An Analysis of Tim Horton's Corporate Social Responsibility Initiatives
Tim Hortons is a well-known brand in Canada but only a few see the company beyond coffee and fresh donuts. The company has a wide range of social initiatives that play an important role in the firm's success. Evaluating why and how Tim Hortons deploy these strategies it is greatly helpful in understanding the theories learned in class. Ultimately, this article aims to analyze “Tims” best practices of Corporate Social Responsibility and give a more practical view of this concept.
Tim Hortons has some CSR initiatives that are good examples of this approach. On the website, these campaigns are categorized into “Individual” “Communities” and “The Planet”. In order to illustrate how Tim Hortons approaches social responsibility, the programs analyzed were: Tim Horton Children’s Foundation, Tim Hortons Coffee Partnership, and the Environmental Stewardship. I intended to identify the social need that the company foster to meet and the major business impacts that these programs provide.
Tim Horton Children’s Foundation
The Foundation was created in 1974 in memory of the company founder Tim Horton. The main goal of the institution is to keep alive Horton’s desire for helping others. Tim Horton Children’s Foundation provides camps experience to economically disadvantaged youth. With three different programs operating year-round, the Foundation aims to change young people's mentality and empower them to act towards their goals (Our Initiatives: Children, n.d.).
The major social need that the company address with this program is the common concern about the future of our society which doesn't give the same opportunities to all. “Across Canada and the United States, 1 in 6 children live in economically disadvantaged homes. For these children, opportunities and surroundings that promote growth into healthy individuals are often limited” (Miratel Solutions Inc., 2012, para. 7).
Tim Hortons meet this need by giving mental support to youth and children while educating and empowering them to think and act in a more optimistic way. The company helps these kids and teens to see a new perspective of a world where they can create their own opportunities and have a successful future. These actions are reflected in numbers. According to the Performance Report (2014), Tim Hortons impacted 17,700 children’s lives with the Foundation. Besides, with the support of restaurant owners and guests the company raised $11.8 million for the Children’s Foundation, only in 2014. Thus, Tim Hortons can keep support the economically disadvantaged youth and contribute to a better future for the whole society (Tim Hortons, 2014).
Finally, the Foundation is one of the CSR activities most promoted by the company. On the website, on social media, on the packaging, or at restaurants, it is common to see references to the program. The Foundation supports an extremely emotional issue that most people are willing to help. With this action, the company is “giving back and engaging their customer base at the same time” (Miratel Solutions Inc., 2012, para. 6). Thus, I believe that above all, the main business impact of this program is related to brand awareness and goodwill. The integrated corporate social responsibility strategy, which also involves public relations, generated awareness not only for the Foundation but also for the brand as a whole.
Tim Hortons Coffee Partnership
The Coffee Partnership is a program that gives support to small coffee farmers and communities around the world. Tim Hortons help these people providing economic, social and environmental improvements in the area of the coffee is produced. The objective is to improve the community of coffee farmers and, hence see it reflected in a better coffee quality (Tim Hortons, 2014).
With the Coffee Partnership program, Tim Hortons aims to meet the need of coffee communities for a better quality of life. The people from these economically disadvantaged communities usually have no technical training about coffee production and poor work conditions that are reflected in their income. Tim Hortons give all support the farmers need to grow the coffee in a more sustainable and profitable way. This way, this initiative not only benefits the community but also the environment.
Further, the program meets the farmer's needs by supporting them with all logistic issues in order to help them reduce their costs and ensure that the coffee gets to the market at the best time and at the best price (Tim Hortons, 2014). Education plays a big role in this initiative because it is the main tool used to improve the communities' lives.
Finally, all these actions can be reflected in numbers. Only in 2014, Tim Hortons helped 4,830 farmers around the world by providing over 20,000 technical training demonstrations. Besides, thanks to the program more than 14,000 hectares of land were managed in an environmentally friendly manner (Tim Hortons, 2014).
Through this initiative, Tim Hortons creates goodwill encompassing communities around the world. Besides improving farmers' lives, the program also contributes to the coffee economy once it helps them to produce better beans with lower cost and environmental impact.
Tim Hortons aligned two important objectives in the same strategy: improving the quality and cost of its main raw material while providing coffee communities a better way of living. “So, long term, it is in everyone's best interest that these small coffee farmers be successful and want to stay on the farm” (Moore, 2011, para 6). The 80% increase in yield/hectare of coffee production is beneficial for both communities and the firm (Tim Hortons, 2014).
The financial outcomes of this initiative may not have a huge impact in a short-term perspective, but it will surely offer a long-term fiscal advantage, as most CSR strategies (Chin-Huang L. et al., 2009). This initiative also increases employees' morale and commitment because the farmers will be grateful and happy to be part of a company that is truly concerned with their development.
Another business impact of Coffee Partnership is that it helped to improve “education of consumers on sustainable coffee and expansion of sourcing opportunities through grassroots relationship development” ("Driving Profits", 2012, p. 7). Finally, this type of CSR practice is likely to enhance the shareholder and stakeholder value of the firm ("Driving Profits", 2012).
Tim Hortons also has a series of environmental initiatives that show the company’s commitment to sustainable management. This commitment is reflected in different ways within the organization. The “Environmental Stewardship” is a set of “green” programs managed by Tim Hortons to improve the environmental impact of its activities.
For example, eco-friendly packing design, waste reduction at the restaurants, green building design, fuel efficiency improvement, etc. The company applies a set of environmentally friendly standards throughout the whole supply chain (Our Initiatives: Environmental Stewardship, n.d.).
The set of environmentally responsible practices that Tim Hortons executes meet the social need that represents a general concern: the preservation of the environment. Natural resources are limited and if society keeps only increasingly consuming and generating trash, the planet will be uninhabitable soon.
This is an extremely urgent social issue that only the union of all nations can fight against. Therefore, big corporations such as Tim Hortons see themselves with the responsibility of supporting individuals to act towards a more sustainable world.
Once these companies take a lot of the natural resources and generate tons of garbage, they also should be the ones that give back the most. Through its Environmental Stewardship, Tim Hortons embraces sustainable management initiatives that aim to decrease the environmental impact of the company’s supply chain activities while improving the natural contexts around its corporate operations.
The environmentally responsible practices go from the exploration of natural resources, at the beginning of the supply chain, to the green architecture of the restaurants.
Finally, through its Environmental Stewardship initiatives, Tim Hortons impacted its environmental impact with a reduction of 35% in water consumption at the corporate offices. Besides, the distribution fleet has increased fuel efficiency by 12.5% since 2008 and increase 11% on waste diversion rate from 2012 (Tim Hortons, 2014).
The “green” approach is one of the most popular CSR strategies deployed by big companies nowadays. This happens due to the dimension and urgency of the issue which involves a common concern among society. Surely, the Environmental Stewardship that Tim Horton manages is a great marketing tool to create value with the target.
However, it also provides good financial results that impact the firm’s performance. Striving to decrease the environmental impact of its corporate activities, Tim Hortons sees more than awareness in return. For example, by implementing energy-saving measures in Ontario, the firm achieved approximately four million kilowatt-hours in energy savings province-wide (Tim Hortons, 2014). Moreover, by improving fuel efficiency, Tim Hortons not only saves the planet but also money! Overall, optimized operational effectiveness is one of the best benefits that the business gets from this strategy.
In general, I have no doubt that social responsibility initiatives are the best choice from a social management perspective. The approach of business with a social obligation mentality is not enough to compete in the marketplace today. I believe that CSR will dominate the socially responsible management activities above social responsiveness which still greatly superficial and has low appreciation by customers.
This is a very important consideration since it is known that people vote for a business with their wallet. Thus, if customers share values and beliefs with a company, they are more likely to buy from it. In fact, customers are willing to pay more for firms that have social responsibility programs (Marketing Charts, 2015).
When customers go to Tim Hortons store, they buy more than just coffee and donuts, they know that part of their money is going to help the world somehow and that's often one of the reasons they choose Tims instead of other competitors.
Although there is a natural friction between corporate social responsibility initiatives and profit, in a long-term perspective, building a socially responsible reputation is worthwhile for any kind of organization and it can potentially become a strong form of competitive advantage. Further, some studies even identified the positive relationship between CSR and financial performance (Chin-Huang L. et al., 2009).
Ultimately, what it's clear after this case study is that what Tim Hortons cleverly strives to do through all its CSR initiatives is to create a strong share of heart with its target market. Then, market share and wallet share will come easily. Finally, it is important to stress that truly responsible companies like Tim Hortons keep their profitability but also make sure to give back to the environment from which they draw their profits (Rowlands, n.d.).
Written by Bianca Gurgel.