Tim Hortons coffee and breakfast sandwiches are about to get a little more expensive as the North American coffee chain prepares to raise its prices next Wednesday. The price for coffee will jump up by an average of 10 cents. Breakfast sandwich prices will also jump up by 10 cents in all provinces but Ontario to $2.99.
Tim Hortons isn’t the only brand raising its prices due to the coffee Arabica coffee bean price hike last October. Keurig, makers of “k-cup” coffee pods, raised their prices earlier this month by 9% and Starbucks raised the cost of their coffee products over the summer as well.
Why The Price Increase
Brazil is the largest producer of coffee beans in the world and this summer’s drought is wreaking particular havoc on Brazilian coffee growers and as a result world prices as well.
How Demographics Affect Pricing
Tim Hortons’ flagship product is coffee. Not only does Tim Hortons own 62% of Canada’s coffee market, but it also has more outlets in Canada than McDonald’s and Starbucks combined. Naturally, a brand with wider market appeal will be less expensive than a brand with less market appeal. Tim Hortons positions itself as the brand for small towns, sports fans, and the working-class Canadians. It is not a brand for middle-class families and business professionals; that market is reserved for Starbucks. It’s also a type of brand that is less likely to pay a premium to boost its image and the consumer experience.
How Geography Affects Pricing
Tim Hortons’ first store opened in Ontario and is more dominant in central and eastern Canada. McCafe also entered Canada through Ontario, but has a better foothold in British Columbia and Quebec. Tim Hortons, on the other hand, didn’t enter Quebec until the 1970s. Appealing to Quebec was more of an after-thought. Out West, Starbucks dominates the market with its appeal to the laid-back west-coast culture. So if you’re wondering why the price of Tim Hortons coffee is higher in Quebec and British Columbia than it is in Ontario, geography and market dominance have a lot to do with it.
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