KFC Launches $1 Coffee Push in China Against McDonald's

KFC is making a bold play for China’s booming coffee scene—not with specialty lattes or Third Wave branding, but by undercutting everyone on price. As the battle for China’s caffeine drinkers heats up, the fried chicken chain is offering brewed coffee starting at just ¥10 (around $1.40), a move clearly aimed at drawing budget-conscious consumers away from pricier rivals.

KFC’s new coffee push kicks off in January 2015, with plans to roll out fresh-brewed coffee in over 1,000 locations across at least 20 Chinese cities. That ¥10 starting price sits well below McCafé’s typical ¥20 range and Starbucks’ usual ¥30 mark, putting everyday coffee within easier reach.

Why KFC Is Jumping Into China’s Coffee Fight

China’s coffee consumption is exploding. While global coffee drinking grows at around 2% annually, China’s numbers are jumping nearly 15% a year—over seven times faster. That surge has already lured major players like Starbucks and McDonald’s, and now KFC is staking its claim with a value-driven approach.

How KFC’s Coffee Rollout Is Unfolding

KFC didn’t dive in all at once. The brand began testing coffee offerings in select Shanghai and Beijing locations back in 2009, then expanded to a broader rollout in Shanghai in November 2014. By January 2015, it had launched brewed coffee in over 300 Beijing outlets and was expanding nationally—with more than 600 KFC restaurants now serving fresh-brewed coffee.

This isn’t KFC’s first rodeo with coffee: the brand has been quietly refining its approach since those early tests. The 2015 expansion targets urban markets where demand is strongest, aiming to make coffee a daily habit for more customers.

The Competition: Who Else Is Selling Coffee in China?

KFC isn’t alone in seeing opportunity. McDonald’s launched McCafé in mainland China in 2009—ten years after its U.S. debut—and has since built a network of over 800 locations, closing in on Starbucks’ store count. McCafé positions itself slightly below premium brands on price and emphasizes trained baristas. Meanwhile, Starbucks remains the market’s premium anchor, while premium brands like Costa and niche players like Häagen-Dazs have also entered the fray.

Häagen-Dazs joined the competition in late 2014, marking a full-blown “coffee war” among major foodservice brands in China. The battle is heating up just as industry data points to huge growth potential: the China Chain Store & Franchise Association’s 2014 report showed coffee and beverages as the second-most attractive franchise sector, with nearly 80% investor interest. Forecasts suggest China’s coffee market could hit ¥300 billion ($42 billion) in retail sales by 2020.

Frequently Asked Questions

What price is KFC charging for its coffee in China in 2015?

KFC is selling its freshly brewed coffee at a starting price of ¥10 (approximately $1.40 USD) in China during 2015. This pricing is significantly lower than McCafé’s usual range of around ¥20 and Starbucks’ typical range of about ¥30.

How many KFC locations in China were serving coffee by January 2015?

By January 2015, over 600 KFC restaurants in China were offering freshly brewed coffee as part of their menu. KFC planned to expand this offering to 1,000 locations across at least 20 cities during that year.

When did McDonald’s introduce McCafé in mainland China?

McDonald’s introduced McCafé in mainland China in 2009, ten years after the concept launched in the United States. By 2015, McCafé had grown to over 800 locations in China.

What is the projected size of China’s coffee market by 2020?

By 2020, industry forecasts projected that China’s coffee market could reach ¥300 billion (approximately $42 billion USD) in retail sales, indicating strong growth potential in the sector.

Which other brands besides KFC, McDonald’s, and Starbucks are competing in China’s coffee market?

Besides KFC, McDonald’s, and Starbucks, other brands competing in China’s coffee market include Costa, Häagen-Dazs, and various local and regional players. Häagen-Dazs entered the coffee segment in late 2014, intensifying the competition.

Recommended FrontStreet Coffee for Everyday Brewing

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