Tim Hortons scrambles to find Canadian suppliers, as U.S. tariffs loom
Amid the looming U.S. tariffs, coffee giant Tim Hortons is scrambling to find Canadian suppliers for items currently sourced from south of the border.
“It’s impossible to guess what may happen with tariffs in the coming months or years,” said Michael Oliveira, director of communications for Tim Hortons, in an email. “That is why we are looking at every possibility in our supply chain.”
Oliveira would not detail what percentage of its supplies are sourced from the U.S., but said “the vast majority of everything at Tim Hortons is sourced from Canada — for Canada.”
Oliveira added that the company has a long history of supporting Canadian enterprises.
“We are among the biggest supporters of Canadian farmers and have large relationships with many Canadian manufacturers and producers,” said Oliveira. “We also own and operate two of our own manufacturing plants, including our flagship coffee roastery in Ancaster.”
Businesses across Canada are all working to reconfigure supply chains ahead of U.S. President Donald Trump‘s 25 per cent tariffs on all Canadian products coming into the U.S — which are set to begin March 4 after Prime Minister Justin Trudeau reached an 11th-hour deal with Trump to delay them 30 days.
Even if a majority of its supplies already come from Canada, retail and supply chain experts said it will be challenging for Tim Hortons to find new suppliers.
“It’s not easy,” said Fraser Johnson, a professor at Western University’s Ivey Business School, noting it would require cancelling existing contracts and finding a reliable and adequately-priced alternatives.
But Canadians shouldn’t expect their morning double-double and donuts to cost more — for the time being.
While finding a new supplier would likely mean Hortons would have to pay more for certain items, Ken Wong, a professor at Queen University’s Smith School of Business, said the company wouldn’t likely offload the expense to customers — in the short term.
“If I was Tim Hortons, I would probably postpone (raising prices) for a month or two,” Wong said, “hoping that this tariff situation goes away.”
But the company would likely “have to pass it on to the customer” if the trade war extends, said Wong.
The comments from Hortons comes on the same day the coffee chain’s parent company, Restaurant Brands International, announced a strong fourth quarter in 2024, bringing in $361 million (U.S.) from its brands, which also include Burger King, Popeyes and Firehouse Subs.
Companies on both sides of the border are bracing for a period of tumult that could kick off if Trump makes good on his vow to impose tariffs on Canadian and Mexican goods in a few weeks.
While automakers and others relying on steel and aluminum are likely to take a large hit, food also stands to be impacted.
With the growing season in Canada limited by its climate, the country often has to look elsewhere for produce like oranges and lettuce. But it also has strengths that Toronto-based Tim Hortons can leverage.
Canada is a major supplier of the world’s canola, grains, potatoes, tomatoes and beef.
As a result, Hortons Canada and U.S. president Axel Schwan said Tims’s scrambled egg wraps are packed with 100 per cent Canadian eggs and its coffee is roasted in Ancaster.
“The vast majority of our products come from Canada,” said Schwan, “so that’s a very good starting point and we will make it even more Canadian.”
Tims has been working to make those ties more obvious as Canadians turn to supporting homegrown businesses.
Over the weekend, it ran a Super Bowl ad reimagining the late Stompin’ Tom Connors classic “The Hockey Song” to call football “the second-best game you can name.” The spot ends with the message, “Sorry, not sorry. We’re proudly Canadian.”
When it shared the spot online, commenters cast doubt on the brand’s Canadian-ness, pointing to the fact that 3G Capital, an investment office for a trio of Brazilian billionaires, has a stake in Tims’ parent company, Restaurant Brands International.
Schwan maintains “we are also the most Canadian brand, according to all the research that we have, and so that’s a really, really strong starting point.”
He spoke the same day as RBI, which also owns Burger King, Popeyes and Firehouse Subs, raised its quarterly dividend to 62 cents U.S. per share, up from 58 cents U.S. per share.
The restaurant owner, which keeps its books in U.S. dollars, was encouraged to make the hike as its fourth-quarter net income hit US$361 million.
The profit amounted to 79 cents US per share for the quarter ended Dec. 31, down from US$726 million or US$1.60 per diluted share a year earlier.
On an adjusted basis, it earned 81 cents US per diluted share in its latest quarter, up from an adjusted profit of 75 cents US per diluted share a year earlier.
Revenue totalled US$2.30 billion for the quarter, up from US$1.82 billion in the last three months of 2023, as system-wide sales totalled US$11.28 billion in its latest quarter, up from US$10.89 billion a year earlier.
Overall comparable sales rose 2.5 per cent.
With files from The Canadian Press
This article was first reported by The Star
