Law may add value to Hawai'i coffee

By Frank Cho
Advertiser Staff Writer

Gov. Ben Cayetano yesterday signed into law a bill requiring coffee retailers to disclose how much of their Hawai'i-labeled coffee is actually from the Islands, a move that local coffee growers hope will increase demand for their products.

The law, which takes effect July 5, 2003, requires vendors that roast and package coffee to disclose the percentage of Hawai'i coffee used in their blends on the package labeling.

Local coffee growers say that, overall, consumers do not know that most coffee roasted and sold in Hawai'i uses only 10 percent Hawai'i coffee.

"This is a very important development for our industry," said Frank Kiger, of the Hawai'i Coffee Association. "The labeling requirements in the revised law will allow consumers to clearly distinguish a 100 percent Hawaiian coffee from a blend."

But because consumer laws differ among the 50 states, enforcing the new requirements will be nearly impossible outside of Hawai'i.

"As far as roasted coffee, we cannot do anything on the Mainland other than warn those states about our requirements," said Samuel Camp, quality assurance division administrator, state Department of Agriculture.

Camp said Hawai'i has the federal trademark right to green Hawai'i coffee beans, but cannot apply the right to the roasted beans.

"We could lose the right to the trademark if we tried to apply and could not enforce it," said Camp, adding that the state is developing procedures to address those problems.

Still, Kiger said growers are hoping the new distinctive labeling requirements will put pressure on roasters to increase the mix of Hawai'i coffee in their blends — which could mean millions of dollars for Hawai'i coffee growers.

While the blends with more Hawai'i coffee will likely mean higher prices for some consumers, Kiger said growers believe that consumers are willing to pay for the higher quality of the Hawai'i product within.

A coffee blend with just 10 percent Hawai'i coffee sells for about $4.50 a pound retail, but a pound of the highest grade of premium Kona coffee could sell for between $23 and $25 a pound — or five times as much. Unroasted Kona coffee beans, called "green" beans, typically sell for $8 to $10 a pound, compared with green foreign coffee beans that can sell for as low as 50 cents a pound.

Despite the challenges, supporters said the law will open new marketing opportunities for Hawai'i coffee overseas.

"This new law will be doing two things for the industry, making the labeling much more consumer friendly and it will also open some doors for advertising in Japan and other countries that desire a higher level of coffee from a particular geographic origin," Camp said.

Camp said coffee drinkers in Japan want 30 percent of their coffee blend to come from a specific region, and that is something Hawai'i can market to those consumers.

"Hawai'i has got to position itself as a gourmet specialty coffee producer. We are the only coffee producer in the 50 United States," Camp said. "We are the only made-in-America coffee and we have the Hawai'i mystique that goes with that."

There are about 700 coffee farms in the state. Most, 675 in total, are on the Big Island with the rest spread among the other Islands.

State agriculture officials estimated the value of Hawai'i's coffee industry from bean growers to retailers at $250 million with annual farm revenue of $23 million.

Hawaii coffee growers produced about 7 million pounds of coffee beans this year — down 13 percent from a year ago, but up from 1.9 million pounds 10 years ago.