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Global factors have positive impact on MauiGrown Coffee

By Staff | Apr 7, 2011

A “perfect storm” in the global coffee industry is helping MauiGrown Coffee in West Maui. Factors expected to boost business for the Lahaina company include a decline in coffee production worldwide, a recent inventory reduction of Hawaiian coffee and consumers’ growing demand for specialty coffees.

LAHAINA — Fifth-generation Lahaina farmer James “Kimo” Falconer said the global coffee industry’s “perfect storm” is helping MauiGrown Coffee’s 100 percent Maui Origin brand.

Factors helping to boost business for growers are linked to the scarcity of coffee worldwide, the recent inventory reduction of Hawaiian coffee and consumers’ growing demand for specialty coffees.

According to the International Coffee Organization, world coffee exports amounted to 8.77 million 60-kilo bags in January 2011, compared with 7.56 million in January 2010.

Brazil, the world’s largest coffee grower, is forecasting a harvest of 37 million bags this year — down 23 percent from 48.1 million bags in 2010.

Colombia, the second largest specialty coffee producer and the biggest producer of Arabica coffee, saw a 6 percent decline from 2009 to ’10. Coffee production in other countries, such as Guatemala and Nicaragua, has suffered from strong rains and other economic and environmental factors.

According to industry experts, coffee prices will likely rise as global demand outpaces supply amid declining inventory.

“There used to be significant difference between Colombian and Central American coffee price-wise,” said Falconer.

“Now, the price differential is insignificant — they’re almost equal. The ripple effect has got the big specialty coffee consumer, the U.S., scrambling and wondering where they’re going to source their coffee. And this is if everything remains status quo, which it won’t,” he continued.

“Emerging economies are really the big factor to consider. Brazil, for example, the third-largest emerging country behind China and India and also the largest producer of commodity coffee, is expected to become a net importer in the near future to accommodate their rising demand.”

According to Falconer, Hawaii’s coffee industry is also not immune to scarcity of supply and rising prices.

In Kona, last year’s bad drought has contributed to a short crop, down 30 to 40 percent in production. Growers also had to combat the Coffee Berry Borer (CBB), which may eventually have a measurable effect on their farms’ yield and the Kona brand.

The state Department of Agriculture has stepped in to protect the other islands from getting CBB by enforcing the fumigation of all unroasted coffees that are shipped inter-island — a costly procedure sure to show up in the price for Kona coffee.

Ka’u on the Big Island is not a big producing area (average 100,000 pounds green coffee annually); however, in the next five to ten years, Ka’u has the potential to rival Kona.

Currently, Ka’u sells its coffee for $11 per pound for some of its best hand-picked coffee, which has garnered various awards.

Coffee production on Oahu is less than 100,000 pounds, and Molokai has even smaller yields.

Based in Lahaina, MauiGrown Coffee is the only grower of “certified” Maui Origin coffee and the only producer of Maui Mokka in the world.

Falconer, in partnership with Kaanapali Land Management Corp., currently farms several varieties of Arabica coffees on over 400 acres in West Maui.

While MauiGrown Coffee will have a short crop this year — they estimate a yield of 230,000 pounds of green coffee — the best yields are projected in the harvest this fall.

Falconer said, “It’s akin to the saying, ‘If you build it, they will come.’

“We’ve made a number of investments to our operational and management practices, our fields are irrigated to better control crop growing conditions, we focus on quality control to promote a healthy crop and high cup quality, and we’re looking to the future by expanding our acreage to ensure higher yields. More importantly, we have a great product — exceptional varietals that continue to catch the attention of coffee

connoisseurs worldwide.

Consumption of specialty coffee is increasing, but the production of specialty-grade type coffees is not.

With the reduction of inventory in the world’s coffee supply and in the Hawaii market, it’s opened up opportunities for growers like MauiGrown Coffee, which is reaping the benefits of increased business.

Three years ago, the company sold its products primarily in Hawaii and had only a few customers from the U.S. Mainland and Japan. Today, in addition to their loyal and growing Hawaii clientele, the company has nearly 50 U.S. Mainland and Japanese customers.

According to longtime MauiGrown Coffee customers like David Gridley, president of Maui Oma Coffee Roasting Company, the 100 percent Maui Origin brand stands apart from other Hawaiian coffees.

“Kimo’s different varietals and method of processing the coffee is what makes MauiGrown’s products unique and diverse,” said Gridley. “The coffees have a depth in body and flavor that is rarely found in Hawaiian coffees.

“Being a farmer has gotten better recently. I’m glad this is happening in my lifetime,” said Falconer. “In the next ten years, our world’s food source will be getting real scary.

“Farmers will be extremely busy. We’ll continue to see a lack of inventory of food with steadily climbing prices, but I don’t see prices for coffee coming down anytime soon. I’m also optimistic that there’ll always be a market for Hawaiian coffee.”