KFC rivals Starbucks in China

Coffee is going to be big part of KFC's future - and the ambition goes far beyond the stunt of testing an edible coffee cup. Thousands of KFC restaurants in China, where the fried chicken purveyor is already the single largest fast-food chain, will start selling freshly ground coffee this year in a bid to become a lower-cost "premium" alternative to Starbucks.

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 - a rice porridge with pickles and preserved egg. Starbucks, meanwhile, has spent the past 16 years spreading the concept of "coffee culture" and cultivating demand for high-price brews throughout China.

KFC started rolling out its new premium coffee in its most developed Chinese markets in December. "And we were very pleased with the results," said Pat Grismer, chief financial officer at Yum Brands, KFC's parent.