Kona coffee war shifts to another battlefront

Small farmers decry a proposal for stricter state inspection rules

For nearly 20 years, Cea Smith has been growing coffee in the hills of Kona, harvesting the coffee cherries from Smithfarms' five acres in Honaunau, then processing and roasting the fruit in small batches into beans that she sells on her own.

But a proposal by a statewide trade association led by one of the state's largest coffee sellers threatens to change the way Smith and other so-called "estate farmers" do business.

The Hawaii Coffee Association wants the state to require estate farmers, and anyone else processing and selling coffee in Hawaii, to have their product certified by state agriculture inspectors.

Current rules require certification only for unroasted green coffee that is shipped out of the region where it was produced. This means that estate farmers like Smith -- who grow the coffee, have it processed and roasted, then sell it on the Internet -- are not required to have their green beans certified.

Requiring certification, Smith said, would increase costs for estate farmers and create logistical headaches for them -- making it harder to make a living. What's more, estate farmers say there's no problem that needs fixing.

But Jim Wayman, chief executive of Hawaii Coffee Co. and chair of the Hawaii Coffee Association's legislative committee, said current rules allow people to cheat consumers by passing off inferior coffee as high-quality Kona.

Although Wayman said he didn't know of anyone taking advantage of the system, he said, "It only takes one person doing it wrong to cause a loss in consumer confidence in Kona coffee."

Coffee inspectors examine and taste the coffee to make sure the beans have a proper size and condition and that the coffee tastes the way Kona coffee is supposed to taste. Inspectors mark bags of certified beans with tamper-proof labels. Wayman said the system is the only way to ensure quality and that anything short of mandatory certification of all green beans would not fully address the Hawaii Coffee Association's concerns.

The dispute marks the latest in a series of conflicts between estate farmers and Wayman, whose company owns the Royal Kona and Lion Coffee brands. Earlier this year, estate farmers in Kona pushed for legislation mandating that coffee blends carrying the Kona name contain at least 75 percent Kona coffee, instead of the current 10 percent. But Wayman, whose company is one of the state's largest coffee blenders, opposed the legislation. And following a controversial board election that left many estate farmers crying foul, the Kona Coffee Council also opposed the bill, which went nowhere.

Wayman also took heat from some estate farmers last year after he led opposition to a proposal by PLK Air Services Group LLC to build a coffee processing and distribution center at the Kona airport. After initially opposing PLK's project, some estate farmers came out in support of it, saying that Wayman had lied to them about PLK's plans.

The situation has created an ironic twist: The estate farmers who previously railed against blenders like Wayman for opposing stricter labeling now are opposing stricter regulations that Wayman is calling for in the name of consumer protection.

Although Wayman said that "both sides are a lot closer on this than you think," the matter appears to be at a full boil. In an e-mail to estate farmer Howard Conant, Wayman earlier this month threatened to launch "an advertising campaign highlighting, 'Kona's Dirty Little Secret' that not all Kona Coffee is certified and therefore if it is not certified it may not be genuine Kona Coffee. ... Maybe this should be incorporated into the truth in labeling rules as well."

Wayman later said he wasn't really considering an ad campaign but merely wanted to say that it could be bad for the industry if consumers realized that not all Kona coffee was certified.

The state Department of Agriculture has scheduled a meeting with farmers and processors next week in Kona. In the meantime, Agriculture Department officials are considering ways to address the Hawaii Coffee Association's concerns without creating an unreasonable inconvenience for the estate farmers.

One solution would expand the use of a state-owned "100 percent Kona coffee" certification mark, which is granted by the federal government certifying that the coffee comes from Kona. The state now uses that mark only for green coffee.

Jeri Kahana, an official with the state Agriculture Department working on the issue, said the agency could extend the use of the mark to roasted coffee. In that case, she said, the state could mandate that the mark be used only on roasted coffee that had been certified while it was green. The department could adopt that policy without a formal rule-making process.

But Wayman said the rule, which stops short of requiring certification of all green coffee, would fail to address the concerns of the Hawaii Coffee Association.

For example, Wayman said the policy would not prevent a large processor from coming into Kona, buying up large quantities of Kona coffee, roasting it and selling it -- all without ever having the coffee certified. Although this sounds much like what PLK executives have said they plan to do, Wayman said: "I'm not even thinking about PLK. It has nothing to do with them."

Regardless, Al Kam, who is PLK's chairman and the former chief executive of Hawaii Coffee Co., said such a rule change would not affect PLK because the company is going to seek "an even higher standard" than state certification to show the origin of its coffee.

"The guy it's going to hurt is the small guy who's got all that Internet business," Kam said.