Cafe au Lei


A carpet of tousled sugar cane covered these rolling hills on Kauai for a century, and even gave this dusty hamlet its name--"new mill." Today, orderly rows of emerald-green coffee trees slice across the fields.

Squeezed out of the sugar business by lower-cost rivals, Hawaii's farmers are taking their cue from the makers of designer jeans and the vintners of Napa Valley. Rather than raising another crop that will vanish like sugar into the vast commodity market, they have set their sights on gourmet coffee.

Few consumers care whether a spoonful of sugar comes from a cane stalk in Hawaii or a sugar beet in Minnesota. But a cup of coffee is another story, at least judging from the proliferation of espresso carts and coffeehouses across America's urban landscape this decade.

Hawaii, the only coffee-growing state in the nation, is poised to capitalize on America's blossoming romance with the bean. In the last decade, farmers on the islands of Kauai, Maui, Molokai and Oahu have all jumped on the specialty-coffee wagon, joining their cousins on the Big Island's Kona Coast who have long produced one of the world's most sought-after coffees.

The new growers hope to cash in on the cachet of Hawaii, as well as on the distinctive characteristics of the various beans, soils and microclimates of each island. Their target: consumers with label-conscious tastes who don't mind paying more.

"Some people like Calvin Klein and some people want Levi's," says coffee expert H.C. "Skip" Bittenbender, chairman of the horticulture department at the University of Hawaii. "It's a segmented market. That's what we are seeing with coffee in Hawaii. They are growing different varieties, in different locations, that are going to appeal to different people."

Although overall coffee consumption in the United States fell dramatically after 1960 and has stagnated in the 1990s, the gourmet market has exploded in recent years. The number of specialty coffee retailers mushroomed from just over 2,000 in 1990 to 11,000 last year, according to the Specialty Coffee Assn. of America.


Meanwhile, the value of Hawaii's coffee harvest has multiplied from $6.5 million in 1993-94 to an estimated $29 million for this year's recently completed harvest. Total volume of the latest crop of beans was about 9 million pounds, more than triple what it was four years ago, according to the Hawaii Agricultural Statistics Service.

The islands of Kauai, Maui, Molokai and Oahu, which produced no coffee at the start of this decade, now account for roughly two-thirds of the state's production and just over half the total value of the crop in Hawaii.

Although the new coffees sell for a fraction of the price of Kona, they fetch a premium compared with commercial canned coffee.

Borrowing from the wine industry, Hawaii's new growers are marketing their product as so-called estate coffee, meaning it is grown, harvested and processed on site to ensure quality.

Though names such as Molokai Muleskinner and Kaanapali Estate Coffee are still unfamiliar to most consumers, industry insiders are beginning to take notice.

"I talk it up as the wine of the tropics," says Paul Kalenian, founder of Armeno Coffee Roasters in Northboro, Mass., which now carries 13 Hawaiian coffees among its 70 offerings and supplies cafes as far away as Japan and the Netherlands. "Each of these coffees has quite a distinct taste. People have their favorites."


The Kona district had a lock on the Hawaiian coffee market until the beginning of the decade. Its feisty, independent farmers, who have cultivated their crop by hand since the 1800s, enjoy a venerable spot in the pantheon of world coffees: Rich, full-bodied Kona coffee is one of the most expensive brews on the planet.

These small, family-owned farms--average size is 3 acres--are clustered along a coffee belt in the misty uplands, where a cool dry season and a warm rainy season offer ideal growing conditions. The coffee is rain-watered, hand-picked and sun-dried. The prized beans are fetching record retail prices today, from $20 to $40 a pound, roasted.

Meanwhile, the fledgling estates on the neighboring islands have had to develop a newfangled way of growing coffee. Their large orchards, which are on drier land at lower elevation, feature drip irrigation and mechanized harvesting, a novel concept in the coffee world, which depends on cheap labor.

"If we were to pick a place to learn how coffee agriculture should be in the 21st century, it's Hawaii," says Ted R. Lingle, executive director of the Specialty Coffee Assn. in Long Beach. "Hawaii is playing a historic role. It is learning to solve the labor problem."

Since a mechanical coffee harvester had yet to be invented, Hawaii's new coffee producers modified blueberry harvesters. Vibrating mechanical rods poke long fingers through the branches, dislodging all the coffee cherries rather than just the ripe ones. This makes careful sorting afterward vital, something that is less important when coffee is hand-picked.

At Kauai Coffee Co., on the southern flank of the island, a painstaking multistage operation separates different grades of coffee. The process culminates with high-tech color sorters, whose electric eyes help reject any unwanted beans.

Kauai Coffee sells its coffee green (unroasted) to roasters and wholesalers, with the lower grades used for blends. A Brazilian coffee farm of similar size would employ upward of 1,000 workers during the harvest. Kauai Coffee makes do with 70 permanent employees, adding another 70 at harvest time.

For consumers scared off by Kona's sky-high prices, the new Hawaiian coffees may be an attractive alternative. The estates are quick to point out that they grow their own varieties and never pretend to be Kona. Still, some Kona devotees look down on the newcomers as pretenders to the throne, and are concerned they will dilute Kona's top-flight image.

"Growers need to be very careful not to just post the name 'Hawaiian' on it and automatically expect to get consumer acceptance," says Jim Delano, owner of Honolulu-based Lion Coffee, a wholesaler and retailer. "It has to be coupled with quality."

Most people in the industry consider the boost in Hawaiian coffee production a plus for all growers in the islands, including the Kona farmers.

"The greater the recognition of Hawaii as a coffee producer, the greater the potential for Kona," says Jonathan O'Bergin, Hawaii Coffee Assn. president and a Kona grower. "You need a marketplace in order to have a niche in that marketplace."

In late 1996, Kona growers suffered from a major scandal when it was revealed that an independent California distributor had been substituting cheaper Panamanian beans and passing them off as Kona.


After the disclosure, Hawaii growers succeeded in mandating state certification of all coffee grown in the state, by grade and island of origin. As a result, today's supply of genuine Kona falls far short of demand.

The state has also applied to register Hawaiian place names with the Patent and Trademark Office to give its coffees nationwide status--like that of Washington apples and Vidalia onions.

Hawaiian coffee now accounts for less than 1% of the world's production of specialty coffees, which means "there's all kinds of room to grow," says Lyle Wilkinson, vice president for operations at Kauai Coffee."

Although coffee trees cover only part of the land recently taken out of sugar cultivation, the crop has greater potential to generate local jobs and profits as it goes from cherry to pulped bean to milled, roasted and packaged product. That's an attractive prospect in Hawaii's flagging economy.

"Coffee is ideally suited for suitcase agriculture--meaning it can be converted into an item that can be carried away in a tourist's suitcase," O'Bergin says. "One hundred percent of the added value in the roasted product can stay within Hawaii."

Coffee is now Hawaii's fifth-most valuable agriculture commodity, after sugar, pineapple, macadamia nuts and milk. As their coffee trees mature, and the new growers hone their harvesting and processing techniques, the marketplace seems to be rewarding them.

The farm price of "nouveau cafe" has increased more than threefold in the last four years. Retail prices vary, but are close to $12 to $15 a pound, roasted.

"I think they all have something going for them," said Kenneth Davids, a national authority on coffee and author of "Coffee: A Guide to Buying, Brewing and Enjoying." "The new growers are very meticulous, very professional. Coffee rewards obsessiveness, just like wine. If they can keep getting money from whatever source it's coming from, I think they'll make it eventually."

In most cases, the estates are backed by the muscle of big corporations. Parent company Alexander & Baldwin Inc. and former partner Hills Bros. Coffee Inc. have invested more than $50 million in Kauai Coffee, whose 3,400 acres make up the largest coffee estate in the United States. Hills Bros., now owned by Nestle, bailed out of the partnership after Hurricane Iniki struck Kauai in 1992.

Although Kauai Coffee has yet to turn a profit, results have improved each year, and it has won some devotees.

"Kauai Coffee stacks up phenomenally well in the marketplace," said Jennifer Wellott, coffee buyer and roaster for Sutton Place Gourmet, a high-end East Coast chain based in Bethesda, Md. "It has such a wonderfully well-balanced flavor."

On the slopes above Lahaina, Maui, Amfac/JMB Hawaii's subsidiary, Kaanapali Estate Coffee, is cultivating four varieties of bean on 500 acres, under the watchful eye of production manager Richard Loero, a third-generation coffee farmer from Peru. Its "moka" variety, originally from Yemen, sells out each year.

On neighboring Molokai, Coffees of Hawaii takes the coffee on its 500 acres from seed to cup. Using both traditional and modern methods, it grows, harvests, processes and roasts the coffee, then packages and retails its Molokai Muleskinner and Malulani Estate brands.

The plantation offers mule-drawn tours of its property and this month opened a retail outlet in the tourist mecca of Waikiki.


The latest recruit to coffee is Westlake Village-based Dole Food Co., which recently began cultivating it on the sloping plains that tumble toward the ocean on Oahu's north shore.

"We have a tremendous advantage in Hawaii because we're part of the United States and we're plugged into the tourist market," said Dan Kuhn, chief operating officer for Coffees of Hawaii. "If we take advantage of that, we can sell all the coffee we want."


Perking Up Production

The sources of coffee production in the Hawaiian Islands have changes dramatically in recent years. Rival growers have sprung up in Maui, Molokai, Oahu and Kauai. Together, they now far outproduce the Big Island of Hawaii. Production, in thousands of pounds:

'92-'93 Maui, Molokai, Oahu and Kauai: 610

'92-'93 Hawaii (the Big Island): 1,790

'93-'94 Maui, Molokai, Oahu and Kauai: 940

'93-'94 Hawaii (the Big Island): 1,960

'94-'95 Maui, Molokai, Oahu and Kauai: 2,200

'94-'95 Hawaii (the Big Island): 2,100

'95-'96 Maui, Molokai, Oahu and Kauai: 2,900

'95-'96 Hawaii (the Big Island): 2,500

'96-'97 Maui, Molokai, Oahu and Kauai: 4,100

'96-'97 Hawaii (the Big Island): 2,300

'97-'98 Maui, Molokai, Oahu and Kauai: 6,400 (estimates)

'97-'98 Hawaii (the Big Island): 2,600 (estimates)


Top Commodities

Hawaii's coffee crop swelled sharply in value in 1996, the latest year for which figures are available, and it grew increasingly important as and agricultural commodity in the state's economy.

Product: 1. Sugar (unprocessed cane); Value, in millions of $: $108.1

Product: 2. Pineapples (fresh equivalent); Value, in millions of $: $95.9

Product: 3. Macadamia nuts; Value, in millions of $: $44.1

Product: 4. Milk; Value, in millions of $: $29.2

Product: 5. Coffee; Value, in millions of $: $20.8

Product: 6. Papayas; Value, in millions of $: $17.1

Product: 7. Seed crops; Value, in millions of $: $13.5

Product: 8. Eggs; Value, in millions of $: $12.9

Product: 9. Cattle; Value, in millions of $: $11.9

Product: 10. Anthuriums; Value, in millions of $: $7.1

* Source: Hawaii Agricultural Statistics Service

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