In a recent interview, Yum China CEO Joey Wat discussed how K COFFEE's sparkling coffee offers slightly higher profit margins compared to lattes.

She explained that coffee beans—a key raw material—experience significant price volatility, while dairy remains the most expensive ingredient in China's market. "So we brainstormed: what kind of coffee doesn’t require milk? Someone suggested adding bubbles. I thought it was brilliant, though the challenge was market acceptance since sparkling coffee is a novelty. But it didn’t matter—China’s young consumers are eager to try new things. That’s how we launched apple, pineapple, and other flavored sparkling coffees."

Wat also mentioned that Lavazza, another coffee brand under Yum China, offers sparkling coffee. However, she believes KFC’s version is superior. "The production processes differ. K COFFEE uses specialized equipment to infuse bubbles, creating a sensation akin to drinking beer—carbonation makes all the difference."

Currently, Yum China operates two major coffee brands: K COFFEE and Lavazza.

K COFFEE focuses on quick, convenient coffee experiences. Launched in October 2022 with its first standalone store in Shanghai, the brand features sparkling Americanos, hand-shaken coffees, and baked goods like cloud toast. By Q3 2025, K COFFEE had expanded to over 1,800 stores, penetrating lower-tier cities.

Lavazza, founded in 1895 by Luigi Lavazza, is an Italian coffee brand. In early 2020, Yum China formed a joint venture with Lavazza Group (holding 65% ownership) to operate Lavazza stores and retail in China, promoting an "authentic Italian coffee experience." In 2023, Lavazza China announced plans to accelerate expansion, targeting over 1,000 stores by 2028.