Canadians Fret Merger With Burger King Will Change Tim Hortons

Aug 27, 2014
Originally published on August 27, 2014 7:59 am

Never heard of Tim Hortons, the Canadian coffee-and-doughnut chain that U.S. fast-food chain Burger King recently announced it was buying? In Canada, that's like asking an American, "What's Starbucks?"

The brand affectionately called Timmy's is everywhere in Canada. Tim Hortons has more than 3,000 stores across Canada as well as about 600 in the U.S.

By one estimate, sales at Tim Hortons restaurants make up more than 25 percent of all food service transactions in Canada. Eight in 10 cups of coffee in the country are bought from Tim Hortons, according to the chain. Not only that, the company was founded by a hockey player.

"It really is an iconic brand in Canada," says Eric Atkins, a business writer at Canada's Globe and Mail newspaper. "They're in every small town. They're all over the larger cities. They're loved for their coffee, which is consistent, and their doughnuts. Canadians love their doughnuts."

The hockey player who founded the chain in 1964 was the late Tim Horton, a legend who played for the Toronto Maple Leafs as well as the New York Rangers, Buffalo Sabres and Pittsburgh Penguins.

"People grab a Timmy's en route to their kids' hockey game," says Sandra Dudych of Winnipeg. She says players on her city's NHL team, the Jets, can often be found hanging out before practice at the Tim Hortons kiosk in their arena. "If you look at the food industry, a lot of the food industry wasn't homegrown in Canada. Tim Hortons was."

Tim Hortons has been owned by a U.S. company before — the fast-food chain Wendy's. Then the two split up. Burger King says this merger will bring more Tim Hortons into the U.S. Analysts say the two together might better compete in markets overseas. Putting the headquarters in Canada could also mean getting the benefit of lower corporate taxes.

At a Timmy's in New Brunswick, customer Ian MacHattie worries the merger will somehow change the coffeehouse Canadians love.

"Part of the success is the ownership was Canadian. Like their psyche, their thinking was similar to ours. Now that ownership is changing, you don't know how that future will be," MacHattie says.

Burger King says the companies will be run separately. There won't be Whoppers alongside the doughnuts. That's a relief to MacHattie, though he says he might consider the combination if that Whopper is served with a Double Double — that's Tim Hortons signature drink. It's a regular coffee with two creams and two sugars.

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STEVE INSKEEP, HOST:

Let's follow up now on Burger King's change of nationality. The U.S. food chain says it's buying the Canadian coffee and doughnut chain Tim Hortons for about $11 billion. Burger King wants to move its headquarters to Canada for tax purposes. It's also absorbing a company that is arguably as much a part of Canadian life as the game of hockey.

We sent Maine Public Radio's Jay Field over the border to learn more about a brand that Canadians lovingly refer to as Timmy's.

JAY FIELD, BYLINE: It doesn't take long to see a Tim Hortons after clearing customs. The restaurants are everywhere in Canada. That's the point of this ad, marking the chain's 50th anniversary this year.

(SOUNDBITE OF TV AD)

UNIDENTIFIED SINGER: (Singing) I've been everywhere, man. I've been everywhere. I've been to Cooksville, Stouffville, Bainesville, Bowmanville, Bonville Unionville.

FIELD: At this Tim Horton's in New Brunswick, a gleaming glass display case filled with doughnuts greets a steady stream of customers. Sleek booths line one wall. Two chairs and a small coffee table sit in front of a gas-burning fireplace.

PERCY GRAHAM: I get it first thing in the morning and plus I get my breakfast. I come through here about 5:30 and they're open. Everybody's friendly.

FIELD: After his early morning Timmy's, Percy Graham (ph) heads to work at a nearby fish processing plant.

GRAHAM: Then I do my 10 hour shift and 6, 7 o'clock - I come back through here and get coffee again.

FIELD: By one estimate, sales at Tim Hortons restaurants make up more than 25 percent of all food service transactions in Canada. 8 out of 10 cups of coffee in the country are bought from Tim Hortons, according to the chain. Not only that, the company was founded by a hockey player.

ERIC ATKINS: It really is an iconic brand in Canada.

FIELD: Eric Atkins is a business writer at Canada's Globe and Mail newspaper.

ATKINS: They're in every small town, they're all over the larger cities. They're loved for their coffee - which is consistent - and their doughnuts. Canadians love their doughnuts.

FIELD: The hockey player who founded the chain in 1964 was the late Tim Horton, a legend who played for the Toronto Maple Leafs, as well as the New York Rangers, Buffalo Sabres and Pittsburgh Penguins.

SANDRA DUDYCH: People grab a Timmy's en route to their kids' hockey games.

FIELD: Sandra Dudych says players on her city's NHL team - the Winnipeg Jets - can often be found hanging out before practice at the Tim Hortons kiosk in their arena.

DUDYCH: If you look at the food industry, a lot of the food industry is not home-grown in Canada. Tim Hortons was.

FIELD: Tim Hortons has been owned by a U.S. company before - the fast food chain Wendy's. Then the two split up.

Burger King says this merger will bring more Tim Hortons into the U.S. Analysts say the two together might better compete in markets overseas. Putting the headquarters in Canada could also mean getting the benefit of lower corporate taxes.

Back at Timmy's in New Brunswick, Ian MacHattie worries the merger will somehow change the coffeehouse Canadians love.

IAN MACHATTIE: Part of the success was the ownership was Canadian - like their psyche, their thinking is similar to ours. So now that ownership is changing, you don't know how that future will be.

FIELD: Burger King says the companies will be run separately. There won't be Whoppers alongside the doughnuts.

That's a relief to MacHattie, though, he says he might consider the combination if that Whopper is served with a Double Double. That's Tim Horton's signature drink - a regular coffee with two creams and sugars.

For NPR News, I'm Jay Field. Transcript provided by NPR, Copyright NPR.