Canada: Coffee is the newest battleground for fast food giants

By Steve Mertl

There’s some irony in news that McDonald’s and Tim Hortons are jumping into the high-end coffee business.

Starbucks, the omni-present purveyor of lattes and espressos was probably most responsible for raising the bar on what constitutes good coffee. But with a Starbucks practically on every corner, it’s become the McDonald’s of coffee in some people’s minds, a mega corporation whose core product is getting mediocre reviews.

But what a lot of us aren’t prepared to admit is the Seattle-based company changed the way we view our daily jolt. The evidence is in the fact two of Canada’s biggest fast-food chains are moving into what the Toronto Star notes is a a $1-billion annual market.

Tim Hortons, home of the double-double, has announced it will install espresso machines in a thousand of its locations this month.

McDonald’s which had already upgraded its brewed coffee and bolstered it with free promotions, launched a national media campaign for its McCafe espresso brand.

“This is no longer fast food. ” McDonald’s Canada president John Betts told the Star this week. “This is great food served fast.”

Tim’s, the country’s biggest fast-food chain, expects to have espresso machines in 2,500 of its 3,000 locations by mid-December. McDonalds is installing the McCafe setup in its 1,400 Canadian locations as part of a billion-dollar makeover.

Both plan to undercut Starbucks, with Tim’s offering 10-ounce espresso-based drinks starting at $2, while McDonald’s will charge $2.29, compared with $3.52 at Starbucks.

McDonald’s is backing its effort with a major ad campaign that includes coupons for a free espresso mailed to almost every Canadian home.

The key to the expansion of espresso drinks has been the evolution in the way they’re made. Espresso was once limited to exotic little coffee bars and Italian restaurants, prepared with big, shiny machines that hissed steam.

Starbucks popularized espresso drinks and their baristas manually made lattes and cappuccinos to order, even if the espresso itself was no longer hand-pressed. But new espresso machines are largely automated in preparing all drinks, making them viable for fast food restaurants.

The brewed-coffee landscape is also changing. Wendy’s is introducing a new custom-roast, freshly ground brew at about 100 Canadian locations, the Globe and Mail reports.

In fact, a Globe blind taste test by a panel of coffee experts ranked Wendy’s Redhead Roasters Coffee ahead of McDonald’s, Tim Hortons and Starbucks. The endorsement of Wendy’s coffee was half-hearted but Starbucks’ brew got roasted, so to speak, with terms such as bitter, burnt toast and charred.