The quick-service restaurant group credited its KCOFFEE brand as a standout performer over the last 12 months and is planning to further grow the café concept in 2025
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Yum China reached 700 KCOFFEE locations across China at the end of 2024 | Photo credit: Wu Yi
Quick-service restaurant group Yum China has heralded coffee as a key growth driver for its KFC franchise after significantly scaling its proprietary KCOFFEE brand last year.
First launched as an in-store KFC coffee range in 2015, Shanghai-based Yum China span-off the KCOFFEE brand as a standalone coffee shop concept in 2022.
In commentary accompanying its full-year group results, Yum China said it reached 700 KCOFFEE locations across China by the end of 2024. The KCOFFEE store network comprises stand-alone outlets and ‘side-by-side' concession coffee shops adjacent to KFC stores.
Yum China plans to scale the café concept to 1,300 locations by the end of 2025.
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The KCOFFEE brand is also sold across KFC’s 11,648 outlets in China, with Yum China reporting that the fast-food chain sold 250 million cups of KCOFFEE in 2024 alone – 30% year-on-year volume growth.
“Coffee is a key growth driver for KFC. Our breakthrough KCOFFEE café model expanded from about 50 sites in 2023 to 700 cafés in 2024. KFC and KCOFFEE cafés generate good synergies, driving incremental sales and profit,” Yum China said.
Yum China’s full-year KFC revenues increased 3% year-on-year to $8.5bn – approximately 70% of the group’s total. The fast-food chain has a presence across 2,200 cities in China.
In an investor presentation, Yum China also reported progress for its Lavazza joint venture – formed in April 2020. The quick-service restaurant group said it is sharpening its focus on Lavazza’s ‘dual growth engines’, with packaged retail coffee sales increasing 30% year-on-year. In May 2024, Yum China reported it had signed new Lavazza wholesale deals with 5-star hotels and Michelin-starred restaurants. The Italian coffee roaster also supplies Yum China’s Pizza Hut restaurants.
Yum China said it has achieved ‘meaningfully improved store economics’ across its premium Lavazza coffee shop network – which currently comprises 112 stores.
In September 2021, Italian coffee roaster Lavazza and Yum China outlined a goal to reach 1,000 Lavazza outlets in China by 2025. Speaking to the BBC in December 2024, Lavazza Group Chairman Giuseppe Lavazza said the partnership was now seeking to reach 1,000 coffee shops by 2028.