CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM
Hawaii coffee is grown on 7,600 acres across the state, comprising 710 farms. The farms sold $19.5 million in beans for the 2002-03 season.
Wake up to the new world of coffee
Increasingly sophisticated coffee consumers are demanding to know a lot more about the coffee they drink. Thanks in large part to the emergence of huge coffee retailers such as Starbucks with their vast array of choices, consumers have learned an entirely new language relating to coffee origins, roasting, blends and even cup sizes. Sanka? Folger's Crystals? Oh, puh-lease.
"There's no doubt the emergence of specialized coffee houses have raised the bar and a lot of people are drinking a freshly brewed cup of coffee for the first time in their lives," said Dick Peterson, a marketing consultant for the Hawaii Coffee Association.
A raised level of consumer expectations and increased competition means that those who grow, roast and sell local coffee have also had to find ways to differentiate their products from the dizzying array of choices consumers now have, from Jamaican Blue Mountain to Ethiopian Yirgacheffe.
At least one local company's expansion efforts are being rewarded. Hawaii Coffee Co., owner of Lion Coffee and Royal Kona brands, has been quietly increasing its share of the locally produced retail coffee market, now commanding between 60 percent and 70 percent.
The company also has been striking out for new markets on the mainland, Asia and Europe, Chief Executive Officer Jim Wayman said.
It had planned to make an appearance at the recent Canton Trade Show in China until the threat of severe acute respiratory syndrome forced the company to cancel. Wayman said the company's major push in Asia/Pacific markets right now is its canned ready-to-drink coffees for Guam, Japan and Korea.
CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM
Sharon Zamboo-Fan and John Kuper gather in the aroma of a dish of coffee during a taste test at Hawaii Coffee Co. facilities in Kalihi.
Hawaii Coffee Co. products are also expanding into U.S. military exchanges and commissaries since Wayman hired a new vice president familiar with the military market to beef up sales. The company recently signed an agreement for its canned drinks and both brands of coffee for sale in U.S. military exchanges in the Far East.
"We expect to be there by summer," he said.
It will also plug its goods at the largest food trade show in Europe later this year in Cologne, Germany, Wayman said.
"We'll be taking both brands of roasted coffee and canned ready-to-drink there," he said.
Hawaii Coffee's canned coffee-based beverages produced under the Royal Kona brand, such as Mocha Latte and Kona Blend, are familiar to Hawaii consumers, but not to other markets.
Now they can be found in about 1,000 small independent grocery and liquor stores in Southern California, Wayman said.
Omaha, Neb.-based beverage distributor Amcon Distributing Co., which last year acquired Hawaiian Natural Water, has added the Royal Kona coffee-based beverages to its stable of products. Through its California subsidiary, The Beverage Group, Amcon will handle marketing and distribution of the coffee drinks. They will soon be found in large mainland grocery store chains, something most small companies can only dream about. Hawaii Coffee employs 150.
Hawaii Coffee's www.lioncoffee.com Web site, now about 6 years old, brings in about $3 million a year, Wayman said. He wouldn't disclose the company's overall revenues. The company is owned by Paradise Beverages Inc.
CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM
Hawaii Coffee Co.'s Jim Lenhart holds an old can of 1930 Kona Gold coffee. The coffee is still inside. Hawaii Coffee produces the Royal Kona and Lion brands.
Web site customers are usually former island visitors, in particular those previously stationed here with the military.
Wayman said he did not realize when the company started the Web site that the more coffee the company sold to visitors while they were in the islands the more it would sell through the Web site after they were gone.
"It's funny, you tend to think of them as a one-time hit. But we found if you do it right, they become repeat customers," he said.
Wayman also launched the company's first organic coffee under the Lion brand last year and now has four Lion organic coffees.
Having a gourmet organic product has helped mainland sales, Wayman said.
"We've been able to say 'you don't have organic Kona coffee in your grocery store' so we've been able to use it as an entree there," he said.
Wayman believes that there is a movement afoot among baby boomer gourmet coffee drinkers toward organically grown and processed coffee, which they see as a healthier alternative.
"As a consumer market, gourmet, natural and organic are becoming one and the same," he said. "They used to be quite distinct but now the gourmet still wants quality but also wants a healthier product."
While organic coffee costs more to produce than regular coffee, Wayman is pricing both products about the same to encourage sales. The market for organic seems to be growing about 10 percent a year, he said.
Spotting such trends and filling niches is one reason Wayman's company is successful, said the Coffee Association's Peterson.
It's also the company's insistence on maintaining quality.
"If you ask me it's quality and consistency," said Matthew Loke, division administrator for agricultural development at the state Department of Agriculture. "When you observe some of these people in agriculture who are the most successful, quality and consistency are high on the list. They also pay particular attention to customers' needs."
But Wayman's success also means the rest of the industry has to work harder to compete.
Ultimately, that's a good thing for the entire industry, Peterson and Loke said.
"Hawaii's famous 10 percent Kona blend used to be pretty terrible but he's really raised the level for everyone because he believes in quality and being innovative, so the overall level of quality of the coffees coming from our state has improved across the board," Peterson said.
A new state truth-in-labeling law scheduled to go into effect July 1 goes one step further by enabling coffee drinkers to distinguish just how much Hawaii-grown coffee is in their cup.
The law requires coffee vendors to clearly label the percentage of Hawaii-grown coffee right below the company logo. Before, the percentage would likely be listed toward the bottom of the bag.
While the move may be good for consumers, it can also help the local coffee industry distinguish itself in a crowded market.
Congress is also mulling over legislation that would establish minimum standards for coffee coming into the United States.
Wayman and Loke said no one knows if the legislation will pass, but ultimately it should mean a higher standard of coffee, which would also be good for the local industry, they say.
Food safety and security have lately gained such prominence that the time is right for Hawaii to capitalize on both its position as the only coffee-growing state in the nation and its reputation for producing a high-quality product, said Paula Helfreich, president of the Hawaii Island Economic Development Board.
Helfreich credits Wayman with playing a large part in helping the industry to mature.
"We've been on a steep learning curve. But in the last 10 years, coffee has been one of the bigger miracles because it's gone to a world standard," she said.
Its popularity has also bought Hawaii another bonus -- its own coffee culture, Helfreich said.
"Being able to come and sit down with a good cup of coffee is a time-honored tradition. There's nothing more stress reducing than walking into your neighborhood coffee bar, sitting down with a good friend for a discussion and reading the local paper."
