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The Honolulu Advertiser
Posted on: Monday, July 14, 2003

Waialua firm developing decaf plant

By Sean Hao
Advertiser Staff Writer

John Stiles, director of research for Integrated Coffee Technologies Inc. in Waialua, has worked since the early 1990s trying to develop a genetically engineered, caffeine-free coffee plant that could revolutionize how decaf coffee is made and tastes.

John Stiles, a researcher who works for Integrated Coffee Technologies in Waialua, checks the status of coffee-plant tissues. He is trying to develop caffeine-free plants by shutting down the gene that triggers caffeine production. The company has had problems attracting venture capital.

Deborah Booker • The Honolulu Advertiser

Stiles' decaf plants, which he had hoped to plant in the next year, would eliminate the need to chemically remove caffeine from coffee beans.

But his plans have been pushed back at least a year as Integrated Coffee Technologies seeks money to continue his research into shutting down the gene in coffee that triggers caffeine production. Once the decaf coffee plant is developed, it will take another two or three years before it starts producing a good crop of beans.

The company suffered a setback when technology and financial partner ForBio Ltd. of Brisbane, Australia, was liquidated in 2001. Integrated Coffee was able to secure needed patent licenses to continue its research since then, but like many private biotechnology companies, it has had problems attracting venture capital, Stiles said.

Stiles said the capital climate is improving and the company soon hopes to land at least a portion of the approximately $5 million needed to bring the plants to market. Based on prior work, Stiles said he's confident the company can overcome the technical challenges involved; the key concern is how will coffee produced from decaffeinated trees taste?

"You can't say for sure until you have the beans in the cup, but everything we've done so far tells us we can be successful," he said. "I think it's going to taste pretty good. Caffeine has a bit of a bitter taste to it."

If successful, Integrated Coffee would try to profit by selling farmers caffeine-free coffee plants and by licensing coffee houses and others looking to serve caffeine-free java. Integrated Coffee's caffeine-free products would target the upper-end of the market where gourmet and specialty coffees command premium prices.

That segment of the coffee market, which represents less than half of all coffee sales, increased from $7.5 billion in worldwide retail sales in 1999 to $8.4 billion last year, according to the Specialty Coffee Association of America.

A caffeine-free product would allow those who can't tolerate caffeine, or who are under doctor's orders to avoid caffeine, the pleasure of a good cup of joe, said Ted Lingle, executive director for the association.

"A certain percentage of the population really has an intolerance in their system to caffeine — any amount of caffeine impacts their nervous system," he said. "Definitely a caffeine-free product would appeal to these people."

Sales of instant decaffeinated coffee in the United States only represented 3.6 percent of the $6 billion U.S. coffee market in 2002. However, instant decaf sales are expected to rise steadily over the next year, from $223.4 million last year to $244.7 million in 2007, according to New York market researcher Datamonitor.

Integrated Coffee isn't the only company looking to tap that market by creating caffeine-free coffee plants. Researchers at the Nara Institute of Science and Technology in Japan announced last month that they've been able to engineer a robusta-variety of coffee plant to create beans with 70 percent less caffeine than normal.

Stiles said his work, which involves the more commercially viable arabica bean, so far is not under threat by similar work being done in Japan.

"That's more of an academic project than a commercial project," he said.

At Cornwell Estate Kona Coffee in Kailua, Kona, decaffeinated Kona coffee represents just 2.5 percent of sales. The company started offering the product for sale in 1999 and interest has increased slightly each year, said Bruce Cornwell, owner of Cornwell Estate.

The coffee, which is shipped to Switzerland for decaffeination then back to Hawai'i, sells for about a $4-a-pound premium over regular Kona coffee. While the decaf version tastes good, it doesn't match the full flavor of regular Kona coffee, Cornwell acknowledged.

He said farmers would be interested in a decaffeinated coffee tree if it were cheaper and resulted in better-tasting decaf coffee. Cornwell said he didn't see an aversion to genetically-altered foods as a factor.

"Farmers would grow it and it would save money as long as the flavor is there," Cornwell said.

Dick Petersen, director of marketing for the Hawaii Coffee Association, agreed that Stiles' techniques could help lower coffee production costs, but flavor will determine whether caffeine-free trees are a success.

"The jury is out on how well it tastes in the cup," he said.

Stiles' passion to develop a caffeine-free coffee started while he worked as a researcher at the University of Hawai'i College of Tropical Agriculture and Human Resources around 1991.

Hawai'i is the only state in the United States with a commercial coffee industry. Based on a mid-season survey of growers the state's coffee production is expected to increase 6 percent to 8.5 million pounds and $19.6 million in farm-level sales during the 2002-03 growing season, according to the Hawai'i Agricultural Statistics Service.

Stiles said he wanted to find a Hawai'i-oriented application for the growing field of genetic research. Integrated Coffee also is exploring methods of designing coffee plants that are more resistant to disease and that can be triggered to ripen on demand.

Coffee research "just seemed like an obvious thing to do with biotech," Stiles said. "When you put together the technology with the interest and expertise of Hawai'i coffee growers, I think it's the natural thing to do."

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.