Thousands of KFC restaurants in China, where the fried-chicken purveyor is the largest fast-food chain, will start selling freshly ground coffee this year in a bid to become a lower-cost “premium” alternative to Starbucks.
Coffee is going to be a big part of KFC’s future — and the ambition goes far beyond the stunt of testing an edible coffee cup. Thousands of KFC restaurants in China, where the fried-chicken purveyor is already the single largest fast-food chain, will start selling freshly ground coffee this year in a bid to become a lower-cost “premium” alternative to Starbucks.
Trying to beat Starbucks on higher-quality coffee in China makes more sense than it might seem for KFC, which has a long-established breakfast menu. Starbucks, meanwhile, has spent the past 16 years spreading the concept of “coffee culture” and cultivating demand for high-price brews throughout China.
KFC started rolling out its new premium coffee in its most developed Chinese markets in December.
The new coffee has helped boost KFC’s breakfast and afternoon business. The company will offer premium coffee in 2,500 KFCs in China by year’s end, a footprint that already surpasses all 1,500 Starbucks locations in the country. China has about 4,500 KFC outlets, leaving more room for the chain to expand.
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KFC’s coffee would sell for half the price of a comparable cup at Starbucks.
KFC executives have drawn direct comparisons between the chain’s new coffee and the Starbucks product, making explicit the challenge to the Seattle-based coffee giant and its plan to turn China into its second-largest market by store count.
While Starbucks coffee is positioned as a more luxurious product, the entry of a large competitor such as KFC at a midrange price will complicate those expansion plans.