Tim Hortons: Cracking The Indian Code

Tim Hortons, the Canadian coffee giant, entered the Indian market in August 2022 with its first store in Gurugram’s Cyber Hub. It is one of the largest coffee chains in the world, with a presence in 13 countries across the globe.

Reflecting on the chain’s success, Tarun Jain, CEO, Tim Hortons India, says, “It's been a fantastic journey. We were one of the youngest brands in the cafe segment and I think people have taken it well, given that it's a global cafe chain which has come to India.”

In just over a year and a half since opening its first store, Tim Hortons has rapidly expanded to 29 outlets across Delhi NCR, Mumbai, Pune, Bangalore and Punjab. The brand's runaway success flies in the face of conventional wisdom that Indian consumers primarily crave local flavours and affordable offerings.

The Indian Route
“India is a natural market that every MNC seeks because if you look at the demographics, the economic growth and opportunity - India is pretty much top of the line right now. It's a very culturally diverse and varied market, more than what we've seen in other parts of the world,” states Jain.

While their coffee is of international standard, Tim Hortons climbed its way up by Indianising its food menu through extensive R&D, dissecting consumer preferences to deliver an experience that would resonate with the local audience.

“We did a lot of work to develop things for the Indian market and taste. For example, croissants are a universal platform, but we created a chicken tikka croissant that people in India can relate to because they love croissants and chicken tikka,” explains Jain.

Nonetheless, the consistency in coffee quality at Tim Hortons does not change in any part of the world. “We very proudly serve only 100 per cent premium Arabica coffee. It is something we are very finicky about because it is at the core of our offering,” states Jain.

Expansion Spree
Thriving on the fusion of global and local strategy, which is pairing premium international coffee with localised food had been well received in the country. Jain recounts the response when Tim Hortons launched in Mumbai, “We had queues in Bandra and Lokhandwala for about a month. People were enjoying the fact that they had a global quality beverage along with food developed keeping their taste and preferences in mind.”

Affordability has been another key driver of Tim Hortons' success. “If you look at the price offering, it's very democratic. We have timbits starting at just Rs 49 and a wide range of food options ranging between Rs 200 to Rs 350. The concept is relevant across demographic segments -- we see millennials, families, officegoers and even retired people visiting us,” asserts Jain.

Tim Hortons plans to rapidly scale up its presence and growth in its existing cities while cautiously entering a few new markets like Hyderabad and Ahmedabad this year. “We want a substantial presence in each city for better serviceability and economies of scale. We choose the real estate and formats very critically, like airports or dense retail hubs or malls where you see good revenue generation,” says Jain.

The Challenges
However, expanding at a rapid pace in a highly fragmented market like India is not without its challenges. According to Jain, “Good real estate is definitely a key challenge and opportunity. We want to be present in high-footfall locations with the right customer profile, but prime real estate is limited.”

People are another obstacle, with the talent war for trained service staff being fierce. “Good trained manpower is very much in demand. When you grow fast, you have to nurture talent at a rapid pace and feed stores with the right quality of people,” acknowledges Jain.

A third challenge is keeping the brand relevant across India's diverse regions through constant menu innovation. “People have a certain expectation from a brand like ours. Their needs are fast evolving and different across the country. When going to a new market, we have to adapt the menu, positioning and everything accordingly,” says Jain.
Despite these obstacles, Tim Hortons is projecting double-digit growth figures in India this year, driven by both new store launches and improving same-store sales. “As we gain economies of scale and back-end efficiencies, we can offset inflationary pressures without passing too much on to customers,” says Jain.

Leveraging Tech
The coffee chain is also leveraging digital technologies like online ordering and social media to engage with its rapidly growing customer base. “Social media is very relevant for listening to customers and getting direct feedback that helps evolve our offering. It's a very competitive space, but also a cost-effective way to amplify our brand messaging,” he stresses.

With its potent combination of global quality, localised offerings and affordable pricing, Tim Hortons seems to have cracked the Indian market. As Jain sums it up, “Competition is fantastic as it grows the entire category. But we are focused on our own core strengths -- delivering a great product and experience to our customer.”