Consumer ambivalence is the reason Tims and many other quick service restaurants are rethinking how to reach millennial and Gen Z diners, say experts who point to similarly minded overhauls at McDonald’s, Boston Pizza and Panera Bread. People walk past the newly renovated Tim Hortons in Toronto on Thursday, July 25, 2019. THE CANADIAN PRESS/Nathan Denette

Consumer ambivalence is the reason Tims and many other quick service restaurants are rethinking how to reach millennial and Gen Z diners, say experts who point to similarly minded overhauls at McDonald’s, Boston Pizza and Panera Bread. People walk past the newly renovated Tim Hortons in Toronto on Thursday, July 25, 2019. THE CANADIAN PRESS/Nathan Denette

Tims’ upscale cafe luring millennials with nitro brews, Instagrammable doughnuts

This younger group wants customizable drinks, in-store technology such as charging stations

Julia Hemphill is just the kind of customer that Tim Hortons would love to see more of: a professional, urban millennial.

But she admits she’s not one to go out of her way to visit the chain, noting her coffee purchases are largely driven by convenience: “If I pass a Tim Hortons, I pass a Tim Hortons. If there’s a lineup I won’t go there. If there isn’t, I will.”

Still, the 39-year-old and her three companions joined throngs of curious customers who lined up at the brand’s much-touted “innovation cafe” this week to sample a line of specialty drinks and doughnuts more typically seen at higher-end eateries.

Hemphill ordered the nitro coffee — ”It’s actually shockingly good,” she says — and approved of the modern decor of faux-marble tabletops, walnut wood accents and velvet bench seating.

“It had kind of stagnated before. It’s nice to see it new,” says Hemphill.

But while she would return for the menu, the coffee shop is not likely to become her hangout spot.

Hemphill, at the older end of the millennial cohort, says she’s more likely to meet friends for a cocktail than a coffee, which she generally brings back to her desk: “Coffee is work.”

Such ambivalence is the reason Tims and many other quick-service restaurants are rethinking how to reach millennial and Gen Z diners, say experts who point to similarly minded overhauls at McDonald’s, Boston Pizza and Panera Bread.

The coffee chain’s experiment is billed as “a modern interpretation of the Tim Hortons brand.” Its 12 “Dream Donut” flavours include maple bacon, blueberry hibiscus, hazelnut butter cream and a brown butter and sea salt variety, each selling for $1.99 — roughly double the cost of regular flavours.

Tims’ global marketing chief acknowledges the store’s clean design and Instagram-ready treats are tailored to young, urban professionals: “They look for a store like this, they look for a design like this,” says Axel Schwan.

However, he insists the rest of the chain’s tried-and-true drip coffee and Timbits are not going anywhere: “Our target group is Canada.”

The specialty treats and premium sandwiches are only available at the King Street store, as are seven different brewing methods that include single-origin pour overs and cold brews. If they’re a hit with customers, they could be rolled out to other restaurants, says Schwan.

The tactic also allows Tim Hortons to test how far they can stretch a brand known for no-frills products with prices to match.

The quick-service market in general has been shifting upscale for a while now, leaving room for Tims to test more expensive items at prices that can still be considered relatively low, says food service industry expert Vince Sgabellone.

“Starbucks (is) already arguably one of the more expensive beverage locations and then they came out with their ‘reserve’ brand which is even more expensive — I had a $9 coffee there not too long ago,” says Sgabellone, of the NPD Group.

“There’s room for that premiumization. People are willing to spend a little more in quick service as long as they get the quality and the service that they expect with the premium pricing.”

Tims’ “innovation cafe” is clearly not about pleasing regular customers, but about luring people who otherwise don’t go to a traditional Tim Hortons, he adds.

Much like the urban-focused McCafe from McDonald’s, the Tim Hortons experiment edges the brand towards the “fast casual” tier, in which premium-quality food comes with fast-food service and better value, says Sgabellone.

This segment of the market is growing at about eight per cent, whereas quick-service restaurants as a whole are only growing at about two-to-three per cent, Sgabellone says.

Brand expert Susan Weaver adds that customers are increasingly “trading down” from full service, mid-tier eateries to these quick-service outlets as they seek better value for their dollar.

She points to upscale food courts that have reinvented mall food, as well as the McCafes, which each feature unique menus and artisan sandwiches.

Millennials are an especially sought-after market because of their size, their larger disposable income, tendency to eat out more and desire for convenience, says Weaver, managing director of Pearl Strategy & Innovation Design Inc.

But they are fickle, she adds.

This younger group wants customizable drinks, in-store technology such as charging stations, eco-friendly packaging and the ability to see their food being assembled and their drinks being made — all features of the new Tim Hortons’ venture.

The problem for Tim Hortons, she argues, is that it’s beloved by Boomers and regarded as “your parents’ brand.”

And the fact that “Tim Hortons makes probably 80 per cent of their profits from hot coffee and millennials do not drink that,” says Weaver, whose Oakville, Ont., company has worked with Tim Hortons on their lunch menu in the past.

“We’ve done a lot of work for Tim Hortons and we always said to them: ‘You might have to rebrand if you want to get to (millennials).’”

She mused on the possibility that’s the future of Tims’ innovation cafe, suggesting the brand should expand the concept as a separate offering for millennials in every big urban city.

Sgabellone also wouldn’t be surprised if the experiment evolves into “a small niche sub-brand of theirs.”

“They’re stating right off the front it’s a one-off, but like with any brand, if it’s a success they’re going to make it a two-off and a six-off and they’ll be opening more.”

Cassandra Szklarski, The Canadian Press

Just Posted

Emily Steele holds up a collage of her son, 16-year-old Elijah-Iain Beauregard who was stabbed and killed in June 2019, outside of Kelowna Law Courts on June 18. (Aaron Hemens/Capital News)
Kelowna woman who fatally stabbed Eli Beauregard facing up to 1.5 years of jail time

Her jail sentence would be followed by an additional one to 1.5 years of supervision

Asia Youngman (right) is pictured shooting another short film she wrote and directed titled Hatha. (Luba Popovic)
Peachland set to star in fantasy thriller film about N’xaxaitk’w — a.k.a. the Ogopogo

The film will follow an Indigenous teen as she navigates peer pressure, bullying and identity

Fruit farmers in the Okanagan and Creston valleys are in desperate need of cherry harvesters amid COVID-19 work shortages. (Photo: Unsplash/Abigail Miller)
‘Desperate’ need for workers at Okanagan cherry farms

Fruit farmers are worried they’ll have to abandon crops due to COVID-19 work shortages

Earls On Top at 211 Bernard Avenue in Kelowna. (Google Maps photo)
Downtown Kelowna’s Earls ordered closed after COVID-19 transmission

Earls on Top on Bernard Avenue will be closed from June 18 to June 27

Danny Fulton receives his first dose of the COVID-19 vaccine at the Coast Capri Hotel on April 27. The pop-up clinic was hosted by the First Nations Health Authority. (Aaron Hemens/Capital News)
Drop-in COVID-19 vaccine clinic planned for Kelowna

Clinic at Kelowna Secondary School from June 22 to 24 from 1 p.m. to 7:30 p.m.

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

Jeanette Megens
KCR: Volunteering is sharing your story

Kelowna Community Resources shares stories of its volunteers in a weekly column

Cpl. Scott MacLeod and Police Service Dog Jago. Jago was killed in the line of duty on Thursday, June 17. (RCMP)
Abbotsford police, RCMP grieve 4-year-old service dog killed in line of duty

Jago killed by armed suspect during ‘high-risk’ incident in Alberta

The George Road wildfire near Lytton, B.C., has grown to 250 hectares. (BC Wildfire Service)
B.C. drone sighting halts helicopters fighting 250 hectares of wildfire

‘If a drone collides with firefighting aircraft the consequences could be deadly,’ says BC Wildfire Service

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A dose of the Pfizer-BioNTech COVID-19 vaccine is pictured at a vaccination site in Vancouver Thursday, March 11, 2021. THE CANADIAN PRESS/Jonathan Hayward
NACI advice to mix vaccines gets varied reaction from AstraZeneca double-dosers

NACI recommends an mRNA vaccine for all Canadians receiving a second dose of a COVID-19 vaccine

A aerial view shows the debris going into Quesnel Lake caused by a tailings pond breach near the town of Likely, B.C., Tuesday, Aug. 5, 2014. THE CANADIAN PRESS/Jonathan Hayward
Updated tailings code after Mount Polley an improvement: B.C. mines auditor

British Columbia’s chief auditor of mines has found changes to the province’s requirements for tailings storage facilities

Starting in 2022, the Columbia Shuswap Regional District is extending dog control to the entire Electoral Area D. (Stock photo)
Dog control bylaw passes in Shuswap area despite ‘threatening’ emails

CSRD board extending full dog control in Electoral Area D starting next year

A North Vancouver man was arrested Friday and three police officers were injured after a 10-person broke out at English Bay on June 19, 2021. (Youtube/Screen grab)
Man arrested, 3 police injured during 10-person brawl at Vancouver beach

The arrest was captured on video by bystanders, many of whom heckled the officers as they struggled with the handcuffed man

Most Read