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OUR INITIATIVES: SUPPLY CHAIN arrow View Our Performance

Our Supply Chain

icon truckOur supply chain is made up of a wide network of suppliers, some of whom provide us with goods that ultimately end up in our restaurants, while others provide us with goods or services that help us in our day-to-day business operations. We work closely with many suppliers that provide the raw ingredients used to make our products, such as wheat, oil and sugar. For a high-level overview of our supply chain, please see the Value Chain section of this report.

We manage our supply chain by working closely with our suppliers. For example, every two years, we host a Supplier Symposium where best practices are shared amongst our supplier base. In 2014, for the third year, we evaluated our food, beverage, packaging and equipment suppliers, which included their sustainability practices, goals, and innovation.

In 2014, we made progress on a number of initiatives aimed at improving our responsible sourcing practices. These efforts include our Business Partner and Supplier Code of Conduct, commitment to animal welfare and work to date to support the production of sustainable palm oil.

We also partnered with the World Wildlife Fund (WWF-US and WWF-Canada) on a broader commodity sourcing and risk prioritization analysis. The analysis identified priorities based on supply chain mapping we conducted on key commodities that could contribute to environmental impacts, such as deforestation and GHG emissions. This analysis was designed to help us identify key areas to refine and grow Tim Hortons responsible sourcing efforts. The results of the analysis will be considered as we develop our next sustainability strategy.

Did you know?

All of the milk and cream we source for Tim Hortons restaurants across Canada originates on Canadian dairy farms. Dairy Farmers of Canada (DFC) is the national organization representing Canada’s dairy farmers. One of the priorities of DFC is proAction®, which is a national framework to allow Canadian dairy farmers to demonstrate responsible stewardship of their animals and the environment. Through the DFC’s proAction® program, Canadian dairy farmers are making progress:  

  • Over 70% of dairy farmers in Canada have developed an environmental farm plan.
  • Over 96% of dairy farms are registered and comply with the on-farm food safety program called Canadian Quality Milk. daily farming
  • In 2009, the Code of Practice for the Care and Handling of Dairy Cattle was developed through collaboration with the National Farm Animal Care Council, dairy farmers, industry representatives, veterinarians, animal care researchers, government and the Canadian Federation of Humane Societies.
  • In 2014, DFC advanced the development of an assessment program for the Code of Practice. DFC developed training material and tools, did on-farm testing, and will bring the assessment program to all farms in 2015.
  • In 2014, close to 1000 Canadian dairy farmers, in cooperation with Canadian milk transport companies and milk processors, donated approximately 2,500,000 litres of fluid milk to food banks across Canada.

To learn more about the proAction® program visit the DFC: http://www.dairyfarmers.ca/proAction

Business Partner and Supplier Code of Conduct

Our business partner & supplier: code of conducr We are committed to responsible supply chain practices across our business. Our Business Partner and Supplier Code of Conduct (BPSCC) is built on the principles of respect, fairness and business ethics, with regulatory compliance being a minimum standard of doing business with us. Our BPSCC is based on internationally accepted labour standards, including the International Labour Organization’s (ILO’s) core conventions and the United Nations’ Universal Declaration of Human Rights. Key areas of focus in the BPSCC include compliance with applicable laws and regulations, conditions of employment, workplace environment, and business ethics.

Compliance with our BPSCC is required by all our business partners and suppliers(1). Failure to comply with our BPSCC is sufficient cause for us to elect to remove a business partner’s or supplier’s approved status.

We began the wide-scale implementation of our BPSCC in 2010, placing our initial focus on the food, equipment and packaging business partners and suppliers that we felt represented the largest risk to our business. Our implementation plan took a phased and risk-based approach using a cross-functional team of individuals from Sustainability and Responsibility, Strategic Sourcing, Internal Audit and Quality Assurance. We assessed supplier risk across our organization focusing first on those suppliers that provide us with products that ultimately end up in our restaurants (e.g., food, packaging, equipment, etc.). All new Tim Hortons business partners and suppliers who meet our risk threshold are required to sign our BPSCC.

(1) We consider “suppliers” as organizations that provide Tim Hortons with goods and/or services. Our “business partners” are organizations with whom we have a unique business relationship. This may include entities such as retail businesses, non-governmental organizations and charities that may or may not supply goods and/or services.

Coffee Sourcing and Verification

About the Coffee Supply Chain

We have been sourcing our coffee from the same regions in Central and South America since our company was founded in 1964. The majority of the coffee we purchase comes from “small holder” farms that tend to be family-run with less than five hectares of land. In these regions, the methods used to grow and process coffee are unique and the chain of custody to get the coffee to market is very complex. In some cases, coffee can be traded along its supply chain several times among the producers and processors, resulting in numerous transactions and changes in the custody of the coffee.

The figure below illustrates six key levels in the coffee supply chain that are very important to better understand the verification process: Farmers, Organization, Intermediary, Exporter, Importer, and Roaster.

Infographic six key levels in the supply coffee chainFarmers and producers can range from individual “small holders” (that can hold less than five hectares of land) to large private estates (50 hectares or more).

Farmers can organize themselves into formal organizations, associations or cooperatives.

An intermediary is a trader or “middleman” operating at origin that provides farmers services and assistance in getting their coffee to market. Intermediaries range from professional organizations to independent traders.

Exporters are organizations operating at origin that process and commercialize coffee from farm gate level to meet the needs/specification of international buyers.

Importers are global merchants who bring goods and commodities from the origin country to the place of sale and exchange. Coffee is imported prior to roasting – as “green coffee.”

The roasting process tends to take place close to where the coffee will be consumed. This reduces the time that roasted coffee spends in distribution, helping to maximize its shelf life. The vast majority of coffee around the world is roasted commercially on a large scale. Tim Hortons has two roasting plants, one in Hamilton, Ontario, and another in Rochester, New York. We also use other third party companies who roast on our behalf.

Our BPSCC Applied to Coffee Suppliers

Our coffee suppliers are considered key suppliers and are included within the scope of our BPSCC, and verification of compliance with our BPSCC is of particular importance in the coffee supply chain.

Since 2011, in conjunction with Control Union Certifications (Control Union), a third party certification company, we have been working on a BPSCC verification program specific to coffee sourcing. Our verification tool facilitates a detailed review of 14 key areas of focus.

These areas include:

  • Remuneration;
  • Working hours;
  • Child labour;
  • Forced labour;
  • Discrimination and human rights;
  • Business ethics (including bribery and corruption, conflicts of interest, and internal codes of conduct);
  • Working conditions;
  • Health and occupational safety;
  • Discipline;
  • Association;
  • Product quality;
  • Traceability;
  • Environmental practices; and
  • Verifications/certifications.

To date, Control Union has performed inspections and reviews down to the dry mill level at eight of our export suppliers in Brazil, Colombia and Guatemala and was given open access to the facilities and relevant documentation. Interviews with employees at every level in the organization were also conducted.

Overall, our prior independent verification work revealed compliance with our BPSCC. However, In 2014 we continued to evolve our program for our coffee supply chain. With one of our key suppliers, we tested a collaborative program that integrates BPSCC compliance, best practices, education and independent verification down to the origin community level.

Animal Welfare

Animal welfare is an important issue to Tim Hortons and all of our stakeholders, including our Restaurant Owners, suppliers, and guests. We consider animal welfare to apply to all aspects of animal care of the farm animals within our supply chain. While some of our food products are derived from farm animals, we are not directly involved in the raising, handling, transportation or processing of these animals. We depend on various direct and indirect suppliers – from processors right down to producers, many of which are family-run farms.

Our Animal Welfare Policy is aligned with our company values and Sustainability and Responsibility Guiding Principles, and sets internal standards in key areas such as regulatory compliance, quality assurance and auditing, continuous improvement and reporting.

Throughout 2014, we engaged with our suppliers, government and industry groups to further understand the latest animal welfare science-based research and best practices. We toured farms, in both Canada and the United States, participated in industry meetings and roundtable discussions.

icon chickenOur partnership with the University of Guelph, through the establishment of the Tim Hortons Sustainable Food Management Fund (started in 2012), continued in 2014. Currently, University of Guelph researchers are investigating the costs of making transitions to alternative hen and sow housing systems, and the viability and timeline of implementation. Traceability of these alternative value chains has already emerged as a major challenge to the industry. The researchers are also conducting consumer research on perceptions of animal welfare and sustainability attributes in a hospitality setting.

We also made progress toward sourcing eggs from producers who use alternative hen housing systems. In 2014, we sourced over 12% of our eggs from producers who meet these requirements.

Palm Oil

Icon Palm oilCurrently, there are global concerns regarding environmental issues related to the production of palm oil. While palm oil purchased is used in only some of our baked goods products, we are committed to doing our part to protect against deforestation and land conversion arising from palm oil production.

In 2014, we committed to deforestation-free, peat-free palm oil sourcing, and protecting both High Conservation Value/High Carbon Stock forests. Our BPSCC was updated to reflect this commitment in 2015.

Our palm oil suppliers are members of the Roundtable on Sustainable Palm Oil (RSPO), and in 2014, we joined the RSPO to demonstrate our commitment. 100% of the palm oil we booked for 2015 will support the production of RSPO certified sustainable palm oil through the purchase of GreenPalm certificates.

In 2014, we also mapped our supply chain for the palm oil we source in collaboration with our product manufacturers, suppliers and other partners as a first step in the development of a comprehensive palm oil sourcing policy. The policy will be finalized and released before the end of September 2015. This timeline reflects the work that is needed to align the policy with the next phase of our sustainability strategy, which involves a broader review of our responsible sourcing practices.

Our work to date is an important first step in supporting the sustainable production of palm oil, and more work remains to be done in order to reach our goal. We are committed to continuing to work with our product manufacturers, key commodity suppliers, and NGOs to examine and advance our palm oil sourcing practices with an aim to achieve meaningful and positive impact for the environment and communities. Updates on progress will be shared through our annual Sustainability & Responsibility Report.