KFC China moves into ‘premium’ coffee
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t’s a hard concept to grasp: ‘quality coffee’ at a fried chicken chain.
But KFC China is reportedly planning a serious move into the ‘premium’ coffee market, aiming to become a low cost alternative to Starbucks.
Yum! Brands-owned KFC is the leading fast food player in China already and Starbucks has built a strong and loyal following in the market after 16 years there.
According to a report on Bloomberg News, KFC China will start selling freshly ground hot coffee this year.
The new coffee offer made its debut in several restaurants in December and the company is “very pleased with the results” according to CFO Pat Grismer, commending at an investors conference last week.
So by the end of 2015, KFC China will add ‘premium’ coffee to 2500 outlets – 1000 more than the size of Starbucks’ network. It’s following in the footsteps of McDonald’s, which has McCafes at most of its 2000 Chinese outlets.
“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 featuring such local fare as congee,” Bloomberg observed.
A premium coffee is priced at about 10 RMB (US$1.60) which is about half the price of a like cup at Starbucks.
While it is not clear quite the range of coffee styles on offer, it is unlikely to be as broad as Starbucks, which is also gaining favour in Asia for its range of teas.
“While Starbucks coffee is positioned as a more luxurious product, the entry of a large competitor such as KFC at a midrange price will certainly complicate those expansion plans in a country where tea is far more popular,” observed Bloomberg.
Questions & Answers
Q.Which other fast food chain has already introduced a coffee offering in China?
Which other fast food chain has already introduced a coffee offering in China?
McDonald's has already introduced coffee, with McCafes present in most of its 2,000 outlets across China. KFC China is following in its footsteps by expanding into the coffee market.
Q.How does KFC's new coffee offering compare in price to Starbucks' products?
How does KFC's new coffee offering compare in price to Starbucks' products?
A premium coffee from KFC is priced at approximately 10 RMB, which is about US$1.60. This is roughly half the price of a comparable cup sold at Starbucks in China.
Q.By the end of this year, how many KFC China outlets will be selling premium coffee?
By the end of this year, how many KFC China outlets will be selling premium coffee?
By the end of 2015, KFC China plans to add premium coffee to 2,500 of its outlets. This number will be 1,000 more than Starbucks' current network size in the country.
Q.When did KFC China first introduce their new coffee offering in some restaurants?
When did KFC China first introduce their new coffee offering in some restaurants?
The new coffee offering made its initial debut in several KFC China restaurants during December. The company has since expressed satisfaction with the results of this early introduction.