Freshly brewed coffee at a much cheaper price. KFC will be selling premium coffee this year in some 2,500 stores in China in a bid to become a cheaper alternative to Starbucks.

KFC believes its ambition to become the next big thing in coffee may be achieved by offering low-priced, quality coffee to Chinese people on the go.The company had begun serving its premium coffee in selected markets last December and said they were happy with its outcome. 

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Yum! Brands, owner of the KFC Franchise, through its chief financial officer Pat Grismer, said the premium coffee helped increase sales of KFC's breakfast and afternoon menu.  Now, Grismer wants to take advantage of China's growing demand for coffee.

There are about 4,500 KFC stores in China, leaving the company more room to expand its offering. Starbucks only has 1,500 outlets in China.

Reports revealed KFC's premium coffee will be priced at about 10 renminbi or USD$1.60. Grismer did not confirm this, but KFC's coffee products will generally cost half the price of a Starbucks cup.

While Starbucks attracts the upper class and KFC is for the average customer, this move by the fast food giant is seen to affect Starbucks' expansion plans in China.

The latest KFC coffee offering is just one of the many plans of Yum Brands as it struggles sagging sales in China, primarily due to food safety scandals.

"Our top priority is to recover sales in China and capture the significant profit leverage we have in this business. While the sales recovery in China continues to be slower than expected, we anticipate a strong second half of 2015,"  Yum Chief Executive Greg Creed said earlier this year. 

Yum also plans to open 700 new stores  in China this year.

TagsKFC, Starbucks, coffee, Yum! Brands