KFC coffee [Photo: dianping.com]

Thousands of KFC restaurants in China will start selling freshly ground coffee this year in a bid to become a lower-cost "premium" alternative to Starbucks.

The move is viewed as KFC's attempt to beat Starbucks in the higher end consumer coffee market in China.

According to an industry website, KFC's premium coffee will cost about 10 yua. That is around 1.60 U.S. dollars.

Last December, KFC started rolling out its new premium coffee in its most developed Chinese markets. So far the new coffee has apparently helped boost KFC's breakfast and afternoon business.

The company will offer premium coffee in 2,500 KFCs around China by the end of this year.