Business Blog: Hoover’s Business Insight Zone

Today’s Company of the Day is Tim Hortons.

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Ask a Bostonian how popular Dunkin’ Donuts is on its stomping grounds of New England, and you might hear a glowing report about the chain’s coffee. Ask a Southerner the same about Krispy Kreme, and you’ll get an earful about the lightness and sweetness and perfection of their product. Yet for all the loyalty these chains enjoy in their home turf — and the sugar-caked smiles they inspire across the US — they don’t enjoy anything like the market penetration of Tim Hortons in its native Canada. The chain, which was co-founded in 1964 by National Hockey League star Tim Horton, serves a variety of doughnuts and baked goods, along with simple lunch fare and lots and lots of coffee. The chain has been so popular in Canada that the company has little room to expand there, except in selected areas like Quebec. So, like other successful Canadian companies before them, the company has looked to the massive US market for future expansion.

Challenges abound, starting with Starbucks and the aforementioned doughnut chains — above all Dunkin’ Donuts. Most of the US expansion Tim Hortons has enjoyed so far has come close to the Canadian border, where consumers already are familiar with the brand. But don’t count Tim Hortons out, because the chain has evolved over the years to appeal to more customers — by banning smoking, by expanding the menu, by putting stores in malls and other nontraditional venues, and by changing the interiors of the stores to make them more like sit-down restaurants and less like diners. While it wasn’t able to expand in the US very well during the years when Wendy’s International owned it (from 1995 until last year), the company’s current management is intent on bringing the best in Canadian breakfast food to hungry Americans.

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