Tim Hortons’ shares are soaring on the news that Burger King is in talks to buy the Canadian coffee chain.
Both companies’ shares increased on the news. The move would create the third largest fast food company in the world.
Combined, the companies would be worth about $US18 billion and have more than 18,000 restaurants in 100 countries.
Tim Hortons alone is worth about $US8.4 billion. It’s the largest coffee chain in Canada with 4,546 restaurants, including 866 in the U.S.
The chain boasts that it sells eight out of 10 cups of coffee in Canada, where it has 3,630 outlets. That’s equal to about 36,000 locations in the U.S. on a per capita basis, which is double the number of McDonald’s in the U.S., theNew York Timeswrites.
The map below shows Horton’s locations in the U.S. and Southern Canada.
Tim Hortons sold just one coffee blend until last week, when it added a dark roast. The companypromisesthat all of its coffee is served within 20 minutes of being brewed, or it’s thrown out.
The chain, once called Canada’s “most treasured brand,” also sells tea, smoothies, and food including doughnuts, made-to-order paninis, wraps and soups.
The company was founded by hockey legend Tim Horton. The first location opened in Ontario in 1964 and it made its U.S. debut 20 years later.
Wendy’s bought Tim Hortons in 1995 when it had just 1,000 stores, then spun it off in 2006. During its decade of ownership, Wendy’s opened a number of joint stores, like the one pictured below.
The chain’s same-store sales grew 2.6% in Canada and 5.9% in the U.S. in the most recent quarter. Traffic has been declining for nine consecutive quarters in Canada, however, and it was flat in the U.S. last quarter, compared to the previous year.
Tim Hortons CEO Marc Caira blamed the traffic trends on a “new era of low growth, competitive intensity, evolving consumer demands and changing technology,” in a recent earnings call.
The company is betting on menu innovation to keep driving sales growth and eventually attract new customers.
“We have identified some key trends we are seeing in the market, including changing demographics, increased emphasis on nutrition, health and wellness and a desire for bold flavours along with fresh quality ingredients,” Caira said. “Menu innovation is also an important part of our strategy to grow [customers’] average check. We plan to introduce more value-added premium products, as well as appealing side dishes that will encourage our guests to purchase combos.”
For decades, the chain was best known for its coffee and doughnuts. Now, the chain is putting more emphasis on its made-to-order sandwiches, like the Angus Steak Melt Panini below.
The breakfast menu includes sandwiches, paninis and bagels with a combination of eggs, cheese, bacon, sausage or turkey sausage. The chain also sells pastries and muffins.
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