Business World

When Coffee Speaks
Tea & Coffee's Business Classifieds!
Free Ukers Guide!
Festival Kawi
Coffee Tea Business Mag



Richard Loero,

Kaanapali Coffee Company

Richard Loero, currently president of the Hawaii Coffee Growers Association, and also with Kaanapali Coffee Company on the island of Maui, reported that this year’s crop is coming in late, “We didn’t start officially until two weeks ago, we had a coolish and overcast late summer, last year at this time we were half way through our crop.”

But Loero’s concerns are more long term when it comes to pursuing the interests of Kaanapali Coffee Company or of Hawaiian coffee growers in general, “As a growers association, we are looking for true Hawaiian varieties. The varieties we use now were developed elsewhere, in Central America primarily. The University of Hawaii and the Hawaii Agricultural Research Center, they both have first class plant breeders. As a result of their work, I hope, we will be coming up with better tasting varieties, better yielding. These new varieties should do well in terms of disease and pest resistance, and do well in our environment. Many people don’t realize that in Hawaii we have our own varieties of sugar, and even different sugar varieties for different elevations. So, in the case of coffee, we’re going to have first class varieties. It’s an expensive process but one that we know is essential.”

The kind of control Loero seeks over his agronomic destiny, and the type of benefit that can be derived from such a search becomes clear when he describes the selection of varietals he presently grows. “We currently have moka, yellow caturra, typica and red catuai. These coffees were some of the best tasting in our early trials, and they prosper in our climate. An added benefit, however, is that they ripen at different times during harvest, This allows us to have less installed capacity by giving us a longer harvest season, yellows are always first, for instance. We do all mechanical but that doesn’t mean we aren’t selective. When the trees were small and young we looked at some hand-picking here and there. We really pay the price of machine picking in terms of the loss we incur. In the factory we lose around 12% and in the fields we lose 10-15%. In a year like this I’ll do four passes per field, last year we did three, the year before we did five. Slow is better for the coffee, but it can go very slowly.”

Loero has a very basic attitude toward his role as production manager at Kaanapali Coffee Company, “It’s farming,” he states. But he’s also very proud of what he and his colleagues have accomplished, “Everything’s under drip, so we can control a great deal. We only had about two big flowerings.”

But Kaanapali as an organization is beginning to not only focus on farming, but on marketing as well. Loero notes that the company has shifted focus over the years it has been in business. “We started as most growers over here as green bean sellers and evolved into selling 60% of our production roasted. Next year we’ll sell 80%. For a grower in the states, it makes no sense to sell green. We have two lines, they’re all estate coffees. We’re selling not only the coffee but also the islands. We started as a division of a very large sugar mill, that sugar mill was closed last year. The crop is about 500 acres, we’re harvesting 450 acres this year and we’re producing 650,000 pounds.” From Loero’s comments, it is easy to see that the operation has lots of room to grow at this point. But the dynamics Loero’s working with are very different than what one might expect; ironically, land is the least expensive input. “What drives us is cost per acre, not yield per acre. Central America has yields of 40-50 hundred weights per hectare and we have 20-30 in Hawaii. That translates to us doing 2,000-3,000 pounds per acre.” The rest of the mission for Loero is fine-tuning and exploring options, “We do aquapulping and no fermentation at all. We pulp overripes, we did innumerable trials to see if there was a significant difference and found none. We also looked at whole naturals, and there we found a difference. The decision was simple-we pulp our overripe and then dry it, it doesn’t have mucilage anyway so there is no need for fermentation. We used to offer four varieties, both washed and natural. One product is three varietals mixed and that’s the blue line. We toll decaffeinate the same line in Vancouver, BC, at Swiss Water, and we also sell it flavored.”

Steve & Chris McLaughlin,
Captain Cook Coffee Co. Ltd.

Chris McLaughlin is president of Captain Cook Coffee Co., Ltd., and is responsible for selling and marketing the coffee. His father, Steve McLaughlin, well known as the president of his coffee importing company, Cal Trading, is also chairman of Captain Cook Coffee Co., Ltd. Steve McLaughlin was first to comment on the recent evolution of the Hawaiian coffee business, “We divide [Hawaii’s recent coffee history] into two segments: before Kona Kai had problems and after. As a result of Kona Kai’s fiasco, the industry got better, because now the Hawaii State Department of Agriculture has mandatory certification for all the islands. It’s the key to the success of Kona coffee, because when you’re selling coffee as expensive as Kona coffee is, your customers want that coffee to be pure.”

The certification that Steve McLaughlin refers to is the State of Hawaii’s guarantee that the coffee being sold (and this refers to coffee in green form) is 100% from the area denoted. McLaughlin reflected that Captain Cook Coffee Company always has had a policy of certifying their coffee, even before it was mandatory. Hawaii’s program may be the most stringent origin-labeling requirement in the world.

Chris McLaughlin emphasized how important it is for the roaster and retailer to know that the Kona coffee they are buying is certified. “Coffee coming out of Hawaii has to be certified. The scandal is the reason why some roasters have lost consumer trust, and in the wake of the scandal the certification has allowed us to rebuild trust. The Kona coffee industry is still going through their uphill battle, they’re achieving that, but it’s taken five years to get consumer confidence back on line. We’ve done everything we can to support certification. In addition, we now have trademark certification. This is what it’s going to take, I believe, to market Kona coffee successfully in the future. No other producing country can do it. You can’t monitor Brazil with 30 million bags of coffee. Jamaica comes the closest to doing what we do. Most important, we want to be sure our customers know their getting the real stuff. We do everything we can to ensure that, and more, in that we also want our coffee to taste great.”

On Captain Cook Coffee’s part, Chris McLaughlin indicated, “We’re looking forward to this season. Although it’s early it looks like the overall quality of our crop will be excellent. We expect a little bit more than last year and I expect the yield out of the cherry will be good as well. ”

Steve Hicks,
Greenwell Farms

Steve Hicks, managing director of Greenwell Farms predicts, “It’s going to be a good year, a larger crop than last year. The quality looks good, overall demand is firming up, the market took a bit of a dive in terms of the Kona Kai scandal and the subsequent lawsuit. In terms of getting a good cupping it’s a little early, it needs some ‘repose.’ The crop is a little late relative to previous years but in terms of physical appearance and size, it looks great so far. We find that when you see a good crop it relates to the cup. Generally the farmer in Kona manages the soil to get the healthiest tree he can, and leaves it at that. We support that tree in whatever phase it is in. Since a lot of this is dry land farming we have to make sure that the soil will always be in the best shape possible.”

With regard to the impact of the other islands now producing coffee, Hicks was upbeat, “I was involved with the Kona Coffee Council in the early 1980s and at that time there was a great deal of concern about the production coming on line from the other islands.” But there would be more benefits in store for those Kona coffee farmers who took their time, “The state Department of Agriculture has various programs, for instance, so the larger we as an industry are throughout the state, the more attention we get. Through the Hawaii Coffee Association, our industry is taking on various appellation standards.” Hicks implies that without coffee growing on the other islands, this and other projects might not have gotten started. “In general the effect of the newer farms has been very beneficial The Hawaiian Coffee Association has been very good for us, and is becoming stronger because of the larger growers coming on the market.”

…and Back to Kauai…

Frank Kiger,
Kauai Coffee Company

Frank E. Kiger, vice president and general manager of Kauai Coffee Company and current president of the Hawaii Coffee Association (HCA) was upbeat with regard to the impact that Hawaii’s newer coffee producers have had on the Hawaiian coffee industry. “The industry is working together very well statewide and generating positive results-this joint effort has affected every aspect of the coffee business statewide: growing, processing, roasting and marketing. There was a lot of separatism at first, but now it’s a lot more positive, and that mood extends from seed to cup.” This positive landscape makes it a good time for the HCA to get things done, according to Kiger. “The Hawaii Coffee Association has come in at a point to help solve problems. One of the big projects for the HCA this year is to review existing blend laws and the truth in labeling laws. It looks as though we‘ll be able to get consensus all through the industry and every segment of the business, while we’re working very positively with the state government. Our main goals are to protect and educate the consumer, and basically to protect the integrity of Hawaiian coffee.”

Voicing the same sentiment that many in the business now voice, Kiger wants the HCA and the industry to move forward in positive ways: “We don’t want to beat the drum too loud about things that have happened in the past. We would rather look at largely focusing on labeling and what the requirements should be on labeling, making sure that when the consumer picks up a package of coffee he is sure he knows what he’s getting, especially the visitors.” (“Visitors,” it seems is the new, politically correct term for “tourists,” according to Kiger, sounding somewhat perturbed. But one wonders why we all can’t be called Hawaiians, allowing that some of us are residency-challenged.)

Semantics aside, Kiger continued, “It’s very well documented that a visitor to Hawaii will purchase a 100% Hawaiian coffee, and not a 10% blend if he or she knows the difference, even if the 100% is significantly more expensive.” Kiger then chuckled and reflected, “Rather than saying a coffee is 10% Kona coffee it should say 90% non-Hawaiian coffee.” Kiger then explained that there are two schools of thought with regard to blending and labeling, “One is to change the blend law and increase the percentage, the other is to change the labeling requirements so that the consumer is aware of what they’re getting.” But within this argument there are considerable complexities, dotting I’s and crossing t’s, quite literally, becomes the name of the game. “If a package says ‘Kona Coffee,’ for example then it has to be 100% Kona coffee, and if it’s a blend then the word ‘BLEND’ has to appear between ‘Kona’ and ‘Coffee,’ and,” Kiger laughed, “the word ‘Blend’ should be two inches high.”

Kiger attempted to sort out more of the in’s and out’s of the various regulations, “As of right now the blend law only protects and pertains to Kona, so the blend law needs to be amended so we have protection in labeling the coffees from other islands.” (Obviously, since blend is not something that is generally SUPPOSED to happen to green coffee before it is sold to a roaster, blend labeling deals strictly with roasted coffee.) Kiger continued, “The certification process pertains to grade and origin and is regulated by the State of Hawaii. The trademarks for each of the islands, however, are a federal program and that’s where we are federally protected, for the time being that has mostly to do with the sale of green coffee but we’ll deal with roasted coffee in the future, but for that we’ll have to develop definitions of use. Basically we need to create an audit trail, much as they do with organic coffee, so we can track from the green to the grocery store. We need to have that kind of audit trail in force.” Kiger concluded with regard to this topic, “It’s definitely a first step having your origins registered and federally protected. I think it’s where the other origins worldwide are heading and I think we’re (Hawaii) the leaders.” Many origins are, in fact, considering the registration of their most desirable coffee producing regions, but Kiger has a point: which has done more than the coffee producers of Hawaii?

Perhaps more than any other new farm, Kauai Coffee Company has been taken to task for producing “too much coffee” and endangering the premium that all Hawaiian coffee farmers hope to attract. Kauai Coffee’s critics will be happy to hear that, according to Kiger, “It’s going great with our coffee, we’ve made major improvements this year and we expect demand to be higher than supply next year. Japan has helped somewhat in that regard. Of course they kind of dropped off for a few years with their economic problems but now they take 20-25% of our production.” Kiger does not indicate that it was easy, rather he describes how management actually increased the sense of competition and free enterprise to the get the most out of his people, “Here as far as our coffee goes, we’ve taken a little different approach. We split our 3,400 acres into six different farms and assigned permanent people to each of the six farms. This arrangement has stimulated a little friendly compe­tition and we have an annual cup­ping contest that enhances this. When we looked at what we had on the farm, we decided that our best marketing is our estate itself. So, basically I'm doing a lot of traveling and bringing the farm to wherever the people are. We're selling 95% green, we believe we don't want to compete with our customers, so we don't sell roast­ed coffee outside of our visitors center and a few select locations here on Kauai."

The names of the farms that the Kauai property have been divided into are as follows: Ekahi, Hoowai­wai, Hanini, Kihapai Pomaika, Pookela, and Uluwehi Aluwehi.

There is, in fact, these days a uniformly (almost sickeningly) optimistic point of view toward competition and the tough breaks the Hawaiian coffee industry has had over the past few years -the economic down-turn in Japan and the effect on the trade with "visitors" was not even mentioned here. Now, it can't be said that a little scandal and competition never hurt anyone, far from it. Those not directly con­nected with the Hawaiian coffee business say the scandal hurt the farmers more than they themselves are willing to admit. One roaster who recently visited the Kona coast noted that some farmers say due to the scandal they are selling only half their coffee. Another farmer said it didn't matter because the labor supply on the island had become so tight they can only pick half of it anyway. Apropos to this, there is another proverb, "That which doesn't kill us, will make us stronger." The coffee growers of Hawaii may want to consider it, survival - in most cases, is preferable to the alternative.

Timothy J. Castle is the president of Castle Communications, a company specializing in marketing and public relations for the coffee and tea indus­tries. He is also the co-author (with Joan Nielsen) of The Great Coffee Book, recently published by Ten Speed Presks, and the author of The Perfect Cup (Perseus Books). He may be reached at: (310) 479-7370 or via E-mail at: qahwah@aol.com

Tea & Coffee - December/January 2001

Theta Ridge Coffee

Tea & Coffee Trade Journal is published monthly by Lockwood Publications, Inc., 3743 Crescent St., 2nd Floor, Long Island City, NY 11101 U.S.A., Tel: (212) 391-2060. Fax: (1)(212) 827-0945. HTML production and Copyright © 2000 - 2013 by Keys Technologies and Tea & Coffee Trade Journal.

Terms and Conditions of Website Use.         Privacy Policy.

HTML Copyright © 2000 by Keys Technologies and Tea & Coffee Trade Journal. All rights reserved.