'Will have 300 Tim Hortons stores in India in five years': India CEO

After a delay of about two years, due to the COVID-19 pandemic, Canada's iconic coffee chain Tim Hortons is finally making its entry into the Indian market this summer. To expand its business rapidly and keep tight control over operations, the Oakville-based multinational restaurant chain has roped in the former boss of Starbucks India Navin Gurnaney and plans to own and operate the India outlets. Gurnaney - a coffee chain market veteran shares the company's India plans in a candid chat with Business Today's Arnab Dutta. Edited excerpts:

BT: Where is the first Tim Hortons store coming up? And how many stores does Tim Hortons plan to launch in the next few years?

Navin Gurnaney: First Delhi, then Punjab. We are basically eyeing the Punjabi speaking belt. Tim Hortons is a Canadian brand and there is much awareness about it among Punjabis. Following that we are looking at the west - in and around Mumbai and Gujarat. We plan to open 120 stores in 3 years and 250-300 in the next five years.

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BT: Most international restaurant chain brands partner with local companies in a franchise model. How Tim Hortons plans to operate here?

Navin Gurnaney: We are following the company-owned, company-operated model. The Dubai based Apparel Group, which is a partner, has 1,800 stores across the middle-east including 200 Tim Hortons stores. While Gateway Partners is a private equity partner - based in Singapore, together a local entity has been formed - Apparel Gateway Cafe Pvt. Ltd., which will primarily operate our stores in India.

BT: But why not the franchise model?

Navin Gurnaney: We have been approached by many entities for a franchise agreement but we are not getting into that. We want to operate our own stores with the master franchise with us as we want to keep the brand firmly within our control.

However, we are working with some groups for collaborations, what I call a development partnership. For example, in Kolkata and the North East region, we may partner with a group that has the local know-how, understands the landscape and can help us move faster.

BT: Given the disruptions that the pandemic caused, is it really the right time to enter a market like India?

Navin Gurnaney: The sentiment regarding India as a market is very bullish and the board is ready to invest whatever it takes. The coffee chain market in India is growing at a CAGR of 8-9 per cent. In next two years, the market will be touching $4.2 billion in coffee consumption and a good part of that happens out-of-home. We think there is great room for growth here. In fact, we were planning to enter the Indian market a couple of years back but the COVID pandemic delayed it. Market activity, however, is back in full swing now. 

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BT: But many established coffee chain brands have suffered huge losses and had to close stores in India in the recent past. It's easier said than done….

Navin Gurnaney: Nothing is easy. Having said that I would also like to mention that we have a great brand that is highly successful. In Canada, there are 4,300 Tim Hortons stores and we are operating there since 1964. While the nearest competitor has only 1,100 stores. In the last few years, it has opened in China, the UK, Spain, Thailand, Philippines. We already have stores in GCC (Gulf Cooperation Council) countries and are now opening in India for which we are in talks with a couple of other markets as well.

We have done our homework and this is the right time to venture into India. There is room for another brand that can offer a premium experience that offers great coffee in an approachable and friendly environment. We not only offer 100 per cent premium Arabica beans but also freshly prepared food.

BT: What kind of locations you are targeting initially?

Navin Gurnaney: Initially we would be in malls and high streets. But very soon, say within months, we will start opening in highway locations. We are already in talks with some offices. We want to be wherever our customers are. Further, we will have different format stores - in malls or high streets, it could be a premium looking store while at an airport we may have a kiosk or a small functional store in an office building.