Next Up at China’s Coffee Counter? Tim Hortons

U.S. giant Starbucks will soon be getting some Canadian competition at the China coffee counter.

Tim Hortons, a household name in its home market, is looking to follow its American counterpart to China’s tea-drinking culture by offering its signature coffee, doughnuts and other food to local consumers. The company, owned by Restaurant Brands International Inc., plans to open about 1,500 new shops in China over the next decade, it announced on Wednesday.

Major Western fast-food chains like Starbucks, KFC and McDonald’s have found big success in China, often despite difficult odds due to hugely different local tastes. But those successes have often come after years of investment aimed at boosting their brands and educating local consumers about their Western fare. By comparison, more midsize chains like Tim Hortons have had more difficulty due to their limited resources.

Named after a Canadian hockey player who set up the chain in 1964, Tim Hortons aims to tackle the China market with private-equity firm Cartesian Capital Group. The pair will form a joint venture that will hold the master franchising rights for China, the company said.

“We have two main priorities at Tim Hortons: building and strengthening our brand in Canada; and expanding our iconic Canadian brand to the rest of the world,” said Tim Hortons President Alex Macedo. “China’s population and vibrant economy represent an excellent growth opportunity for Tim Hortons in the coming years. We have already seen Canada’s Chinese community embrace Tim Hortons and we now have the opportunity to bring the best of our Canadian brand to China with established partners who have expertise in the industry and the country.”

As one of North America’s largest quick-service restaurant chains, Tim Hortons has more than 4,700 restaurants in Canada, the U.S. and around the world, according to the company. The first Chinese outlet of Tim Hortons could open as soon as 2019, The Wall Street Journal reported, citing people familiar with the matter.

China’s rising middle class and young generation of consumers have increasingly embraced coffee drinks. According to the International Coffee Organization, coffee consumption in China has nearly tripled in the past four years, with coffee imports growing 16% a year.

The emerging market has lured global brands like Starbucks and Britain’s Costa Coffee to compete, while homegrown coffee shops like Luckin Coffee, which recently raised $200 million, are also expanding quickly. Starbucks announced in May that it will open 600 new stores in China each year until the end of the 2022 fiscal year, up from its current pace of 580 new openings a year.

Contact reporter Han Wei (weihan@caixin.com)