Brett Bundale, The Canadian Press
Published Monday, August 16, 2021 2:29PM EDT
Last Updated Monday, August 16, 2021 6:37PM EDT
Tim Hortons China is planning to go public in a deal that could rapidly speed up the chain’s roll out in the growing coffee market, with plans to open more than 2,500 new locations in five years, according to an investor presentation.
Restaurant Brands International confirmed Monday that its joint venture with private equity firm Cartesian Capital Group, which includes Tencent and Sequoia Capital as major shareholders, has entered into a business combination agreement with Silver Crest Acquisition Corp. The joint venture, officially named TH International Ltd. but often branded Tim Hortons China, opened the first Tim Hortons in China in Shanghai in 2019.
Restaurant Brands said the deal with Silver Crest, a special purpose acquisition company, would see TH International traded on the Nasdaq stock exchange.
Documents filed with the U.S. Securities and Exchange Commission pegged the implied value of Tim Hortons China at US$1.69 billion, with the expected value of the new combined entity when it starts trading at above US$2 billion.
Under the deal, Tim Hortons would bring its store count in China to more than 2,750 by 2026, according to documents.
That’s much more ambitious than previously announced plans. In 2018, Restaurant Brands said its partnership with Cartesian Capital would see more than 1,500 Tim Hortons restaurants in China in 10 years.
An investor presentation by Tim Hortons China included in regulatory filings said the company plans to nearly double its footprint from its current store count of 199 to 388 locations by the end of 2021.
The coffee and doughnut chain would continue to expand at a rapid rate, with 733 locations by the end of 2022, 1,163 by the end of 2023, 1,678 by the end of 2024, 2,203 by the end of 2,025 and 2,753 by year end 2026, according to the presentation.
“We will have nearly 400 units by the end of this year, opening one every 36 hours,” said Tim Hortons China chief executive officer Yongchen Lu, according to a transcript of the company’s investor presentation video filed with the SEC.
The restaurants would be a mix of flagship stores, classic stores and “Tims Go” locations, the documents said.
Meanwhile, the regulatory filings also offer a glimpse into how the brand – launched by a Canadian hockey player in the 1960s – performs in China.
The coffee and doughnut chain reported strong same-store sales growth of 42.5 per cent in the first quarter of 2021, the presentation said.
Still, the Tim Hortons menu has been tweaked to appeal to the preferences of the local market.
Tim Hortons China Chief Consumer Officer Bin He referred to the menu as “innovative classical products.”
“Timbits were changed to mochi holes, given original doughnut holes did not sell well in China,” he said in the investor presentation. “This face change makes Timbits an easier bite to reward myself in the afternoon and share with co-workers.”
Restaurant Brands said the proposed merger, which still requires regulatory approval, will position Tim Hortons to benefit from China’s increasing coffee consumption.
This report by The Canadian Press was first published Aug. 16, 2021.
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Tiny wines find home in B.C.’s market, as Canadians consider reducing consumption
VANCOUVER — Wine lovers have growing options on the shelf to enjoy their favourite beverage as producers in B.C. offer smaller container sizes.
Multiple British Columbia wineries over the last several years have begun offering their product in smaller, single-serve cans and bottles.
Along with making wine more attractive to those looking to toss some in a backpack or sip on the golf course, the petite containers leave wineries with options for a potential shift in mindset as Canadians discuss the health benefits of reducing alcohol consumption.
Vancouver-based wine consultant Kurtis Kolt said he’s watched the segment of the wine industry offering smaller bottles and cans “explode” over the last several years, particularly during the COVID-19 pandemic when people were meeting outdoors in parks and beaches and looking for something more portable to take with them.
“You’re not taking a hit on quality, you know? In fact, if someone is only going to be having a glass or two, you’re cracking a can and it’s completely fresh, guaranteed,” he said.
It’s also an advantage for people who want to drink less, he said.
“It’s much less of a commitment to crack open a can or a small bottle or a smaller vessel than it is to open a bottle,” he said.
“Then you have to decide how quickly you’re going to go through it or end up dumping some out if you don’t finish it.”
Last month, the Canadian Centre on Substance Use and Addiction released a report funded by Health Canada saying no amount of alcohol is safe and those who consume up to two standard drinks per week face a low health risk.
That’s a significant change from the centre’s 2011 advice that said having 15 drinks per week for men and 10 drinks per week for women was low risk.
Health Canada has said it is reviewing the report.
Charlie Baessler, the managing partner at Corcelettes Estate Winery in the southern Interior, said his winery’s Santé en Cannette sparkling wine in a can was released in 2020 as a reduced alcohol, reduced sugar, low-calorie option.
“We’ve kind of gone above and beyond to attract a bit of a younger, millennial-type market segment with a fun design concept of the can and sparkling, low alcohol — all these things that have been recently a big item on the news,” he said.
Santé en Cannette is a nine per cent wine and reducing the alcohol was a way to reduce its calories, he said. The can also makes it attractive for events like a picnic or golf, is recyclable, and makes it easier for restaurants that might want to offer sparkling wine by the glass without opening an entire bottle.
At the same time, the lower alcohol content makes it an option for people who might want a glass of wine without feeling the same effect that comes from a higher alcohol content, he said.
“So the health is clearly one incentive, but I think more importantly, so was being able to enjoy a locally made product of B.C. from a boutique winery, dare I say, with a mimosa at 11 o’clock and not ruin your day,” he said.
Baessler said the winery has doubled production since the product was first released to about 30,000 cans a year, which they expect to match this year.
He said there’s naturally a market for the product but he doesn’t expect it to compete with the higher-alcohol wine.
“So this isn’t our Holy Grail. This is something that we do for fun and we’ll never compete, or never distract, from what is our core line of riper, higher-alcohol wine,” he said.
Jeff Guignard, executive director of B.C.’s Alliance of Beverage Licensees, which represents bars, pubs and private liquor stores, said the industry has seen a shift in consumers wanting options that are more convenient.
“It’s not a massive change in consumer behaviour but it is a definitely a noticeable one, which is why you see big companies responding to it,” he said.
Guignard said the latest CCSA report is creating an increased awareness and desire to become educated about responsible consumption choices, which is a good thing, but he adds it’s important for people to look at the relative risk of what they’re doing.
“If you’re eating fast food three meals a day, I don’t think having a beer or not is going to be the single most important determinant of your health,” he said.
“But from a consumer perspective, as consumer preferences change, of course beverage manufacturers respond with different packaging or different products, the same way you’ve seen in the last five years, a large number of low-alcohol or no-alcohol beverages being introduced to the market.”
While he won’t predict how much the market share could grow, Guignard said non-alcoholic beverages and low-alcoholic beverages will continue to be a significant piece of the market.
“I don’t know if it’s reached its peak or if it will grow. I just expect it to be part of the market for now on.”
This report by The Canadian Press was first published Feb. 5, 2023.
Ashley Joannou, The Canadian Press
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