One of the oldest businesses in Adelaide, Kappy’s Tea and Coffee is celebrating its 90th year keeping locals caffeinated. Simon Oaten and his wife Isabelle took over the beloved tea and coffee house 10 years ago, and they’ve breathed new life into an icon.
Buying Kappy’s may have been a considered choice, but finding it was somewhat serendipitous, and played straight into the English native’s love of tea.
“Before I came to Australia, I’d left England and I spent nearly two years working and labouring on a tea estate in India as a backpacker,” Simon tells Flying Solo. “So I’d developed a really strong interest in tea there. I love it. I drink it constantly.”
When the opportunity to buy Kappy’s came up 10 years ago, Simon saw a chance to swap office life for “a bit of a free hit to have a go at owning something that was truly historic”.
While tea is certainly his, well, cup of, Simon says he had not dealt in coffee before and had to learn coffee from scratch. “Luckily, the previous owner of 30 years taught me how to roast,” he says.
As Simon shares, reinvigorating Kappy’s has required a fine blend of respecting the roots while applying a modern sensibility for future success.
Getting the basics right first
When it comes to their retail function, Simon says they’re very old-fashioned and proud of it.
“On a Friday and Saturday, we crank. We’ve got a 1950s coffee machine, a 1940s roaster, and people love it,” he says.
“My favourite thing here is the community and the number of people from different walks of life that we see here every day…we have journalists, we have activists, we have every possible corner of society represented here. When this place fills up on a Saturday and they’re all here, there’s nothing quite like it.”
Knowing the business’ place in its community was a priority for Simon and Isabelle.
“It is important to sit down and understand the place that you’re in, before you start trying to change to a business blueprint or a business model that you’ve found works somewhere else,” he advises other small business owners.
By doing so, the pair learned who their customer base was already and how they could improve on that.
“We have customers here who had their first dates in our shop 40 or 50 years ago and have now come in as an elderly couple. So we have to cater for that,” he says. “But we had to do something to make it a little bit more modern and a little bit more sustainable behind the scenes [too].”
Building upon the legacy
Being a coffee and tea house is one part of the picture. Kappy’s has their own import and customs licenses, having become a reputable sustainable wholesaler over recent years.
“We have a 100 per cent organic policy to bring in tea and coffee, herbs and spices from around the world,” he says. “We make them and sell them on and let people brand them for themselves.”
Alongside their caffeine products, they’ve moved into the wattleseed industry.
“Ninety per cent of the native food that you see with wattle written on it comes from our processing here in this shop,” he says. “That’s something that we’ve had to add to make sure that we have a sustainable edge for a business that’s really steeped in an old mindset.”
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Catering to changing customer expectations
While Kappy’s might be steeped in tradition, some aspects of their business can’t afford to be.
“One of the changes that we’ve seen, certainly more than ever during the pandemic, is a change in the payments process towards 90 to 95 per cent EFTPOS transaction,” he says.
As suppliers to a lot of local cafes and restaurants, Simon says the business used to be massively skewed towards cash payments, which has now also changed for their wholesale customers.
“We’ve really just had to make sure that it is now a quick contactless process to walk in, quick conversation, contactless transaction, and receipt emailed to you,” he explains.
Kappy’s has recently started using Westpac’s EFTPOS Now terminal which is helping the business manage its cashflow more efficiently, with same day settlements on transactions.
“We’re a business that doesn’t pass on the service charge for using a card. So for us, it allows us to actually cost accurately at the beginning of each month. We know what our costs will be, and that’s a big start,” he shares.
The new terminals are also helping Kappy’s improve the customer experience, providing accessibility features like larger fonts, audio assistance and step-by-step prompts to support their needs.
“For a business where the vast majority of our customers are older age groups, not technologically inclined and often not thrilled to use [EFTPOS], the larger screen is a huge bonus,” Simon explains. “And finally, just the ease of use – especially for our customers that are vision impaired or hearing impaired, it’s really, really good for that. For us, as a business with that demographic, we see the benefit of these features every day.”
The most important learning of all
On a more personal level, Simon says the best business advice he ever received was simple: back yourself.
“I learned early on that procrastination was a terrible, terrible problem,” he says. “I was told when I first started out in business to back myself and back my intuition. And I would tell anyone to do that – if you think it’s right, then do it.”
It’s this drive that has helped Simon maintain the legacy of Kappy’s while also modernising it.
“I feel that we are very, very fortunate in our history and our position in where we are,” he says. “We probably have a little bit more time up our sleeve compared to most in terms of [not having to] change and change away from a standard cafe model.
“It would be a terrible loss if Kappy’s is not in the middle of Adelaide because it’s just been here for so long. I think we’re here for the time being as we are.”
Find out more about Kappy’s Tea and Coffee here.
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