Zarraffa’s Coffee: Lessons from the past, vision of the future

Kenton Campbell is one of only a handful of coffee company CEOs still involved in the day-to-day running of the company they founded. As Zarraffa’s Coffee enters its third decade, we discover the roller coaster ride that has made it both unique and successful, and learn of Kenton’s plans for its future.

What a great ride it’s been,” Kenton says, his voice filled with enthusiasm. He’s speaking of both 25 issues of GRIND, and two decades since opening a small coffee roastery and café on the Gold Coast.

“The biggest thing is that change is inevitable,” he continues, “and I think this evolution is a good one. We’re going to take it with both hands and do the most we can with it.”

Starting with GRIND, it will be the last hard-copy issue of the magazine to be published. “We’re going online,” Kenton explains. “GRIND Live we’ll call it. We’re going to social media, we’re going paperless. We still want to communicate, to have good stories, to continue growing the Zarraffa’s community. We want to have a voice and to find ever-increasing ways to use it.”

And with over 70 Zarraffa’s locations as this issue goes to press, Kenton and his executive team are deep into plans to increase franchise opportunities nationally and beyond, through administration and operational restructuring.

“As our mission statement suggests,” he says, “We’re here to be Australia and New Zealand’s premier specialty coffee provider. We know what we are. We’re a QSR (Quick Service Restaurant) specialty coffee, make no bones about that.

“‘Zarafa’ is the Arabic word for giraffe, and the Masai giraffe lives on the savannahs of Kenya and Ethiopia, where some of the world’s finest coffee is grown.”

“We’re not a burger pusher, we’re not pizza, and we’re not just coffee on its own. We have an arm’s length, espresso cart mentality, as boutique as we can be for as big as we are.”

“We care for our customers by giving them speed of service so they win back some time in their day for what they want to do. And we do it with a great smile and good coffee, every time.”

And when Kenton says ‘espresso cart mentality’, he’s harkening back to where his story begins, in the Pacific Northwest of America.

ONE LOG AT A TIME

In the 1970s, Kenton was growing up in Springfield, Oregon, a logging town on the western flanks of the Cascade Mountains. Just across G Street from the family home, a paper mill owned by logging and forest products giant, Weyerhauser, featured towering stacks of Douglas fir and spruce logs.

“I looked at all those logs and thought, ‘if I could make a dollar for every log, I reckon I could become a millionaire,” Kenton remembers. “I could sell something for a dollar at a time, but I could never sell something for a million bucks. I couldn’t imagine that, especially at 11 years old. But if I could ever find something I could sell for a dollar a time, I reckoned I could do it a million times over and become a millionaire.”

Ten years later, he moved to Seattle, Washington, where he took on a job selling advertising. One of his clients had just completed a major business deal and asked Kenton if he wanted a coffee to celebrate.

“I don’t drink coffee,” Kenton replied, but when his client explained that he’d just bought ‘this newfandangled coffee machine’ that could make mochas, Kenton agreed to give it a try. “What he gave me wasn’t coffee that I knew. It was fabulous.”

On the way home, Kenton stopped at a petrol station to fill up and when he went to pay, the man behind the counter said, ‘I’ll be right with you’ and made Kenton wait while he made two ‘double lattes’.

“I’d just bought 20 bucks worth of petrol and he says he’ll be right with me after he’s served coffee? Gas was the largest commodity in the world and he’s saying I can wait? When I got home I rang a good friend who ran an espresso cart called Espresso Lane. As soon as I saw her cart I knew that this was what I wanted to be doing.” A month later he negotiated his first coffee cart in the upmarket Seattle suburb of Bellevue.

“I got into it because I had the right attitude and I love people. I had that ‘cart mentality’, an arm’s length relationship with my customers. I didn’t want to know where they were going that night or who they were dating, I just wanted them to know that I cared and that I hoped they had really good day.”

And at the time, the price for an entry level hot beverage, a short latte, was just over a dollar. Kenton had found his ‘pile of logs’ to sell.

SHARING THE WORK, SHARING THE REWARDS

Kenton was operating five espresso carts in Seattle when he was approached by two Australians to work Down Under. In what was either bad luck or good fortune, he was in a serious car accident within a couple of days of arriving on the Gold Coast. When seeking treatment for the whiplash, he met and fell in love with his massage therapist, Rachel Hicks, who later became his wife.

The birth of Zarraffa’s Coffee has been well covered in previous issues of GRIND. How Kenton, disappointed by the quality of coffee he found on the Gold Coast, set up a small roasting house ‘in the backstreets of Southport’. Then in early 1996, he went to Brisbane to register the name Zarraffa’s Coffee.

“At Eagle Street and some of the other big streets where they have about a thousand people crossing at any one time, nobody was carrying a takeaway coffee,” Kenton recalls. He was stunned when he realised, ‘it hasn’t happened here yet!’”

With money he borrowed from Rachel, Kenton opened their first retail store, on 25th September 1997, upstairs in Australia Fair Shopping Centre in Southport. Within a year they moved to a better spot downstairs and soon they had opened a second store at HarbourTown Shopping Centre, situated north of Southport. But cash flow was as tight as was the ‘shoebox’ they lived in, and now they had an infant son.

“I remember Rachel saying, ‘I don’t need anything flash, but I’d like something with a bit of a yard. Can you find another way of doing this?’” Kenton recalls. It prompted him to research the business of franchising. The Australian Competition and Consumer Commission had only recently drafted a Franchising Code of Conduct to assist the relationship between franchisee and franchisor.

“I thought, I can play by the rules,” he says. “I looked at a life of opening stores on our own, and owning all the debt, all the risk, all the stress. And I compared it with what a life of franchising might be, where you share in the day-to-day challenges, being able to afford to have other people wearing some of the hats I was wearing, and sharing in the wealth.

“I realised that, ‘there’s enough in this for all of us’, and I haven’t looked back. Without franchising, I wouldn’t be where I am today.”

In 2000, Kenton began preparing Zarraffa’s first operations manual and the franchising disclosure and agreement documentation. In October 2001, Kenton and Rachel opened their first franchise store in the Myer Centre in Brisbane’s CBD, with more than 40 more stores added over the next decade.

FINDING PURPOSE THROUGH ECOFORCE

“In 2005-6, I went through a period where I felt quite lost,” Kenton says. “I remember saying things to myself like ‘I have everything and nothing’. This was not from a family or personal point of view. It was more like, ‘one more store, one more store, one more store. I know I’m going to make money, but I still have the same problems, in fact I may have created more. I’ve got new obligations, accountabilities, responsibilities’. I got quite dismayed by it and thought, ‘what in the hell is it all for?’ And then I met Steve Irwin.”

The ‘Crocodile Man’ encouraged Kenton to become involved in conservation activities, “but shortly after we met,” Kenton says, “he died. It shocked me to the core.” Kenton contacted Australia Zoo and offered to help fund its koala hospital. Steve’s father, Bob, rang Kenton back and invited him up for a face-to-face meeting. As a result, Kenton agreed to fund koala research on Bob’s Ironbark Station, which proved to be successful.

Just as important was that Bob opened Kenton’s eyes as to ‘just how bad society was looking after the environment’. Kenton says that the simple message he took away was that wildlife, for the most part, doesn’t need to be ‘cared for’. They just need to be left alone to do what they’ve done for thousands of years.

“I realised that we’re pretty horrible at doing that,” he says. In 2009 he set up Ecoforce, a non-profit conservation foundation to investigate pressing environmental issues. It’s tag line is ‘conservation through conversation’, something Kenton wholeheartedly believes in.

Over the next few years, Ecoforce – which has since rebranded as the Zarraffa’s Foundation – took on projects from the plight of dugongs and turtles in northern Australia, to the impact of ocean acidification on coral reefs and the plight of rhinoceros in Kenya.

“Steve and Bob Irwin gave me a purpose in life beyond business,” Kenton says. “And it gave me a chance to use Zarraffa’s to open doors, to have a voice when it’s needed. After all, animals can’t speak for themselves.

COFFEE FOR CONSERVATION

‘Zarafa’ is the Arabic word for giraffe, and the Masai giraffe lives on the savannahs of Kenya and Ethiopia, where some of the world’s finest coffee is grown. It’s not surprising that Kenton’s first visit to Africa, in 2012, would have a profound affect.

But it wasn’t just the wildlife that captivated him. He felt there was a lot to learn from the community-based conservation efforts he saw, and believed that he could contribute something in return. “I believe in trade, not aid,” he says. “We’re taking a commodity from the community, so I’d like to give something back on several levels.”

Since then Kenton and Zarraffa’s have supplied funds to build a nursery in Meru, Kenya, including the money for seedlings and a new concrete slab where coffee is processed.

Most importantly, Kenton has reinforced the link between coffee growing and conservation. Thanks to the efforts of Kenton and others, rhino conservation is now one of the largest industries in Kenya. On his last visit, he saw two men dressed up in a black rhino suit encouraging people to visit the Lewa Conservancy.

“After four years it’s getting through just how important rhino conservation is. When I first started I said that if the rhinos go, I go too – think about it.

“And they have.”

SWINGS AND ROUNDABOUTS

It was on his trip to Kenya that Kenton fell ill. On his return, he was diagnosed with tonsillar cancer and advised to have immediate treatment. Fortunately, Kenton was in the capable hands of Dr Sam Dowthwaite, an Ear, Nose and Throat specialist, who introduced him to an extraordinary team at Brisbane’s Princess Alexandria Hospital.

As a result of their discussions, they recommended that Kenton become the first patient in Queensland to have a tonsil cancer removed by robotic surgery. The operation took place at Greenslopes Private Hospital, in Brisbane, the only Queensland hospital at the time with the robotic da Vinci Surgical System.

Thanks to the quick response and the skills of the team, the operation was a success. And knowing his early diagnosis was crucial, Kenton has become an Ambassador for the PA Research Foundation and its Centre of Excellence for Head and Neck Cancer. Zarraffa’s Coffee has committed $25,000 per year for 10 years, to help the Centre promote early diagnosis and prevention and also to offset the costs of robotic surgery.

For Kenton, it was as much a life-changing, as a liferestoring event. “I didn’t die,” he says, “but I certainly saw my mortality. I realised my time is limited so I’m just getting on with it. I’m living my life, I’m joyful and I’ve got purpose. And Zarraffa’s has given me another gift – I’ve got my mojo back.

“I’ve realised I’ve still got a lot to accomplish and am excited that Zarraffa’s needs me from a business and entrepreneurial perspective. Beyond that, Zarraffa’s will open huge doors for me to do a lot of good. Now that’s pretty awesome. I never imagined as a kid that I’d be doing this. It would have been a fantasy for me back then, and I was a pretty good dreamer.

INTO THE FUTURE

Work has begun on Zarraffa’s Coffee’s new national headquarters, stretching across 5.4 hectares on the Albert River in Eagleby, Queensland. Adjacent to the recently-renovated Beenleigh Distillery.

“It will give us a roasting, logistics and distribution capability for what will be a national expansion starting next year, Kenton explains. The new headquarters will be important because, “we’re partnering with ‘area developers’ in New South Wales and Western Australia’.

An ‘area developer’, Kenton says, “fulfills the on-the-ground necessity for service, product and training. They share in that role. They also will distribute and will have a small warehouse so they can ship directly to stores.

We’re still growing in Queensland, it’s our primary market. NSW is our second market and we’ll go directly to Victoria, starting in 2017,” he says. He confirms that there will be a continued relocation of stores from shopping centres and other retail outlets to drive thrus, to create more customer convenience, with existing franchisees getting priority if they want to make the move. “They are at the top of the tree,” Kenton confirms.

“But, we plan to continue on as we have been – nice and steady wins the race. We are going to be a stayer in this market. And though I might be the face behind the brand, I am not the brand. There are a lot of people, franchisees, 1200-plus staff that get up early everyday and close this operation down every night, and keep the brand at such a high level. I couldn’t be more proud.

“I want to thank my wife, who is my partner, her family, our boys, my close friends and all the people who have been so good to us and the company in the first 20 years, and I look forward to the ride over the next twenty.”