Thursday, May 30, 2002

Jim Wayman, left, chief executive of Hawaii Coffee Co., said fewer Japanese visitors has hurt the island coffee industry. Wayman and vice president Jim Lenhart are set to launch the company's first organic coffee, under the Lion Coffee brand

More java,
fewer visitors
hit coffee growers

Prices fall to all-time lows as
fewer tourists take bags home

By Lyn Danninger

Challenges are nothing new for Hawaii's coffee industry, according to Dick Peterson, executive director of the Hawaii Coffee Association.

But the last year or so has been particularly trying for local coffee producers.

Hawaii Coffee Co. is introducing a line of organic coffee, which will retail for about $5.99.

Not only did world coffee prices hit all time lows, but Hawaii crop revenues last year dropped an estimated 23 percent to less than $18 million as both prices and production decreased, according to the state's Agricultural Statistics Service.

There were casualties.

The latest, Oahu-based Waialua Coffee Co., filed for Chapter 11 bankruptcy protection earlier this month. Maui-based Kaanapali Estate Coffee shut down before last fall's coffee harvest.

Fewer Japanese visitors to the islands meant less coffee purchased.

"We don't have the number of Japanese buyers we used to have. Coffee was one of the top three items to take back to Japan," said Jim Wayman, president and chief executive officer of Hawaii Coffee Co., makers of Lion Coffee and Hawaiian Isles brands.

But not all the news has been bad.

Molokai's Coffee's of Hawaii gained a new owner. Peterson said the company appears to be on the way to a successful comeback.

And Hawaii's specialty coffee growers, especially those in Kona, have not suffered as severe a financial crunch as farmers in countries that produce coffee as a bulk commodity, such as those in Central America and Africa, Wayman said.

"(Kona Growers have) got this niche market built up over the last 30 years, have a good name and some protection because there is a limited amount of space where it can be produced," Wayman said.

Calvin Lee, head of market development for the Hawaii Agricultural Statistics Service agrees. "It's affecting us, but Kona is still doing fairly well," he said.

A new truth-in-labeling law should also help all Hawaii coffee producers. It will require the percentage of Hawaiian grown coffee to be displayed prominently on the front of the bag.

"It applies to all point-of-origin coffees that have been trademarked," said Peterson. "In the past, the law did not pertain to anything other than Kona."

"It should also be a big help since most people don't take any notice if they are buying 10 percent or 30 percent," Lee said.

The law takes effect on approval by the governor, but existing coffee suppliers will have a year to comply.

The move is important, especially as more countries -- such as Brazil, the world's largest coffee exporter -- are taking steps to enter the gourmet coffee market, Peterson said.

Hawaii's coffee situation is far different from countries in central America, which have suffered as new coffee producer Vietnam has grabbed a growing share of the market through an aggressive export strategy.

"(Vietnam has) emerged as the second largest exporter in the world, now ahead of Colombia," said Peterson.

While the Vietnamese product, called Robusta, is not particularly distinctive, it's increasingly used as a filler coffee for blends, and that hurts other producers, Peterson said.

"(The blenders) like it because it goes to the bottom line," he said.

Still, while Hawaii coffee producers may not be suffering as much as their fellows in other areas of the world, they know it's no time to rest on their laurels, said Hawaii Coffee's Wayman.

More new Hawaii coffee products, such as iced coffee in cans and bottles, are entering the market. Producers are also working to develop lines of 100 percent Hawaiian blend coffee.

On Kauai, Alexander & Baldwin subsidiary Kauai Coffee just announced it will significantly expand its processing facilities.

Meanwhile, Hawaii Coffee Co. is poised to launch its first organic coffee under the Lion Coffee brand. It will be available in Longs Drug Stores beginning June 18 for a promotional price of $3.99 for a seven-ounce bag, said Wayman.

He said the company decided to go with a line of organic Kona coffee based on market studies. Organic coffees are selling well in California, Wayman said. "You'll find two or three brands of organic coffee there making their way into the mainstream," he said.

Wayman hopes to position his coffee at the head of the emerging trend. It will contain 10 percent organic Kona combined with a Central or South American organic blend, he said. Like other organic products, organic coffee is grown without chemical fertilizers or pesticides.

The regular price for the organic coffee will be $5.99; the same as Lion's regular Kona blend, Wayman said.

E-mail to Business Editor


Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]

© 2002 Honolulu Star-Bulletin