Chin Up in the Downswing

positive economic news during recession

Canada Brands Are Up

June 12, 2009 07:30 PM
by Anne Szustek
Iconic Canadian brands have held strong during the recession, seeing expansion into America and partnership with U.S. companies. Part of the key to their success is making consumers relate to their brands.

Business is Sweet Across the “Timbit Nation”

Patricia Best, business writer for Canadian paper The Globe and Mail, uses a May 2007 blog post on the paper’s Web site to correct a factual error in a Wall Street Journal article on Canadian doughnut chain Tim Hortons. The WSJ had written that the store’s namesake Hall of Fame hockey player founder had once played for the Montreal Canadiens. “Not so,” she writes. “Tim Horton played for the “Toronto Maple Leafs before moving on to the New York Rangers, Pittsburgh Penguins and finally the Buffalo Sabres.” The bottom line: in Canada, don’t mess with hockey or Tim Hortons.

Among our neighbors to the north, Tim Hortons, or Timmy H’s as often called, transcends a mere morning sugar boost. It’s a national icon, giving way to the phrase “Timbit Nation,” a reference to the chain’s brand of doughnut holes. Canadian actor-comedian Colin Mochrie told CBS News that the chain is “the best of all Canadian worlds. It's named after a hockey player. You get donuts, you get a coffee, and the help is very polite.”
Tim Hortons is essentially entrenched in the culture of Canada, the world’s largest consumer of doughnuts per capita. And this steadfastness has translated into big sales for the chain. Tim Hortons pulled in more than $2 billion last year. The company also is tasting stateside sweetness. The chain has more than 500 U.S. locations, 38 of which are co-branded with Scottsdale, Ariz.-based ice cream parlor Cold Stone Creamery. Further enriching said cross-border ties, the two companies announced yesterday that they are expanding this concept to six Canadian locations as part of its plan to create 100 co-branded locations from existing stores in the chains.

Molson Says “Youppi” About Profits

Speaking of things related to hockey, the family behind Montreal-based beer maker Molson has announced a bid to buy hometown National Hockey League franchise Montreal Canadiens, as well as its stadium, the Bell Centre, and the Gillett Entertainment Group, named for the team’s current owner, George Gillett.

Molson Coors, the parent company of the Canadian beer and already 20 percent owner of the hockey team, has been scoring financially lately. The company posted an increase of more than 100 percent in net profits during the first quarter of 2009 to C$75.7 million ($68.9 million) and bumped up its stock dividend. And if the investment outlook given by Market Intelligence Center holds up, its success is poised to last. “Technical indicators for the stock are Bullish,” writes the investment news site, and Standard & Poors gave Molson Coors stock a “buy” rating of four out of five. That should merit at least a few “Youppis”—French for “hooray” and the name of the Canadiens’ mascot.

U.S. Beer Exec: “People don’t feel like a snob when they are drinking a Canadian beer”

Across the board, U.S. beer sales have remained buoyant during the recession, as they offer a cheaper alternative to cocktails when going out. Canadian beer maker Labatt, owned by Anheuser Busch-InBev and one of Molson’s chief competitors, is poised to tap into the U.S. market further by expanding its U.S. headquarters in Buffalo, N.Y. North American Breweries, the affiliate of New York-based private equity firm KPS Capital Partners that owns Labatt USA, has said that it will nearly double the staff at that office. This should help keep up public relations in the city, which accounts for some 3.3 million of the 21 million cases sold annually of Labatt’s in America.

North American Breweries’ CEO Richard Lozyniak attributes Labatt’s U.S. success to its accessible image. “Especially in the Great Lakes states, people can relate to Labatt,” he told Business First of Buffalo. Lozyniak said. “People don’t feel like a snob when they are drinking a Canadian beer.”

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