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Vaibhav Punj, CEO of Tim Hortons Singapore. /Photo provided.

Why Tim Hortons bets on ‘third-place’ to be first in Singapore’s coffee market

The brand aims to offer unique and healthier choices for consumers.

For Tim Hortons, dominating ‘third place’ in Singapore’s Western coffee market scene is its main strategy to compete against local coffee brands and grab-and-go models with cheaper options

“Third places,” as described by sociologist Ray Oldenburg, are locations that facilitate social interaction, usually a public place people frequent. This often refers to places where people spend time aside from their homes (first place) or work (second place). Coffee shops and cafes with relaxed atmospheres are often called third-place locations.

Tim Hortons Singapore CEO Vaibhav Punj said that capturing this market is better than competing directly with koptiams, new age cafes and coffee roasters, and a recent spike of grab-and-go coffee concepts who just entered the market.

“The size of the piece is quite big as well. We think we can build a very successful business in Singapore,” Punj said.

“Singapore is an interesting market. There are three very clear markets, the Central Business District (CBD), the heartland malls, and the tourist-specific malls like Sentosa and Orchard. We are looking at all these clusters and we intend to open 10 to 15 restaurants going forward,” Punj said.

He added that having a restaurant footprint is important for Tim Hortons because around 70% of their revenue comes from in-store sales, compared to takeaway and delivery which accounts for around 25%-30%.

“We will continue to look at locations, which are the right size for us. We are not
planning to open really massive restaurants at this point in time, because I think that's something which is not viable anymore. People are not utilising all that space,” Punj said.
 
Tim Hortons has, so far, opened in VivoCity. They also plan to open branches in NEX, Suntec City, One Raffles Place, and Jurong Point.
 
Punj said Tim Hortons’ entry into Singapore will serve as a “stepping stone” for the brand to get into neighbouring countries like Indonesia and Malaysia which are also bigger markets.
 
“Given that [Singapore] is a regional hub, we are trying to create an HQ in Singapore to be able to manage the markets which are around Singapore,” he said.

Healthier products, unique offerings

Singapore, where diabetes is a serious health concern and interest in healthy diets is growing, Tim Hortons is strategically positioning itself to stand out in the crowded coffee market by tweaking its menu items to ensure it fits Singapore's Nutri-Grade guidelines. 
 
The Ministry of Health (MOH) announced that beginning 30 December 2023, freshly prepared beverages must be graded based on their sugar and saturated fat content.
 
“The whole idea is to give options to people to choose whether they want something less sweet, or more sweet,” Punj said.
 
Even before the launch of their nutri-grade line, Tim Hortons had already made an effort to cater to Singaporean consumers by lowering the sweetness levels of their products.
 
“In general, the sweetness levels [of our products in Singapore] are lower than some of what our other Asian markets and even Western markets can take,” Punj said.
 
Tim Hortons’ commitment to cater to health-conscious Singaporeans extends beyond just reducing sugar levels or offering nutri-grade products.
 
The Canadian coffeehouse and restaurant chain is also working with its suppliers to create products that have ingredients that are free of artificial flavours and preservatives.
 
“[We want to have] more clean label products coming into the restaurants. It’s a hard thing to do, but this is something which we are working with our suppliers extremely closely,” Punj told the publication.
 
Recognising Singapore’s strong dedication to environmental sustainability, Tim Hortons is broadening its focus beyond just offering healthier options. Punj said Tim Hortons uses sustainable packaging materials and even uses sustainable palm oil in their kitchen.
 
“In every single aspect of the restaurant, there is a sustainability piece to that,” Punj said.

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