The fast-food chain has launched a dedicated coffee shop format catering to growing demand for value and efficiency among China’s affluent younger coffee consumers
Yum Brands, which operates KFC in China, sold 170 million cups of coffee in 2021 | Photo credit: CC BY-SA 4.0
KFC has launched its first dedicated coffee outlet in Shanghai, a To-Go store catering to growing demand for premium and speciality coffee in China.
The concept, which serves single origin coffee from Guatemala, is positioned to compete with other premium value-focused coffee chains, including Luckin Coffee and McCafé, with an espresso-based beverage costing RMB 9 ($1.26).
World Coffee Portal data shows the average cost of a latte among China’s top five coffee chains was RMB 19.24 ($3.04) in 2021. However, rising costs led major coffee chains, including Starbucks, Luckin Coffee and Tim Hortons to raise beverage prices by RMB 1-5 ($0.16-$0.47) in February 2022.
KFC, which is operated in China by Yum Brands, began selling freshly ground coffee across its Chinese stores in 2016. The company reportedly sold 170 million cups of coffee in 2021.
Consumer demand for convenient, premium coffee across China led McDonald’s to target 1,000 new McCafé locations in China
by the end of 2023. Meanwhile, ecommerce-focused coffee chain, Luckin Coffee now operates more than 7,100 outlets across the country.