Has Tim Hortons given up on sustainability?

"Making a True Difference" has been Tim Hortons' slogan animating its social responsibility and sustainability initiatives over the past few years. But since they were acquired late last year by Brazilian private equity outfit 3G Capital, the owners of the fast food chain Burger King, the true difference seems to be that sustainability is suddenly in rapid decline at the iconic Canadian coffee chain. The new owners, promising to cut costs and improve performance, have effectively closed down the company's sustainability department.

The change has been pretty dramatic. Just last year, the then CEO of the company was saying that their "overall vision for sustainability is to be a leader in the North American quick service restaurant sector and across all sectors in Canada". Already well-known for their community initiatives, the company  had upped its game over recent years in a number of key areas including sustainable sourcing, recycling, energy and water efficiency, animal welfare, nutrition, and disclosure and reporting. As a result it had made it into the Dow Jones Sustainability Index, Corporate Knights magazine's Global 100, the Carbon Disclosure Project's Leadership Index and various other best-of sustainability lists and rankings. The company was far from perfect, but it was clearly making progress.

Since the turn of the year, however, a lot has changed. The new owners have instituted swingeing cuts in personnel in order to institute "efficiencies", just as they did at Burger King a few years ago. As is so often the case, sustainability and responsibility has been one of the first areas to feel the heat. In addition to jettisoning the dedicated sustainability team, the company appears to have also cut the budget for various corporate responsibility initiatives. There's not much sign of a company aiming to be a sustainability leader any longer. Not unless you think Burger King is a leader that is.

So what to make of the changes? The are at least two things worth noting.

First, it seems like the new owners are convinced a lot of Tim Horton's sustainability initiatives were simply not adding value to the company - or at least not to the share price. This is always a major issue for sustainability champions to address, but is typically tricky to prove either way. Still, the swift move to cut the whole department hardly suggests a careful financial evaluation from the new owners either. 3G Capital seem to be operating on gut instinct (or maybe just ideology) much more than evidence when it comes to the financial value of sustainability.

Second, the quick serve market is increasingly being bifurcated into higher end 'gourmet' brands like Chipotle or Starbucks that see sustainability as part of their superior quality proposition to customers and lower end brands like Burger King or KFC that focus more on price and so seek to minimize the costs of sustainability. The new owners probably saw Tim Hortons as somewhat stuck in the middle (much like McDonald's have become), and have elected to head down the low-end route in order to maintain their strategic focus. This certainly makes some sense from the perspective of competitive strategy, and could see the company pulling back from a lot more than just sustainability as it reins in its costs across its operations. If so, we can expect to see simpler menus and a back to basics approach after a recent period of experimentation with higher end fare. However, if this is the way they want to go, you would expect to see more, not less, attention to the costs savings that sustainability initiatives can bring through more efficient resource utilization. As Wal-Mart has shown, sustainability can also very much be part of a low cost strategy.

All told, things don't look for good for sustainability at Tim Hortons. Although some firms can manage sustainability well with just one or two core staff by integrating responsibilities within other parts of the business, Tim Hortons seems to be more intent on stripping it down as far as possible as part of a broader strategic reorientation.  However, there is at least a slither of good news for sustainability enthusiasts in all this. As part of the cutbacks, the new owners have also put the company's private jet up for sale.

Photo by Jeff M For Short. Reproduced under Creative Commons Licence

Lunch at IKEA

Copyright Kai Hendry

Shopping on an empty stomach is not fun. Especially if its shopping for something a little more sophisticated, such as furniture. No wonder than IKEA, the Swedish budget furniture chain, runs restaurants in all its locations. I had a chance to check one out last Saturday. Well, that is, in the end I didn’t.

Copyright Kai Hendry

I have never eaten at IKEA but as my 11-month old baby daughter needed her food anyway, and we were just about to enter the store, we thought we might as well check it out. Nothing had prepared us though for what was going on there. There were two massive lines the size of a check in line for a intercontinental flight and I would estimate that there were at least 500 people in the restaurant. Families with kids, grandmother and dog were queuing up next to young couples or groups of teenagers, old single men as well as people in wheelchairs. It was an amazing mix.

Copyright rayb777

Given the size of the lines and the prospective waiting time we quickly folded the idea of lunch and just fed the baby with what we had with us. The IKEA lunch line though was an exciting spectacle to watch for a few minutes. The food looked actually quite good, though it was rather simple. Meat-and-two-veg seemed to be the general structure. And generous portions. It was cheap: none of the items is more than $7.99 with the legendary Meatball staple at $5.99. It also looked relatively healthy. Only two of the seven main dishes on offer contained fries or deep fried stuff; most had vegetables or salad as sides; and the pasta and crepes were even organic! No junk food this.

It is kind of funny when sitting in the restaurant of a multinational chain you suddenly get the feeling of being more in a public institution – the place looked like the hospital or school canteens of my youth or the university ‘mensa’ of my student days. The entire place had more something of an institutional air around it rather than a ‘restaurant’. Underlined by the demographics of the dining public this appeared more like a social institution than a privately run for-profit restaurant. It even reminded me a little bit of a public soup kitchen or red cross food outlets which I saw when visiting refugee camps in the aftermath of the Yugoslavian wars in the mid 1990s.

Now the peculiar thing here is that all this was not only provided by an otherwise known as a ruthless, efficient and profit driven multinational corporation. Even more, it was just because IKEA has this ultimate modern perfection of a Fordist business model with globally standardized sourcing, products, and processes that the company is able to offer this affordable food supply. I was reminded of investigations in the mid 2000s in Germany which found that IKEA had become the food supplier of choice for people on welfare and low incomes. At the time, the company already made 10% of its revenue in Germany just by food!

Matten jr. enjoyed herself at IKEA

It leaves one wondering about the status and nature of global capitalism. In some ways, IKEA represents this approach like few others. Some scholars have argued that IKEA though, shaped by the social-democratic climate of his home country Sweden represents a somewhat softer or human form of a global corporation. But just skimming the IKEA page on Wikipedia shows that the company is anything but a saint. I well remember that, when the wall came down in 1989 in Germany, some former dissidents had a funny déjà-vu when visiting their relatives in the West for the first time: they could recognize some of their friends’ IKEA furniture as items they had to assemble while being imprisoned by the regime in Eastern Germany which supplied IKEA with some of their phenomenally cheap products...

For me, the company just represents, first of all, the ascent and the degree to which private corporations shape the public and private sphere of ordinary people these days. After all, one out of ten Europeans these days is said to having been conceived in an IKEA bed. It also shows, secondly, that at least from a consumer perspective in the Global North a multinational such as IKEA contributes significantly to enhancing the standard of living and providing affordable access to basic necessities of life. But most of all, it raises some growing and unresolved questions about the status of the social sphere in a world where markets and capitalism seem to colonize every last corner of our lives. No student at my current university has access to cheap food at IKEA prices; and many of the ‘common’ folks I saw last Saturday at IKEA certainly know that taking the family out for a meal anywhere else would probably be beyond their budget. The last time I saw a meal service in a Toronto hospital it was just outright revolting junk served in a public institution. But why is it only a ruthless, self-interested multinational which provides a better alternative at that level today?

I have not doubts about the motivations of IKEA in running such a restaurant operation. I am just puzzled by the fact that the result resembles so much what traditionally looked like the public provision of these goods. This said, I am not even sure if I want to add: this should still be available for common folks, be it in schools, universities, hospitals or even worker’s canteens in companies. But I also know why IKEA can and these other players cannot provide this any more...

DM

Top three fotos reproduced under the Creative Commons License