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There is an interesting interview on QSR Online with Paul House, president/COO of Tim Hortons, the Canada-based doughnut chain that is owned by Wendy’s International and that is looking to make a move into the US with a plan for 500 stores here by 2010.

Most intriguing about House’s comments is how a guy running company known as a coffee-and-doughnut chain – and that could be seen as a challenger to Dunkin’ Donuts and the faltering Krispy Kreme as it moves south of the border – seems to be far more focused on competing with McDonald’s and its brethren for shoppers’ luncheon dollars.

“Lunch is a growing segment of our business. We’re second to McDonald’s at lunch here in Canada. For somebody that was late coming into lunch, we’re very happy with our position,” he says.

“We’re a healthy alternative because of our soup and sandwich business. Our soup gives us great equity for health. The sandwiches add credibility; everyone is moving into that category. That’s good and bad and shall certainly pass, as well. But, sandwiches are the flavor of the day, right now. We do many other things. We’re into beef stew, chicken stew. We’re a healthy, wholesome lunch.”

House says that doughnuts, while an important part of the company’s business, now average just 10-15 percent of most stores’ business. “The business has radically changed in the 20 years through my career here. And, it’s continuing to change. The whole food industry in the next five years will change more dramatically than it has in the past 20.”

What he’s talking about is the increased emphasis on health. “The emphasis on healthy alternatives and portion size is going to – is - radically changing the landscape,” he says. “Just look at what McDonald’s is doing, what everyone is doing. The things that carried the day 20 years ago will not survive going forward. You need to change your menu and adapt to the changing consumer demands. Those who do it best will be the ones that champion. Those who don’t will go by the wayside.”
KC's View:
Good job by QSR to frame these issues in the House interview. It seems to us that Tim Hortons is picking a good time to come to the US in force, especially because Krispy Kreme seems to be reeling at the moment. And in some ways, it probably is to the company’s advantage that it will be perceived as a new brand. It won’t be seen as reinvention as much as invention. It creates challenges and opportunities. And that’s a good thing.