KFC enters China's shop-bought tea drinks market with Grandpa Comfy Tea outlet

Kentucky Fried Chicken opened its first Grandpa Comfy Tea outlet in Suzhou, signaling its entry into China's huge and popular market for shop-bought tea drinks.

The new shop offers tea beverages with characteristics from the Yangtze River Delta region, priced between CNY13 and CNY23 ($1.94 and $3.34) per item.

The US fast-food giant is also offering ice creams jointly created with Swedish food company Oatly Group.

In the logo for Grandpa Comfy Tea, Colonel Sanders is pictured with a cup of tea while wearing traditional Chinese attire. The shop's interior is decorated in a Yangtze River Delta-inspired design, and the brand colors are pink, green, and white.

Due to the comparatively low entry hurdles, the Chinese market for tea beverages is already oversaturated. According to data on the corporate information portal to Tianyancha, only around 60% of tea enterprises can last longer than three years. A quarter of businesses only last a year, while 35% fail in one to three years.

Wen Zhihong, a catering chain expert and general manager of Hehong Consulting, said KFC’s brand power, the multi-brand catering sector experience of operator Yum China Holdings, and the strong supply chain support are all competitive advantages for Grandpa Comfy Tea.