marketing approach is study, plan and execute, he says. “Studying is super, super important,” he notes, and this café is a better way to study the urban consumer. “We love research, we embrace research. Because what it basically means is it’s embracing the opinion of our guests.”

What do urban consumers want?

“We talked to our guests in the downtown areas and we heard that there is interest in different brewing methods [and] interest in nitro and cold brew. There’s interest in playful experimental products, and there’s also an appetite for donuts that maybe look a little bit more playful. And so we thought, ‘Wow, that’s great feedback. Awesome feedback.’ So let’s create products that live up to the expectations of urban guests.”

How do these innovations matter to non-urban consumers?

“It’s also a testing ground to learn fast, and then potentially roll out ideas that work here,” he said. “We will learn very fast what things we can also bring to suburban or rural Canada. We feel that many of the things that we try here will actually also resonate in other parts of the country, not only in urban areas.”

Is this a prelude to new kinds of Tim Hortons cafes across the country?

“We don’t know yet, to be honest,” he said. Some of the design elements will be rolled out to other stores, and some of the products could also show up in other markets. “We feel that many of these things that we try here will also resonate very well in other parts of the country, not only in in urban areas,” he said.

How does this fit into larger brand strategy?

Even if the new store is about more complicated coffee and fancy donuts, it is still a reflection of Tim Hortons’ values said Schwan. “Our values are basically a reflection of Canadian values,” he said. “We embrace being warm and welcoming, being inclusive, being generous, having a community spirit.”

Schwan pointed out several times that it’s important for Tim Hortons to maintain its traditional products while also exploring new options. “Trying to strike the right balance between offering products that Canadians love and offering products that we hope Canadians will fall in love with,” he said. “We are offering everything that guests would like to have. And it’s really more about adding to the experience. It is not about a crazy revolution.”


David Brown