Expanding the branded coffee footprint
Foodtastic is making a public move to acquire competitor MTY Food Group to secure a larger slice of the branded coffee shop market in Canada. The Montreal-based franchisor currently operates 1,200 outlets across 25 quick-serve brands, which includes the 158-store Second Cup Cafe. I see this bid as a direct way to challenge the dominance of Tim Hortons, McCafe, and Starbucks. A successful bid for MTY Food Group would allow the Montreal-based franchisor to control two of the country’s largest coffee chains. This follows a recent licensing agreement to relaunch the US coffee giant Dunkin’ in the Canadian market. I find that Foodtastic, which currently manages 1,200 outlets across 25 quick-serve brands in Canada including the 158-store Second Cup Cafe, aims to challenge the market dominance of Tim Hortons, McCafe, and Starbucks through its bid for MTY Food Group.
Kraft Heinz exits coffee market
Kraft Heinz is looking to offload the Maxwell House and Tassimo coffee brands in a $650m divestment. The US food and beverage giant seeks to recover from a $4.7bn loss reported last year. I see this as a strategic way to prioritize investments in high-growth consumer goods categories. For Kraft Heinz, coffee is no longer one of those high-growth consumer goods categories. I find the decision to sell Maxwell House and Tassimo for $650m is a way to focus on more profitable food brands. The company intends to prioritize investments in high-growth consumer goods categories as it seeks to recover from that $4.7bn loss.
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