Producer of Island-flavored tea finds partner in coffee
By Dan Nakaso
Advertiser Staff Writer
Dave Plaskett wrote a letter last year — a Hail Mary, deep in his own end zone, shot-in-the-dark letter — to the Hawaii Coffee Company, Inc., parent company of Royal Kona Coffee and Lion Coffee, looking for a way to take his own, tiny tea company to a new level.
Eugene Tanner • The Honolulu Advertiser
It worked.
Dave Plaskett, right, director of tea for Hawaii Coffee Company, looks over some boxes of tea with Luis Alvares of MAISA, maker of the $100,000 tea bagging machine.
Hawaii Coffee was well aware of the increased international attention on the health benefits of tea. In December, it acquired Plaskett's Kane'ohe-based, four-person company, Hawaiian Islands Tea Company.
With Plaskett on board as "Director of Tea," Hawaii Coffee Company has since arranged to distribute Plaskett's blend of iced, passion fruit tea through McDonald's 77 Hawai'i restaurants.
"We liked what we were able to sample," said Melanie Okazaki, marketing manager for McDonald's of Hawaii.
Hawaii Coffee officials also expect to have Hawaiian Islands Tea in every local supermarket this year. And they're on track to double Plaskett's sales by the end of 2004.
Even Plaskett's competitors say that the sale of his company represents the start of a new era for Hawai'i tea.
Plaskett's journey from small-time producer after seven years to a sudden, new alliance with a much larger company represents one man's acknowledgement that he could only do so much with limited money.
But it was also good timing for James Wayman, president and CEO of Hawaii Coffee Company, who had been looking for a way to take the company into a different direction: tea.
"Ever since I've been in the coffee business, which is 1985, they've been saying that tea is the next happening," Wayman said. "Well I've been waiting for tea to happen. It hasn't become a nationwide, across-the-board phenomenon. Up until now."
While his company is based on coffee, Wayman projects U.S. coffee sales will see only 10 percent annual growth. But tea sales are projected to jump 20 percent per year.
Hawaii Coffee has since invested $100,000 into a tea bagging machine from Buenos Aires, Argentina, that Wayman says is the first of its kind in the Islands.
It can churn out 110 bags per minute, speeding up production. It also will dramatically cut shipping costs, making the operation much more attractive for Hawaiian Coffee.
Even Plaskett's longtime competitor, Byron Goo of The Tea Chest, is pleased that Hawaii Coffee is getting more involved in the business.
Goo believes that raising the profile of Hawaiian Islands Tea beyond its tourist orientation and focusing more on local residents will benefit the handful of other, mom-and-pop tea producers such as himself.
"As a manufacturer, it gives Hawaiian Islands a leg up," Goo said. "I take my hat off to to them because they're taking a big risk and making a big investment, not only in their business but in our industry. It's an exciting time for the industry."
Goo has no intention of backing away from his tea business.
He and his wife, Satomi, decided to drop their Hawai'i real estate careers nine years ago while on their honeymoon in England, where they fell in love with tea.
"We sat down to afternoon tea in London and had a wonderful time," Goo said. "We looked at each other and said, 'Why can't we have this wonderful experience back home?' "
The answer — as Goo learned over the following 11 years running The Tea Chest — is that Americans are coffee crazy.
The Goos started their company thinking it would lead to retail shops where customers could sample the finest teas blended from ingredients imported from China, India, Japan, Sri Lanka and anywhere else producing quality tea.
"We were going to be the Starbucks of tea," Goo said. "We wanted a gourmet tea shop. Failure after failure later, we figured out that the market wasn't ready for this concept."
Instead, the Goos focused their four-person business on producing teas tinged with Island flavors such as lemon grass, Hawaiian vanilla and Maui lavender to market to restaurants and hotels, to accompany Hawaiian Island cuisine.
Around the same time, Plaskett was turning his scientific background — he's an archaeologist by training — to figuring out the flavor sources for the teas he adores.
He loved creating his own flavors, such as pineapple, mango and passion fruit, which he packaged into gift boxes.
Putting together the various ingredients meant importing them to the Mainland and then shipping the blended product back to Hawai'i for distribution.
Plaskett had no business experience. But he estimates he was able to control 60 percent to 75 percent of the local market.
Goo, again, was quick to appreciate Plaskett's efforts.
"Hawaiian Islands Tea came out with a beautifully packaged, single-serving tea bags that really made local tea into a gift product," Goo said. "They put Hawaiian tea on the market."
Like the other Hawai'i-based tea companies, Plaskett found himself running a "small company that's underfunded and not able to get product out there." He had no advertising budget and did what little marketing on his own.
So in October he wrote a letter to Hawaii Coffee Company that said, "I've come to the conclusion that I should join forces with a larger entity that can help me develop my business and has better access to capital than I do," Wayman remembered. "Would you be interested in talking?"
Wayman certainly was.
"I didn't know him at all," Wayman said. "I picked up the phone and gave him a call and set up a meeting for a couple of days later."
At the end of a second meeting with company officials, Wayman said, "we had hammered out a deal."
Hawaii Coffee's investment in the Argentinian tea bag machine means eliminating the back-and-forth shipping costs. Each shipping container costs $2,300 to transport.
Tea that would also take two to three months to blend and package can now be produced in just two weeks, making it fresher.
For Plaskett, selling his company means he can leave behind the tasks he had no training for, such as accounting, invoicing and sales.
Now he can focus solely on his real love: researching new tea tastes, based on Island flavors.
Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.
