How Millions Of Pounds Of Coffee Are Processed At Hawaiian Coffee Farms | Big Business

nearly one million pounds of coffee get processed in a typical season at cao coffee mill on the island of hawaii but this warehouse is filled with nearly one million dollars worth of kao grown coffee beans and they aren't going anywhere by this time on a normal year that all would have been milled down and sold but since the the global demand completely shut down i'm still hanging on to that although hawaii accounts for less than one percent of the global coffee production on average it brings in around 50 million dollars a year but this year buy no more income no more revenue only expense that's right losing a lot it's going to be our breakthrough year that's what we were calling it we could see it we could taste it we could feel it and now that has just you know all basically gone away but coffee producers have no time to waste this year's harvesting season is well underway while millions of dollars worth of last year's crop sits in limbo although hawaii is primarily known for its kona coffee the crop is grown on five islands in eight regions and there are nearly 1 000 coffee farms throughout the state coffee's always been part of my life i think since i was about eight that's lou he's the general manager of kau coffee mill so we have unique weather and we have great soils down here we have very cool evenings very warm days and what that does it puts a lot of sugars into our coffee before that coffee gets poured into someone's cup it gets harvested from a coffee plant like this one harvesting is a labor-intensive process with a countdown once the coffee cherries ripen we have to do something with it immediately it only lasts 24 hours when coffee cherries ripen they are hand picked and loaded into 100 pound bags the majority of lou's coffee cherries go into what's called the washed process where they are converted into parchment basically entails going through a flotation tank from there it's going to get sucked up into the pulper that's where we remove the skin in the pulp from there it goes into a demusler once it goes through the demusler we have removed all that slimy pectin layer goes into another flotation tank and then it's going to be transported over to the drying deck when it comes out of that process comes out of the wet mill it's 46 moisture you got to dry that down to 9 to 12 percent after drying in the open overnight the parchment is loaded into a mechanical dryer for 24 hours then we can move it into our warehouse lou estimates that he has approximately 90 000 pounds of coffee parchment in his warehouse waiting for the final steps we store it until we need to mill it into green beans when lou is ready to convert the parchment into green bean it heads to the dry mill that dry milling process does several things so first it's going to hull it it's going to polish it then it goes into a classifier which pulls out all the different sizes from there the green bean heads to the gravity table beans that are too light because they are over ripe under ripe or damaged by pests float to the top and are discarded the rest of the top grade product continues on to the optical sorter which removes any remaining impurities coffee is one of those products that any little defect is going to throw off your cup this is what will eventually get roasted and become what we know as coffee in a normal season coffee mill will produce close to 160 000 pounds of green bean which gets sold to coffee shops and roasters throughout the state and internationally it was up 30 percent over last year and then the pandemic hit the pandemic took hold just as last year's harvest was ending in kau while farms in regions like kona wrapped up their harvest in late december the harvesting season in kau runs through march and april so when this pandemic hit most of the kona folks kind of had gotten rid of their crop already where we were just starting to sell i generally saw most of my bull product in the first quarter of the year and by that time things were already shutting down across the globe and so that causes a lot of a lot of issues lou was also forced to close the retail shop on march 19th i estimate that's roughly a little over six hundred thousand dollars in lost revenue that we've had just because our visitor center has been shut down to make matters worse this year's harvesting season has already begun while they are still trying to sell off last year's product and the longer that coffee sits in the warehouse the less valuable it becomes as that coffee sits there that's now become old prop and so it gets devalued it's a huge blow to our bottom line although kaou coffee mill grows and harvests coffee from its 86 acres of fields it also buys coffee cherry from local farmers but now that demand for coffee has dropped lou has been put in a difficult position you know i depend on these guys to to sell me coffee and they depend on me to buy it so it's kind of this whole symbiotic relationship and you know when one part of that whole system gets disrupted it can be devastating for the folks down the line i don't know how long more i can survive without help that's leo he owns a coffee farm just down the road from kahu coffee mill where he harvests about 250 000 pounds of coffee cherry every year the people that i supply didn't order coffee because of the pandemic i lost about 20 000 every month and now we start harvesting again for both lou and leo much of the drop in demand for hawaiian coffee can be attributed to one factor a dramatic decline in tourists unlike countries in south and central america which can produce coffee at a fraction of the cost and ship their products around the world the hawaiian coffee industry is dependent on tourism and visitor spending totaled nearly 18 billion dollars in 2019 but this summer was different visitor arrivals to hawaii in july 2020 fell by almost 98 percent compared with the same month last year people come here specifically because they've either heard about us through family and friends they've read about us they follow us on our website like the retail shop at the mill many of the businesses lou and leo sell their coffee to are dependent on tourists as well and as visitors to hawaii dropped so did the store's demand for coffee back in february we were having one of our best years ever and then all of a sudden somebody opened a trap door and we've been in a free fall since then nick is the owner of one of those stores he started maui coffee roasters almost 40 years ago it was established for need to roast kona coffee at that time from there we we just grew maui coffee roasters buys coffee from farms throughout hawaii which it then roasts and sells in store and to local grocery stores and cafes one of those farms it buys from is kaou coffee mill we buy green coffee for them in in 100 pound sacks normalcy would go anywhere from 50 to 100 bags and right now we're down to i think we just got in 10 bags at first we said well i guess it's time to close the business but after a couple meetings we decided we're going to try to weather it out though coffee shops have resumed service tourists have not resumed traveling which means fewer sales for everyone you know if we don't make it by january you know we might not be here an operation this size takes a lot of folks to keep it running and we need a certain amount of revenue to to keep this operation going unfortunately lou nick and leo have not gotten much help from the state or federal government although all three received ppp loans in the spring the operating costs of their businesses meant that money didn't last long we blew through that ppp money really quick you know because there wasn't that much one time they give me a ten thousand but i spend only one week no more so i need some more help and while coffee farmers were included in the latest round of the coronavirus food assistance program getting help might not be as easy as it seems because of the requirements and what they're asking of the farmers a lot of these folks aren't going to be able to glean money from that program nor are we because of the way the wording is in that for folks in kau their only hope of returning to normal operations depends on tourists returning to the islands and fortunately visitors might soon be arriving starting october 15th visitors who test negative for covet 19 within 72 hours of arriving in hawaii can avoid a two-week quarantine period it's created a whole new atmosphere here just by the people that live here everybody's got this hope all i can say is that kau is a very strong district the people are strong they have a long history of being fighters i know that tourism will eventually come back to hawaii i don't think it's going to be a quick rebound it's going to be a slow recovery but but we will recover [Music]

Channel: Business Insider

Views: 1,114,824

Rating: 4.8938107 out of 5

Keywords: Business Insider, Business News, Hawaii, Coffee, Hawaii Coffee, Big Business, Tourism

Id: kJvqg_lUaLo

Length: 9min 2sec (542 seconds)

Published: Sun Nov 15 2020

Reddit Comments

[u/Rob_of_bristol]

This popped up on my news feed today. I thought it was an interesting perspective on how it's not just the reduced demand from international chains that is affecting the coffee industry, in particular producers, but tourism at a more local level.

I don't buy a significant amount of coffee from cafes any more, instead buying more for home brewing, so this hadn't been immediately obvious to me.

[u/super_fluous]

I enjoy hearing about the economics behind coffee but obviously this is terrible news for the coffee industry there.

The video hit the nail on the head when they said Hawaiian coffee can’t be produced at the same prices as South American coffee so that means they really can’t export it as they aren’t price competitive. No doubt American trade wars (in addition to coronavirus) doesn’t help.

[u/coffeechipp]

It’s an interesting look at a very specific part of the coffee growing world. And it looks like these guys primarily depend on tourism sales rather than export which is interesting as the conversation I’ve had with green coffee importers (in the uk at least), seem to be running at around 80% of forecasted demand still (pre COVID). This certainly doesn’t show the coffee industry as a whole and more (IMO), a business that has neglected to diversify.

[u/[deleted]]

Yes kama'aina like anyone else are having it rough. Hawai`i is closed and should remain so.

Thanks for sharing. I wouldn't have found the video otherwise.

[u/Rib-I]

I have to wonder if, "the coffee shop" as we once knew it (i.e. a communal space people just hang out in) is on its last legs. When will you feel comfortable sitting in a cafe with your laptop or a book again? It's very sad for the whole industry and it ripples down the supply chain like this.

[u/Phorical]

Thanks for sharing, it's a very interesting look into that microcosm of the coffee industry. It seems like this industry, like most on the islands (conjecture there, but I think I'm right), is highly dependent on tourism. I'm hoping we get the vaccine distributed quickly enough that these businesses can survive.

[u/VonnieDeak]

Hopefully getting Kona coffee will get easier and it will cost less.

[u/jeffislearning]

lou sounds like my neighbor in brooklyn. he also goes to hawaii for vacation every year.