Introduction:KFC has been actively expanding its freshly brewed coffee business across China since 2015, focusing on an affordable price range of 10 to 20 yuan and using 100% Arabica beans. The brand aims to expand this offering to at least 2,500 stores by the end of the year. This article takes an in-depth look at the pace of its expansion, product strategy, market differentiation compared to Starbucks and McDonald’s, as well as how store space renovations enhance the customer experience — providing valuable insights for both coffee enthusiasts and industry professionals.
Since 2015, KFC has been vigorously promoting its freshly brewed coffee business in the Chinese market, using Arabica coffee beans with individual cup prices ranging between 10 and 20 yuan, demonstrating clear pricing competitiveness. According to Yum China’s plans, by the end of that year, this coffee service was expected to be available in at least 2,500 stores nationwide — a significant increase from the initially estimated 1,000 stores — highlighting the group’s strong commitment to this business line. This move is not only a key strategy for Yum China to seek new growth opportunities in China, but also allows KFC to break through at the intersection of fast food and the coffee market.
In November 2014, KFC was the first to launch a freshly brewed coffee series in its Shanghai outlets, with Arabica beans as the main selling point and professional-grade coffee machines used for on-site extraction. Each store offering freshly brewed coffee was equipped with professional brewing equipment, and clear “COFFEE” signage was placed at the cashier area to help customers easily identify the offering. To boost purchase intent, special discount combos featuring coffee paired with items such as egg tarts and hamburgers were introduced during the afternoon tea period, successfully attracting many customers. Subsequently, in early 2015, major cities such as Beijing, Guangzhou, and Shenzhen followed suit, gradually expanding this coffee service to more consumer markets.
In fact, KFC’s exploration of the coffee market dates back to 2009, when it conducted small-scale trials of freshly brewed coffee in some stores. He Yong, Vice President of Brand Planning at KFC, stated that the team had made multiple adjustments to different types of coffee beans, equipment, and brewing techniques, and had successively launched four different series of coffee products. After conducting consumer concept testing and blind tastings, the decision was ultimately made in 2013 to focus on a freshly brewed coffee series characterized by a rich and balanced flavor — rather than products emphasizing only latte art — showcasing a deep understanding of market taste preferences.
Although the form of KFC’s freshly brewed coffee is similar to that of Starbucks, its positioning as a fast-food brand remains distinctly different from the "third place" culture emphasized by Starbucks. With an average coffee price of around 10 yuan, KFC offers a highly affordable option compared to Starbucks’ average check of about 30 yuan, appealing to value-conscious consumer segments. Moreover, unlike McDonald’s, which launched an independent coffee sub-brand called “McCafé,” KFC has chosen to gradually introduce coffee products within its existing stores while simultaneously upgrading the store image.
Starting in 2014, KFC adopted a new design concept centered around the idea of a “Dining Room.” By incorporating custom wall art, pendant downlights, greenery partitions, and long communal bars, the brand created a comfortable atmosphere reminiscent of “a restaurant in one’s home.” It is understood that by the end of 2014, over 370 stores nationwide had adopted this new design, with plans to fully roll it out to all newly opened stores in 2015, while also accelerating the renovation of older outlets to enhance the overall customer experience.
Notably, KFC’s parent company, Yum China, faced poor performance in the Chinese market in 2014 due to the impact of the Shanghai Husi expired meat scandal. During that year’s fourth quarter, revenue in the Chinese market dropped by 11%, with same-store sales declining by 16%, prompting the group to urgently seek new sources of growth. Beyond food safety issues, Chinese consumers’ dietary preferences were also gradually changing, and KFC was no longer just a trendy choice but one among many dining options. Therefore, in addition to introducing localized offerings such as Chinese-style breakfast items like congee and youtiao, as well as the Beijing-style chicken roll, the coffee market was also seen as a new area with huge potential.
Overall, through the expansion of its freshly brewed coffee business, KFC hopes not only to enhance the revenue potential of its existing stores, but also to carve out a place in the fiercely competitive coffee market by leveraging its price advantage and extensive store network. From product testing to store renovations, every step reflects its keen observation of market demand and strategic adjustments. Whether it can reverse its declining performance through these efforts will be a key focus for the industry moving forward.
The above content is compiled by CoffeeHunters, a coffee news website.
