Innovation Monitor: Tim Hortons adds Beyond Meat to its menu

What the coffee chain's trial run means for the future of plant-based meat alternatives.

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Tim Hortons has become the latest Canadian QSR to dive into the meat alternatives craze.

Last week, the coffee chain said it would begin selling a new line of breakfast sandwiches and wraps using sausage substitutes produced by California-based vegan patty maker Beyond Meat, whose shares rose 16% following the news.

Tim Hortons has begun testing the products at 60 restaurants in the GTA, with plans to potentially roll them out nationwide by the end of the summer. Here’s what the move may signify for the future of plant-based meat alternatives and for the brands vying for a piece of the fast-growing market.

The Big Picture

Tim Hortons’ announcement comes two months after A&W launched its own Beyond Meat breakfast sandwich at its 850 Canadian locations, adding to a menu that has included a Beyond Meat plant-based burger since July 2018.

Since first landing in Canada, Beyond Meat has entered Quesada and B.C.-based White Spot restaurant chains and, more recently, announced plans to stock its patties in up to 3,000 Canadian grocery stores (including Loblaw and Sobeys banners, Whole Foods, Longos and natural food stores) by the end of the month.

Beyond Burger is not the only option, however. Kellogg, through its MorningStar Farms Veggie Burgers, and Maple Leaf Foods, through its plant-based Lightlife brand, are among the growing number of brands tapping demand for protein-based meat alternatives.

The meat replacements category is currently “checking a lot of boxes” with consumers, says Philippe Garneau, president and CCO of GWP Brand Engineering. It enables them to make healthier and more environmentally friendly choices, while having “something to double tap when [their] friends post their breakfast absolution.”

While other chains have beaten Tim Hortons to the punch (the company claims to have been working on the deal for over a year), Garneau believes its own announcement is significant precisely because it’s Tim’s, which he describes as “Canada’s away-from-home pantry.”

Similarly, Braden Douglas, founding partner at Crew Marketing Partners, notes that Tim Hortons’ entrance signals that a niche trend is ready for mainstream consumers. As large players throw themselves into the plant-based race, helping to legitimize the category, Douglas says consumers can expect to see more meat alternative innovation go to market.

The Strategy

Beyond Burger Packaging_Canada 2 (1)From Beyond Meat’s perspective, Douglas says entering Canada through QSRs has enabled it to build consumer demand and leverage higher prices and margins at retail  with possibly minimal or no listing fees. “Retail is where Beyond Meat will soar and their patience to hold off until demand was high will pay off.”

For Tim Hortons, working with Beyond Meat will help introduce new items that reach “vegans and meat lovers alike,” according to the company. The strategy reflects that the number of Canadian flexitarians is growing rapidly, with one study finding that nearly 85% of Canadians claim to eat at least one vegetarian meal per month, and almost 50% do so at least once a week.

Moreover, with 4,000 locations, Tim Hortons COO Mike Handcock told the Financial Post he feels the chain will more easily be able to bring plant-based meat alternatives to rural markets.

That could be how it seeks to compete against A&W, whose initial partnership with Beyond Meat was a “win-win,” Douglas says. The burger chain’s decision to go in early gave it the exclusive on a new on-trend innovation, he says, while matching its desire of “carving out a position that is focused on being better,” both with ingredient sourcing and product taste.

The Verdict

Douglas believes offering Beyond Meat gives Tim Hortons’ a “first-mover advantage” over competing coffee chains, but one that could be short-lived. Even early adopter A&W will have to fight to stay ahead, Garneau notes.

Since a range of competitors are likely to enter the space, both chains will need to continue filling the pipeline with new options and innovations to maintain an edge, the experts say.

Tim Hortons, in particular, doesn’t have the benefit of being known as a leader in healthy alternatives, Garneau says. What it has is ubiquity, a loyal following and a business built on coffee rituals.

“This is another new product news story for them that creates an opportunity to increase average ticket,” he says. “Any advantage will only last until the market is saturated with this product. The bigger question may be: is one breakfast patty made from meat alternatives going to taste better at one brand versus another?”

Large restaurant chains currently without a comparable offering will need to quickly “get off the bench,” Douglas says. Families or groups with multiple dietary needs will be more likely to consider restaurants with a (tasty) meatless option.

“If your 14-year-old daughter doesn’t eat meat but the rest of the family does, and you want to grab fast food, they can still choose your chain and everyone’s happy.”