Harvest has begun in full force for the largest coffee producer in the United States located here in Kauai Hawaii. Just a short drive from our Kauai vacation rentals in the sleepy town of Kalaheo, the coffee trees are heavily laden with beans that are known in the industry at this stage as ‘cherries’.
This harvest will be different for the company and the nearly 100 employees. Earlier this year parent company Alexander and Baldwin sold its subsidiary to the venerable Italian firm, Massimo Zannetti. Speculators believe that after nearly 24 years in the fickle coffee business, the major shareholders of A and B stock had grown weary of losing money in agriculture.
Prior to Hurricane Iniki in 1992 McBryde Sugar, a subsidiary of Alexander and Baldwin decided to transition from sugarcane to alternative crops and selected Macadamia nuts and coffee. Despite a nearly 7 year waiting period from the time the seedlings are planted to first harvest. The company felt that it was a good alternative to sugarcane. Macadamia nut and coffee prices were high, the trees could grow on marginal lands, and both crops could be productive for 50 years. Best of all, the harvest is almost entirely automated, thus minimizing Hawaii’s high labor costs.
In the late 1980′s the company began in earnest transitioning fields from sugar to coffee and macadamia nuts when Hurricane Iniki struck on September 11, 1992. It devastated the macadamia nut trees whose shallow root system could not provide the structural support. Thus over the course of six months following the storm the trees slowly withered and died.
Despite the storm setback to coffee, it fared differently than macadamia nuts. Of the approximately 3000 acres in coffee, the variety they chose to plant in significant acreage was a Brazilian variety known as Yellow Catuai. Unlike other varieties of coffee it could be be grown and cultured as a hedge, making it the only Arabica variety that could be mechanically harvested. Coffee is a deep rooted crop, it withstood the high winds and despite the wind damage. The growers were able to prune the trees to 2 feet above ground. Not an unusual remedy, this is a practice that the growers do every five years, to prevent the trees from becoming too large and stringy, thus hampering mechanical harvesting.
McBryde Sugar Co. had a partner in the coffee venture, Hills Brothers Coffee, a subsidiary of the Swedish conglomerate, Nestle Corporation. Hills Brothers agreed to invest nearly 30 million dollars into the operation. In return they would own the crop each year for their blended premium coffee products. No doubt the marketing allure of Hawaiian coffee blends proved attractive, if this new variety was as good as Kona coffee it would be a great investment for Hills Brothers.
After nearly seven years of tending, fertilizing and cajoling the crop in these productive soils, Hills Brothers finally had the taste test they had been awaiting. They brought in their experts and they had their first ‘cupping’ of the young crop. It did not go well. Hills Brothers was not impressed with the quality, and they walked away from the venture and their 30 million dollar investment.
Following the Hills Brothers bail out, a great many people asked why higher quality, commercially proven Arabica varieties were not planted. The answer was simple, these varieties could not be mechanically harvested. Agricultural labor is in short supply here on Kauai, and even the most experienced pickers can collect only 200 pounds of quality ‘cherries’ per day. An almost daunting task when you calculate that one coffee plant can produce 70 pounds over a 10 week harvest, and there are more than 13,000 plants per acre.
In the years since taking over the crop, Alexander and Baldwin never was able to overcome quality issues with their product in the superior coffee market. They learned that great growing conditions cannot improve weak varietal characteristics. However they work with what they have, adjusting the harvest each year depending on their delivery contracts. They found a steady market for their cop with confectioners in both the Asian and North American markets, only harvesting as much as they could sell. They learned quickly that warehousing previous crops were not economical.
The sale of the company to the Italian conglomerate, Massimo Zanetti has given a new burst of energy to the employees I have spoken to, much needed investments in infrastructure have bolstered their spirits. However, they recognize the challenges facing anyone in agriculture, both on the farm and in the marketing world.
Tell us what you think of Kauai coffee. Is it worth the price? Is it your favorite morning drink? We welcome your comments.