China Consumer

Kentucky brew

Yum launches a tea chain


Welcome to KF-tea

What would Colonel Sanders have made of it? On June 29, a netizen on social e-commerce platform Little Red Book posted that KFC had opened a tea shop in Suzhou called Grandpa Free Tea – playing on the grandfatherly image the fast food chain has long used of its Kentucky founder Harland David Sanders.

“KFC has crossed worlds and opened a tea shop!” the post celebrated. “Let’s just say that Grandpa Free Tea lives up to expectations. The shop decor is extremely atmospheric, full of Jiangnan charm. The simple local essence reflects Jiangnan’s beautiful scenery.” Jiangnan, a fertile and historically prosperous region south of the Yangtze River, is also integrated in the store’s tagline: “The New Style of Jiangnan”. The shop – with its refashioned tea-drinking ‘colonel’ logo – is an obvious attempt at broadening KFC’s brand in China, particularly among younger consumers increasingly focused on domestically-designed product offerings and a more localised aesthetic.

KFC’s move into the tea industry has been a measured process – preceded by the launch of 10 flavoured oolong tea drinks in 2019. China’s modern ‘new-style’ tea sector has grown year by year too, fuelled by a backbone of younger fans, predominantly women. According to industry research from iiMedia, the market is predicted to reach Rmb300 billion ($44.58 billion) in sales by the end of this year, driven by massive chains such as HeyTea, Tianren, Yi Diandian, Gongcha and ShareTea.

But with such formidable rivals already in place, how will KFC’s mid-market spin-off survive the brewing competition? One thing that Little Red Book netizens have made clear is that KFC’s tea shop is offering consumers healthier but still innovative drinks. In light of the growing buzz for more health-conscious lifestyles, the shop’s menu is built on a foundation of fruit teas and “zero trans-fat” rice-milk tea.

Its “Innovative Rice Milk Tea” series carries the Jiangnan signature style of rice milk, while other drinks on offer include traditional regional flavours of orange red cake, prickly water lily, bamboo shoot and water chestnut.

Most of the drinks on Grandpa Free Tea’s menu are priced between Rmb13 to Rmb23. That price range puts the new KFC offshoot into the tea industry’s mid-market space, which is also the dominant category in the industry.

The spin-off will have to navigate some negative feedback online, however, including weibo users that have described it as the “mountain village shop”, scoffing at its brand image. “Tender, sweet, pink. How old are you?” they laughed.

Other netizens have joked that the new logo doesn’t remind them of Colonel Sanders, resembling more the much-respected Singapore-born but Hong Kong-based food critic and television host Chua Lam. Perhaps more worrying are some of the less flattering reviews of the brews themselves. “I’ve never had such bad-tasting tea,” was one assessment. “Maybe they were busy with too many orders, and so production got messy.”

All the same, the store has been getting huge volumes of publicity since opening, inviting about “half the internet’s bloggers” to visit, in the words of one weibo cynic. It remains to be seen how far the performance of this pilot outlet is going to shape the wider ambitions of Yum China – which operates KFC and Pizza Hut in China and is backed by local players like Primavera Capital. But if it does well, perhaps there is a chance of Grandpa Free Tea growing into a city street perennial like Starbucks, HeyTea and Luckin Coffee.

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