The Re-emergence of the Kona Coffee Industry
By William Duffy
Kona Coast, November, 1984
The sandwich board outside Patel’s Texaco station n Honaunau proclaimed the sign of the times: “Kona Kai Farms, Buying Coffee Cherry, 67 cents/lb.” A half mile in either direction, dozens of 100 pound burlap bags filled with coffee cherries are piled on the front porches of renovated buildings housing the Bong Brothers and Captain Cook coffee companies. Ten miles to the north, in Holualoa, United Coffee Company is installing new equipment in the old Donkey Mill and bulldozing ground for a major new coffee pulping operation. All over the Kona coffee belt, new coffee trees are going into the ground—from backyard plots to ten acre farms—and 200 acre plantations are on the drawing boards.
Just five years ago, many observers believed that the coffee industry here was in an irreversible decline. Where thirteen mills had once existed, Kona was down to two, which both sold their coffee to the only company left—Superior Coffee and Tea. Many old time farmers, disgusted with the low prices paid for their coffee, had cut down their trees to plant macadamia nuts, and hundreds of acres had become overgrown with weeds for lack of attention.
What happened to make Kona coffee the most exciting crop in West Hawaii? What are the forces behind the boom, and where is it likely to go from here. With macadamia nuts slumping, the papaya market over-saturated, and the other fruit and vegetable industries straining to compete with cheaper foreign alternatives, does coffee offer real hope for diversified agriculture in Kona? To attempt to answer these questions, let us look at how coffee first got to Kona over 150 years ago, and trace its changing fortunes over the years.
A Brief History of Kona Coffee
In keeping with the other flora and fauna of the Islands, Kona’s extraordinary coffee followed a lond and circuitous route to its Pacific home. In legend, coffee was first discovered by an Abyssinian goatherd named Kaidi, who noticed the energetic activity of animals after they had been grazing on small red berries produced by small trees with glossy green leaves. Kaidi took to chewing the beans himself with similar results, perhaps becoming the first “coffee achiever.” Within a short time, wild coffee from the highlands of Ethiopia was transported across the Red Sea to Yemen, at the tip of the Arabian Peninsula. There in the sixth century A.D. coffee was actively cultivated and introduced into the culture of the Arab world, first as a medicine and later, after considerable experimentation, alchemists discovered the brewing of coffee as a beverage, which they drank for both religious and meditative purposes.
The enjoyment of coffee spread, and Arab leaders tried to protect their monopoly, forbidding the exportation of fertile seeds. However, a Muslim pilgrim from India named Baba Budan smuggled seven seeds back to southern India where they grew quite well. The Dutch then secured some of the progeny of the pilfered seeds and planted coffee orchards in Java. By 1706, a coffee tree had been established in the Amsterdam Botanical Gardens from this stock.
Other European nations were of course interested in the production of this commodity. The French tried unsuccessfully to raise coffee in the south of France. Their ambition persisted, and after the Treaty of Utrecht was signed in 1714, Louis XIV was given a tree. This tree, the parent to be of more than a billion future tress including those of Kona, traveled from the Arabian port of Mocha to Java, then to Holland itself before it was delivered to Paris and installed in Europe’s first greenhouse at Le Jardin des Plantes. By the next year, new coffee plants were provided to many French territories, including French Guiana in South American. The various attempts of neighboring Brazil to secure plants were blocked until 1727 when a particularly charming Brazilian envoy was given seedlings and seeds hidden amongst fresh flowers by the wife of the French Governor of Guiana.
Such was the situation when King Kamehameha II and his Queen Kamamalu as well as a retinue that included Governor Boki of Oahu, visited England in 1825. Within a few weeks, both the King and Queen had died of measles. The British arranged to have the bodies returned to Hawaii on the warship Blonde, whose captain was George Anson Lord Byron (father of the romantic poet). Earlier, Boki had made the acquaintance of an agriculturist named John Wilkinson, a former West Indian planter, who wanted to cultivate sugar and coffee on Boki’s land in Manoa Valley. Wilkinson returned with Boki on the Blonde, and on the way they stopped in Rio de Janeiro to pick up some young coffee plants for the project.
In 1827 Wilkinson died before seeing the results of his work. The next year, Reverend Samuel Ruggles took cuttings form the Manoa field and brought them to Kona to plant as ornamentals. The plants did so well in the hospitable environment of the Kona Coast that within a few years they were planted extensively throughout the district as attractive and useful backyard plants. Although the first plants were not thought of as a commercial venture, the conditions in Kona were so ideal for the cultivation of coffee that before long it was an economic mainstay of the Big Island.
These ideal conditions prevail only in a twenty mile long “coffee belt” along the western slopes of Mauna Loa, the world’s largest active volcano at 13,680 feet. There, between 700 and 2,500 feet, rich well drained volcanic soil combines with mild breezes and gentle rains, as well as moderate temperatures and cool nights without frost. The volcano not only protects the plants from the prevailing northeast tradewinds, but also serves to create curious and unique weather condition. The mountain literally catches the morning clouds as though with giant hands, holding them in abeyance so that Kona mornings are generally bright and sunny. About mid-day, when the air is sufficiently warm, the clouds rise and slip by the crest of Mauna Loa to form a natural parasol against the full strength of the tropic sun. Too much sun can weaken a coffee plant to such an extent that it is unable to resist disease, just as too little sun prevents full maturation of the beans. Thus in Kona, it is not just one factor, but the combination of a number of favorable elements including weather and soil, shelter and proper elevation, that make this perfect coffee country.
Little has changed in the growing and milling of coffee over the years, although electricity has now replaced gas driven pulping motors, and jeeps and trucks transport the coffee instead of donkeys. Each fall, as the berries turn red, they are hand-picked and sewn up in 100 pound burlap bags. The coffee cherry is then “pulped” through a hopper which removes the red cherry and drops the seeds into a wooden tank. These seeds are allowed to ferment overnight to remove a sticky film, and are then spread out in the sun to dry for five to seven days. In the old days, almost every farm had one of these “pulping mills,” but over the years they fell into disrepair. Many are now used for housing, and can be detected by roofs on rails, which were pushed out onto scaffolding to expose the coffee parchment to the sun, and pulled back when the afternoon rains came. Over 100 of these pulping mills still exist, although the drying is often finished with the use of mechanical, diesel-powered dryers.
Parchment coffee is then taken to a “parchment mill,” where the parchment is removed and the beans are graded by size and density into 100 pound export bags. The bags are then shipped by boat to roasting plants in Honolulu, the U.S. mainland, and Japan where the beans are roasted and delivered to specialty coffee shops, fine restaurants, and a variety of retail stores ranging from Macy’s to the local deli.
Like all fine coffees, Kona is of the “Arabica” opposed to the “robusta” variety. Robusta, although higher in caffeine content, lacks the flavor and fragrance of the Arabica coffees. Robusta coffee is usually allowed to dry inside the cherry, whereas Arabica coffee is picked when the cherry is ripe, and the cherry is immediately removed to avoid contaminating the flavor of the beans with decaying cherry odors. Since coffee flowers several times during the Winter and Spring, the beans become ripe several different times eight months later in the Fall. Thus, the trees must be picked three or four times to harvest all of the ripe cherries, which accounts for most of the labor cost in producing gourmet coffees. Many television viewers have seen Colombia’s Juan Valdez picking “only the ripe beans” in the commercials for Colombian coffee. If Juan were a Brazilian, he would be shaking the dried beans from the tree and sweeping them up off the ground at the end of the season, instead of picking the ripe beans three or four times by hand.
By the time of the American Civil War, Kona’s reputation for quality coffee was internationally established, although a combination of white scale blight, limited demand , and the high profitability of sugar inhibited coffee production until later in the century when pineapple and sugar lands were planted in coffee. Mark Twain commented in his “Letters from Hawaii” in 1866 that “I think Kona coffee has a richer flavor than any other, be it grown where it may.” By the 1890s, many foreign laborers, mostly Japanese, Filipino and Portuguese, brought in to work the sugar cane fields, had fulfilled their contracts and were becoming independent farmers. When the Hawaiian monarchy was overthrown in 1894, former crown lands were made available for purchase and lease. Coincidentally, with the introduction of the Australian beetle, a means was found for controlling the white scale disease that had been periodically devastating crops since the fifties.
The availability of land and elimination of white scale, combined with unusually high coffee prices on the world market, produced a 10-year coffee boom around the turn of the century, and it was estimated that speculators lost over ten million dollars in ill-advised Hawaiian coffee ventures. By 1898, Kona had 6,383 acres in production, out of 13,901 total acres on the Big Island, Oahu, Maui, and Kauai.
From this period on, there was a gradual decrease in coffee production throughout the state, with the crop dying out in all areas except Kona. By 1947, Kona had an estimated 700 farms, totaling 3,400 acres in production. The post-war economic boom and Statehood, the cost of land and labor began to rise much faster than in underdeveloped countries where coffee workers were paid pennies a day, and land was essentially free. Despite attempts by Kona farmers and processors to differentiate their coffee from the world market so as to obtain higher prices, prices for coffee cherry failed to keep pace with increased costs, and so began a profit squeeze that forced more and more farmers out of the coffee growing business. Soon, the less productive lands on the other islands and in Hilo, Ka’u and Hamakua on the Big Island were abandoned, and by 1979, coffee was down to 600 farms comprising 2,000 acres in Kona. Where once Kona’s elementary schools operated on a “coffee schedule,” with the three month vacation coming during coffee harvest in the fall to allow the kids to help harvest the crop, vacation was changed during the Sixties so that harvesting became even more of a problem. Farmers were urged to plant macadamia nuts instead of coffee, the Department of Agriculture and the University of Hawaii’s College of Tropical Agriculture abandoned any serious coffee research after the middle 1950’s, and one by on the mills closed down and the coffee buyers stopped coming. By 1979 only two mills remained active—the Kona Farmers Co-operative in Napoopoo, and the Pacific Coffee Co-op in Captain Cook. Both these mills sold their coffee to Superior Coffee and Tea, a large roaster based in Chicago which marketed Kona coffee principally as a tourist item in Honolulu. No other roaster seemed willing to pay above world market prices for Kona coffee, slo the price was pretty much dictated by what Superior was willing to pay. Sons and daughters of the old Japanese and Filipino coffee farmers had no reason to continue the family business, as they found better jobs in the tourist and service industries, or moved to Honolulu or the mainland. It looked as if Kona coffee was on its way out of being an economic or cultural factor on the Big Island.
The Rise of the Gourmet Coffee Industry
It’s a long way from the rocky hillsides of Kona to the smoky coffee houses of San Francisco and New York, and perhaps further still to the trendy gourmet stores of Scarsdale and Beverly Hills, but the 1960s and ‘70s were to usher forth a demand for specialty coffee from these places that was to have a profound effect in Kona. The stirrings of American interest in gourmet foods can be traced to the years following World War II when returning soldiers encouraged cooks to recreate dishes they had sampled abroad. Over the next decade, education and affluence contributed, but it was mostly travel that heightened awareness. It wasn’t until the’ 70s that the food industry was turned upside down by radical changes in taste driven by a confluence of factors.
Simply put, these factors were taste and money. Consumers began to care about the differences in food, and moreover, could afford to pay higher prices for something they considered to be a better product. Even if a young couple could not afford a down payment on a house or a Hawaiian vacation, they could afford to pay whatever was necessary to secure the coffee they liked best. This change was apparent in the beer and wine industry before gourmet coffee became widely appreciated. Where once it was unusual to see non-American beers in liquor stores and supermarkets, today half the shelf space is taken up by foreign brews, costing upwards of a dollar per bottle. Similarly, imported wine and of more interest to Kona, American wines from California and New York, have taken a large share of the market away from mass consumption wines. Bottled water, chocolates, cheeses, ice cream, yogurt, fresh meats and vegetables, cookies—almost every food product now has a gourmet market which accounts for millions and millions of dollars in sales to the American public.
Just as it became fashionable to make one’s own spaghetti sauce and noodles instead of buying them in a can, consumers began to appreciate the value of freshly roasted, ground, and brewed coffee. Sales of filter-drip coffee machines, coffee grinders, espresso machines, and whole bean coffee began to rise dramatically, while the large roasters found the demand for their canned robusta coffee shrinking. The few old-time specialty coffee roasting companies (largely Italian families in San Francisco and New York) were joined by dozens of other large companies roasting coffee for regional and national markets, and hundreds of small roasters serving local markets. These roasters in response to consumer demand, began to seek out the finest coffees they could find, journeys that took them to Kenya, Yemen, Indonesia, Central America, and finally, Kona.
The Re-Emergence of Kona Coffee
Since the late ‘50s, Kona coffee farmers had attempted to differentiate their product from the world coffee market, and had achieved some success in convincing Superior Coffee to market Kona as a distinct brand. Although the prices received by the farmers were not enough to stop the decline of coffee, they were significantly higher than the world coffee price, and probably prevented the industry from disappearing altogether. During the 1970’s, Superior Coffee, the Kona Farmer’s Co-op, and the State of Hawaii had spent over $250,000 in promoting Kona coffee, and by 1980 this promotion had started to pay off, making Kina a profitable item for Superior, so profitable that they; agreed on an historic contract with the co-ops to pay 50 cents per pound for cherry coffee, indexed against inflation, for all the coffee they could supply over the next five years. The co-ops agreed to sell Superior 80% of their production, with the other 20% going to Ueshima Coffee Company of Japan. Superior, in turn, refused to sell green beans to any of the other gourmet roasters, who kept trying to buy green Kona coffee for their own businesses. These roasters took pride in their roasting techniques and the freshness of their coffee, and were unwilling to purchase already roasted Kona coffee from Superior.
The most aggressive of these roasters was United Coffee Company, the largest roaster on the West Coast, with headquarters in San Francisco. If, they reasoned, they couldn’t buy green coffee from the mills or from Superior, why not go directly to the farmer and buy the raw product? In 1980, United rented an old coffee mill, the Fujino Mill in Kainalu, and started offering the farmers 10% more for their coffee than the co-ops could pay under their contracts. Lacking their own pulping facilities, they contracted with farmers who already had pulping mills to turn the cherry coffee into parchment. The 1980-81 harvest was a large one, and United was able to secure 30% of the crop. Perhaps a third of United’s production was roasted, the rest was sold to other coffee companies, many of which received green Kona coffee for the first time. The co-ops couldn’t match United’s price rise because they had already signed contracts with the fixed 50 cent price, so they were essentially powerless to prevent the loss of their farmers to the new company.
The next year saw the entry of some local businesses into the coffee scene. Kona Kai Farms and Bong Brother Coffee Company were both started by transplanted Californians who had come to Kona and observed the coffee situation. They were of the same generation and cultural group as many of the new mainland roasting companies, and found it relatively easy to make contact with these roasters, who all wanted Kona coffee. In the 1982-83 season, they used the defunct Donkey mill to turn their parchment into green coffee, and sold small amounts to mainland roasters. Shortly thereafter, the Donkey Mill went up for sale and it was purchased by United Coffee.
The small companies tried to make deals with United and the co-ops to mill their coffee, but were unable to do so. Instead, Kona Kai Farms built the first new parchment mill in Kona since Donkey Mill was constructed in 1954. The next year’s harvest was the biggest in 10 years, and the new companies entered into serious competition for the coffee cherry, with Kona Kai Farms ending up with 10% and Bong Brothers 3.5% of the harvest. Most of this business was at the expense of the co-ops, although some of United’s customers were attracted by the higher prices offered by the newcomers. With three companies marketing green beans to the mainland market, the number of roasters who secured a supply of Kona coffee expanded again, and this increased demand soon translated into higher prices, both for the green beans, and for cherry coffee to the farmers. On January 4, 1984 Kona Kai Farms raised their price for cherry coffee to 60 cents a pound. Not only were these prices at record highs, but farmers were being paid for their crops within 14 days of delivery in contrast to the 30, 60, 90, or 180 days waiting periods of the old days.
After the season, the Kona Farmers Co-op renegotiated their contract with Superior Coffee so that they could pay a competitive price, and opened the 1984-85 season paying 61.5 cents per pound for cherry coffee. A group of local doctors, seeing the success of Kona Kai Famers and the Bong Brothers, combined with United Coffee’s former manager to form a sixth company, Captain Cook Coffee Company. As this is being written, prices for coffee cherry are headed for 70 cents before the season is out, and supplies of Kona coffee will certainly be exhausted before the next harvest. Old pulping mills, abandoned when the change in school vacations created a labor shortage forcing the farmers to spend all their time picking coffee, are being restored, new acreage is being planted for the first time since the 1950’s, and even the wild coffee trees are being picked clean. General Foods has entered the market via United, with a new Kona Horizon blend coffee to compete with Superior in the Honolulu and mainland grocery store and restaurant markets. There are two new coffee roasters in Honolulu specializing in Kona coffee, and Kona Kai Farms is putting out its own roasted coffee on the Big Island and Maui.
In sum, the present is rosy for Kona coffee farmers. During the last five years, the rising demand has caught almost everyone by surprise, and there has not been time for production to catch up. But what are the limits of this boom? What happens when the big agricultural corporations decide to go into the coffee business, or when tax sheltered partnerships plant an additional 2,000 acres? Will the boom turn to bust, with production outpacing the ability to market the coffee as is feared with the Hawaiian macadamia nut industry? There are several reason why the Kona coffee boom might sustain itself for more than just the next couple of years.
The Future of Kona Coffee
First, the availability of land for new acreage is limited. “Kona” coffee must be grown in the district of Kona to be allowed to carry that name, which is jealously guarded by the present growers and processors. And, even within the Kona district, only a small portion of the land, “the coffee belt,” harbors ideal growing conditions, making expansion of the industry outside the belt less profitable. Although the acreage could probably increase even beyond its previous maximum of 6,000 acres, the land simply does not exist to plant much more than that amount of Kona coffee. This places an upper limit on the expansion of coffee lands, unlike Macadamia nuts, which have been planted in all districts of the Big Island, as well as the rest of Hawaii.
Second, and related, is that Kona coffee is not as subject to foreign competition as other Hawaiian products because of its local identity. Gourmet coffee is sold, like fine wines, by region. For example, “Blue Mountain” Jamaican coffee, the world’s most expensive bean, commands three or four times the price of coffee produced in other regions of Jamaica. Kona coffee does have to compete with other fin coffees of the world, but all of these products are by their nature produced in relatively small quantities.
Third, Hawaii’s large tourist industry gives Kona coffee a marketing advantage not shared by other gourmet coffees. Not only do visitors to the islands purchase Kona coffee during their stay as one of the local items of interest, but once back home they continue to purchase it, through mail orders from Hawaii or from local coffee shops and roasters. Word of mouth spreads promotion of Kona coffee to their friends, many of whom are not gourmet coffee drinkers, but will make Kona their first specialty coffee purchase.
Fourth, the new companies and individuals entering the industry are more aware of the necessity of advertising and promotion than the old Kona coffee millers. They have better contacts on the U.S. mainland because many were in the business there before they came to Hawaii. All gourmet products depend on advertising to show consumers their superior quality, which can be very effective with coffee—witness the success of Colombia’s “Juan Valdez” commercials. And the romantic lures of Hawaii make promotion of Hawaiian products especially effective.
Finally, the upswing in the specialty coffee market has only begun to happen. Barely 2% of the coffee consumed in the U.S. is specialty coffee, but it is growing rapidly. If coffee follows the trend in beer and wine, specialty coffee could command 205 of the market ten years from now. That kind of increase will not only swallow up 6,000 acres of Kona coffee, but probably encourage production of “Hawaiian” coffee in other areas of the islands. Moreover, the fastest increase in specialty coffee seems to be occurring in the proliferation of small roasters, who are best able to market expensive coffees such as Kona.
These factors make it likely that the Kona Coffee Rush will continue for some time. As long as Kona coffee farmers can produce a quality product, tourists and coffee connoisseurs will pay a premium price to enjoy it, and the industry should prosper and expand for the foreseeable future, perhaps even outpacing marijuana as Kona’s biggest cash crop.
