Sunday, January 26, 2014

Wine & Advertising: Turning a Principle on Its Head

I would like to open this article with a disclaimer: My conclusions will not apply to every wine maker in the world. No strategy or concept could apply universally to all companies in a given field. As will be obvious, Lafite Rothschild will have no use for this; and, equally obvious but for different reasons, a brand new winery that can only fulfill orders for a handful of cases per year may also wish to demur. But I am confident that to the vast majority of wine makers, as well as wine importers, distributors, and retailers, the conclusions that I reach are very apt and important to consider.

Riding on the Long Island Railroad last summer, I saw a poster advertisement for Vitiano wine. I soon noticed a few such posters around various stations and train cars. And being both the oenophile and the astute marketing student that I am, I came to thinking: "Why is this the only advertisement for a wine that I have seen in as long as I can remember?"

In many cases the answer borders on the anthropological. The Spanish wine business expert Juan Luis Barrera Portillo was kind enough to grant me an interview a while back. When I asked him why so few Spanish wine labels engage in marketing or advertising, his answer was clear: Spanish wineries are generally hereditary proprietorships owned by major families, which have entire portfolios of business interests of which a winery is but one item, and which tend to assign management positions based on familial, social, or political considerations, resulting in leadership that may not either know much or care much about wine – or about business, for that matter. There are upstart exceptions, but they remain mere exceptions.

No doubt that is the predominant situation in Spain, and probably elsewhere, too. But there must be other reasons. There are too many wine labels, including young ones, in too many locations around the world for that to be the only explanation. Many wine labels are only a few decades old at most, and come from places with major traditions of marketing, such as the western USA. And what about importers, distributors, retail chains, trade associations, and other organizations that one would expect to boost marketing efforts? Some importers are small, local sales- and operations-based outfits, but others, such as Pernod Ricard, Diageo, and Kobrand ought to be churning out more brand images and concurrent communications than students like myself would know what to do with.

Am I being unfair? Am I noticing a lack of TV commercials and train billboards, and blowing it way out of proportion? Let's consider how I may be off base. I believe that wine companies would generally defend themselves with two key points.

Firstly, they would say that they do engage in plenty of promotions, such as point-of-sale material and/or wine store tastings, PR work with relevant magazines and other media, cooperation with restaurants, hosted events at the winery, participation in group tours (and of course availability for individual visits), perhaps some social media, and the occasional brand ambassador. Many wineries regularly feature restaurants at their facilities, or at least a kitchen capable of servicing the needs of concerts, workshops, and other such on-site events. Baiting Hollow vineyard on Long Island even has horse stables.

All of this is great stuff. Wine drinking is, by and large, a personal and intimate experience. Engaging the customers, well, personally and intimately is not only a good idea but an essential one. Reach out to them at the stores by having a real, live person offer a glass and a conversation. Pop up with some news as they browse the latest stories and information in their magazines and Twitter feeds. Meet them at a tavern for a sip with like-minded aficionados. Invite them into your home, show them around, offer them a glass of something that they can watch being made, and show them a good time. It all makes perfect sense.

But that cannot be the end of it. Intimate promotions, social media, and PR are all key tactics, but another layer of marketing and advertising must take place, too. For every person who buys wine because he/she loves knowing everything about it, there is a person is buying wine despite not knowing anything about it. For every person buying wine for him/herself, there is a person buying wine for someone else. And for every wine drinker who is social about wine, there are wine drinkers who do not actually care too much. It is the same as with other products: some people go to car shows, others say they like cars but would never bother; some people read tech reviews for fun, others claim to be interested but do not even know what model computer they have; and so on. Wines, I assert, have to brand themselves and engage in broad advertising if they want to succeed in capturing the attention and patronage of this second half of the market.

And to that assertion, as well as to my earlier ones, I believe wine companies would respond with a second point that is, ironically, a major marketing trend – in fact, marketing principle – championed by industry moguls and industry gurus alike, and which a peon such as myself must surely have some gall to address so directly. Basically the concept is to market not less but less broadly; to find a niche and cater to it in a personal and direct manner. For those familiar with the diffusion of innovation model, the principle points to the innovators at the beginning of the bell curve and identifies them as they key targets of marketing efforts; by capturing them, the brand establishes itself as analogous with the product category, generates the best buzz, and sets itself up for eventual popularity among the majority.

As the famous marketing expert Seth Godin has put it, promoting "average products for average people" is something to avoid. The same old things for the same boring people – the market is saturated with such products, and nobody is inspired by a message that reflects such things. "Be remarkable," Godin sums up.

I do not know if Godin, and the other marketing experts who adhere to this principle, had the wine industry in mind when they came up with it, but it is surely a case study in avoiding average products for average people. In most product categories, at least mature ones, expensive premium brands are a small percentage of production, and most money is made by selling to the majority – not necessarily by selling "average products" with average features or average brand images, mind you, but by acquiring a majority of people to the feasible pool of consumers by rejecting the aura of expense and exclusivity. Wine is a rare category of product (diamonds are another) in which both appearing as expensive and hoity-toity, and backing it up with as premium of a product as possible, is seen as the natural way to sell to most people.

And yet, so many wineries and vineyards continue with so many of the same methods of demonstrating superiority, that an ironic paradox has arisen in which they all blend in with each other again. It is as if there were a crowd of people, and, hoping to escape the crowded conditions, the people decided to move away – but each and every one of them ended up moving to the exact same place. The tactic failed to serve the principle.

Consider just one aspect of an average wine's image: the label, which I bring up advisedly for a reason soon to follow. What can be less remarkable than a wine with a fancy label on the bottle; with a story about some old aristocrat, lucky wayward adventurer, or bored millionaire; with a picture of an estate worth more than my entire ZIP code; with tasting notes that illuminate little in return for reading so dense it feels like homework; and with excess script lettering and a fine line between legitimate information and faux verbiage? Sure, such a bottle looks extraordinary sitting in the average wine drinker's kitchen, but on the shelf at the liquor store it is quite conspicuously unremarkable.

Some wine labels try certain tricks, but seeing modern art on the label, or the words "Fat Bastard" next to a hippopotamus, may make me notice the bottle, but does little to illuminate its contents, and rather misses the point about why wines appear unremarkable. They appear unremarkable because, for the average person, all that there is to know about them short of having drunk them already is to stare at the sea of bottles flooding the aisle in the store. And that is the fault of the wine makers, importers, distributors, and retailers. It is also an opportunity for some to jump ahead of the rest by making the masses think of their wines before even entering the store.

Godin and his intellectual ilk were almost certainly not talking about advertising when they developed their ideas; in fact, Godin explicitly condemns old-fashioned, basic advertising. But if we distill their work into a principle and apply it to wine, then what we have is the need to push remarkable products to average people through mass media. In order for the principle to be served, it needs to be turned onto its head.

Now, a caveat here, to address what I think many readers may be shaking their heads about: For people who are into wine – sommeliers, connoisseurs, aficionados, and adventurers – the label means little, and advertising would not mean much more. They already know what to look for with a wine. If anything, mass advertising would appear crass. It would make the wine seem like it aims for the lowest common denominator, like it were some modern manufactured product instead of an authentic historical tradition. Those predisposed to extreme sentiments may even feel that no self-respecting wine maker would engage in advertising, and no self-respecting wine lover would appreciate it. Forget for a moment that advertising has not detracted from the grandeur of diamonds, whisky, and other fine products. Wine is different, is it not?

To say that advertising would ruin it, of course, would be to diminish the importance of what is ultimately inside the bottle. If the advertising would mean nothing to many people one way or another, that is fine – it is true for most product categories, in fact. I see advertisements for dish detergent all the time, and I do not care because I intend to stick with the brand I already use. That hardly means that dish detergents should not advertise. Similarly, people who are really into wine already know what to expect from different regions and varietals, maybe even from different years. Advertising is not for them. But what about everyone else? Remember, for every wine drinker who already knows what he/she likes, there is someone buying a bottle for a friend, or looking to experiment, or simply not sure what to get.

A wine brand (maker/importer/distributor) should want the customer to walk into the wine store already confident about wanting to buy that brand, about what will be found in the bottle, about what it will mean to him/her when drinking it or what it will say about him/her when gifting it, and about how he/she will feel afterwards. Needless to say, the quality of the wine itself is what is paramount, but aside from that, as with any other product, the brand image already planted in the consumer’s mind has its own huge role to play in the experience. Intimate promotions, PR, and social media all are important. But frankly, the best way for a wine maker to have its brand image and product stand out and be remarkable in a segment nearly devoid of advertising is to engage in advertising.

How would this work? Well, I, no average dope myself, saw that Vitiano poster ad, and… bought some. I probably would not have otherwise, having been at the time in the midst of surveying various French wines. But I saw the ad, and I thought, "A wine I haven’t heard of? It might be nice for a casual evening? Sure, I'm game." It may sound trite to talk about "raising awareness," "educating the consumer," and all that. But when the customer goes into the wine shop and looks for a certain wine already in mind, then it will definitely stand out from the rest just by virtue of that fact. The sale is mostly made.

Alright, you get it. Enough. About the Vitiano, by the way: Both red and white are Umbria IGT, and made by Falesco. The 2010 red was a little disappointing. It shows its youth still, and while the aroma is pleasantly sophisticated and in fact quite promising, the palate comes off a little harsh, abrasive, overly-acidic. Breathing helped, which means that there is potential. But the wine needs another 18 months in bottle to mellow out before it can be given a fair assessment; for now, it is not great.

But the 2012 white – that one I like. The aroma offers a crisp bouquet of florals and fruits. Specific notes include apple, lychee, snapdragon, and an umbrella of citrus under which the other notes frolic. I say frolic, because the personality that comes about is the best feature. It is vivacious, while still balanced, and enticing. It knows what it is doing, it knows what it wants, and it is going to have a good time going to get it. Kind of like a lovely cougar getting up to dance.

The palate is, in a keen twist, much more mellow than the aroma, but still quite delightful. There are notes of honey, apple, and florals, and the wine is a bit buttery. The citrus has all but disappeared, and the lychee remains around the edges. All in all, it is a cornucopia stretching from spring until autumn. The body is even and balanced. The wine is ever so slightly acidic.

Falesco is typical of wineries today: a decent spot of land, fair business, a variety of wines to offer. Many would say that the principle business of such a winery – or any winery, for that matter – is to continue to strive to improve their wines and produce the very best libation possible. That "R&D", let’s call it, and production, are certainly crucial focuses for a winery. But as with any business, it is also important to be proactive in bringing in customers. It is the right thing to do for the employees, for the vendors, for the viticulturists and viniculturists and their work, even for the industry as a whole – for all stakeholders. The work has to mean something, it has to have a chance at success, and it has to be underwritten. Advertising is the best way, in the context of the wine world today, to set a wine apart from the rest and get the customer’s attention. Look again at the poster from the train. There is nothing about it to detract from an image of authentic bucolic tradition; on the contrary, it is a lovely depiction of a pleasantly romantic scene, perfect for wine. Falesco and Winebow, the importer, did well to take the simple step of putting up some nice posters. Other wines should follow suit.

Monday, January 6, 2014

Organic Darjeeling Selimbong 2013 First Flush

Name: Organic Darjeeling Selimbong
Origin: Selimbong Garden, Darjeeling, India
Flush: First Flush
Harvest Year: 2013
Type: Black Tea
Purveyor: McNulty's
Preparation: One teaspoon steeped in about eight ounces of boiling water for 3 minutes, sipped plain

Has this ever happened to you: You learn, you practice, you learn and practice some more, you start to master, you work very hard and devote a ton of energy, maybe you even teach a little (or, perhaps, you really just pontificate to however many of your friends will listen), you build a reputation, you exhaust countless nooks and crannies of whatever the subject is, and then, when you think you are finally approaching the pinnacle, you stumble almost mistakenly into a big pile of knowledge or understanding that you never even thought to consider might be an existent phenomenon. It happened to me recently. Not that I ever thought I knew everything about tea, I promise. But the “insights” into which I tripped and fell head first were so simple that it is absurd I should never have thought to consider them. Some people emerge from the scenario above knowing that they have discovered new, uncharted depths and forever altered their fields of inquiry; in my case, on the other hand, the word “duh” is quite apt.

There were two new items of information revealed as I read up on Darjeeling tea. The first is that Darjeeling tea has a protected designation of origin, or “GI tag” (“geographical indication tag”), as the Tea Board of India calls it. Tea certified to have been legitimately grown in the Darjeeling region and processed properly receives a seal (seen below) from the Board to certify its authenticity, and no other tea may call itself “Darjeeling” or receive the seal. Wine and spirits of course have such things, and I learned last year that coffee does, too. I never even asked if tea might, and shame on me for that.

India has a few GI tags for tea, actually, including Assam and Nilgiri (as well as a handful of tea-growing regions without such commercial protection). But Darjeeling tea was the first to get a GI tag, and for good reason: people who drink tea have long thought it the best. As with most protected designations of origin, Darjeeling tea’s came about because there was a major problem with fraudulent labeling; that is, a significant amount of tea being sold around the world was labeled as Darjeeling but, in fact, contained little to no legitimate Darjeeling-grown tea. Naturally, this was because the “Champagne of teas,” as Darjeeling tea is known, was simply the most preferred among paying customers. Consequently, it became the first ever Indian product of any kind to receive a GI tag. To this day, Darjeeling remains the darling of the Tea Board of India, as any perusal of its website will show, and it is one of the very few single-region teas that mega tea brands (Bigelow, Twinings) market to the masses. Darjeeling tea’s fame and popularity endure, and for good reason.

The world’s producers of tea would do well, I think, to invest more time and energy into getting their products protected designations of origin, much as Darjeeling has. It is expensive and time-consuming, yes. But consumers generally are more informed about their products than they have ever been, and the legions of tea aficionados specifically are growing rapidly. The drink’s importance, once upon a time, used to be the fact that tea – any tea – was in the cup on such social occasions as tea time in Buckingham palace, a knitting club meeting in the American Midwest, or anything in between. The details of the tea were rarely a matter of comment, and if they were, it had to do with outside flavoring, such as with Earl Grey. Such things are still of great import, of course. But they are not the future. In the face of plateaued interest in tea as a centerpiece of formal gathering, tea is experiencing increased technical interest: Where is the tea from? What kind of tea is it? Is it authentic? How was it processed? Is it organic and/or fair trade? How much caffeine is in it? What are its health benefits? What is the history of this variety? What else can I learn about it? These are the questions that people are asking, and a designation of origin, though certainly no simple or direct ticket to fame and fortune, is precisely the kind of thing that gets consumers’ attention and tells them what they want to know. And of course, it protects legitimate tea producers from fraudsters intruding upon their market share. It would only be a boon for consumers, producers, and merchants alike.

The other item I learned – and it really is preposterous that I never even thought of this – is that teas from different years’ harvests taste different. Not radically different by any means, but naturally different, according to the differing weather patterns, soil conditions, etc. that accompany the advance of time. This got me thinking: Why are teas, and coffees for that matter, not labeled with a harvest year?

With wine, it has always been standard procedure to list the year on the bottle, even for blends. But with coffee and tea, that was never really how it worked. There are craft coffee and tea movements aplenty, but consumers and professionals alike are so accustomed to the mass-produced blends, designed to reduce taste variation over time to practically zero, with which we all grew up and which we still encounter with great frequency, that it has not really been demanded of anyone to label coffee or tea as being from a particular year.

To the coffee and tea connoisseur, there is a better explanation for this that will occur immediately and appear quite obvious. Wine, you see, ages. It can be kept on the shelf for a few years, a few years more, decades perhaps, and either drunk, sold, or stored yet longer. Furthermore, wine is not even distributed before it has aged for a long while, usually a year at bare minimum. What with most serious wine consumers, collectors, and merchants having hundreds or thousands of bottles of wine on hand, procured after being stored at the winery for years in the first place, a harvest year on the label is a most convenient datum. Coffee and tea, on the other hand, are not meant for that. Tea may last a while in brick form, or if kept in airtight containers, but it is intended for more or less immediate distribution and foreseeable consumption. Coffee especially has a brief shelf life, being ideally drunk within a couple weeks of being roasted. But let’s be generous and stipulate that the mass-produced coffee that sits in warehouses for up to months on end is somehow legitimate. Still, after a year or two, coffee or tea would almost certainly be no good unless kept in the very best of conditions. Which begs the question: what producer, merchant, or enthusiast would store coffee or tea away for so long in the first place? So why even bother with a year on the label? The coffee or tea is between one week and two years old, and either it tastes properly fresh or it does not. Isn’t that all that counts in this discussion?

My response to that is to return to the consumer profile described above. Casual imbibing of coffee and tea is as popular as it has always been, but not growing very much. It is not where the potential is in the market; it is not the future. Aficionados, on the other hand, are on the rise. More and more consumers are switching from major chains to craft coffee roasters and fine tea purveyors. More than ever before, they notice origins, processing methods, taste profiles, and numerous other data. They read the literature, and look for the new. Key here is that they record experiences more than ever: Is it only the emergence of the Internet that gave rise to Steepster and Coffee Review, or is it also the fact that people are there to take interest and participate in the first place?

By including a harvest year among the data for tea and coffee, merchants would not necessarily distinguish it from other tea and coffee sitting next to it on the shelf like with wine, of course. But, they would:

  • Confirm the freshness of the product.
  • Give consumers a sense of something new, thereby keeping up interest (“Oh, the 2014 Assam is here,” as opposed to, “Oh, Assam is here again.”).
  • Create the likelihood that reviewers will mention harvest years in their reviews. This sudden consciousness of a new variable would make them increasingly interested in continuing to consume from the same region to observe firsthand the differences and similarities among the years, as any good aficionado would be. It would also mean that readers of reviews would be drawn back into that product by becoming conscious of the new variable. (“Oh, is that what there is to taste from the 2014? It’s different than what I tasted that other time,” as opposed to, “Oh, is that what this guy tastes? It’s different than what I tasted that other time.”). Finally, producers and merchants can mine the data for all it is worth.


Maybe it is the old product data manager in me (my old position when I had a day job, before I switched to a full-time school schedule), but I really do think that more attention to authenticating and publicizing the variables of tea and coffee is the best way to draw people in to the product.

Anyhow, on to the good stuff: It is time to explore the tea that finally got me to learn and think. McNulty’s was kind enough to confirm for me that this tea was harvested in 2013. The dry leaves of the Selimbong garden’s first flush are rather pastel hued, dark, all twisted tightly but alternately curled up or straight and long. Packed into the glass jar, the visual texture is akin to that of a Van Gogh painting. In stark contrast to the Darjeeling leaves that I reviewed in 2012, which had an aroma like wine and fruit, these leaves smell like a rainforest. There is some caramel, some tannins, some traditional florals, but mostly the rich maltiness that one might expect from, say, a huge mouthful of the dry leaves.

The brewed Darjeeling tea has a rich, smooth, brown color, like a deep, dark honey. The aroma is of sweet, sweet florals. Specific notes are smooth and include principally honey and flowers, with light hints of toffee and caramel as well. The palate offers a light body, although I was not confident noting that at first because there is such a thoroughly generous symphony of flavors that together with the malt they actually make the body of the tea seem rich! It took a little while before my mouth was able to sort it all out. Truly it is a most impressive, sophisticated, and unique tapestry that is woven, and I was reminded yet again why Darjeeling tea is my favorite black tea. (Well, some would say it is an oolong, but you know…)

Could it be that in my prior Darjeeling tea review, when I thought the tea was rich and thick, I was deluded by a similar phenomenon? I suppose it is quite possible.

The tea is not too acidic, not too tannic, not too malty (although the malt augments some as it cools), and not too brisk: just enough of each. The prior Darjeeling tea had some fruit flavors that are absent from this year’s crop. The 2013 offers good floral notes, though they are not quite as sweet as in the aroma. The flavor notes are of toasted things: toasted toffee, toasted caramel, even toasted marshmallow. Again, the body of the tea is light. It has a light body and constitution, even a light heart and soul – the flavors are bright, sprightly, and numerous. It is really curious how such a light body flatters the swirling bouquet of spirited tasting notes. The palate is balanced and even throughout, but it smooths out as the tea cools. The finish is of caramel and florals, with a drop of honey.

I recommend to all of my kind readers to get some Darjeeling tea – authentic Darjeeling tea, that is – and compare it to teas past and teas future. It will make for an exciting, and delicious, adventure.

Friday, October 25, 2013

Hawaiian Coffee

No, alas, I did not actually taste any Hawaiian coffee. It is difficult to find freshly roasted samples where I live. But I did write a research paper about the economics of it.

Just to give proper context: The paper was written for my MBA class at Baruch College called "Global Competitiveness of the US Economy," and the assignment was as follows:

Select a large exporter or product / commodity that is being exported from the United States. Analyze the historic background of this exporting business, its current strengths and weaknesses in its main overseas market, how is it hurt or hindered by government regulations, tariffs, currency and culture in expanding its overseas sales. Include also its main international competitors and the advantage those competitors have from government regulation, currency, etc. The paper must include a relevant “review of the literature.” (1,750 – 2,250 words)

Needless to say, in 2250 words I cannot produce a comprehensive analysis of everything to do with Hawaiian coffee. It ended up being a mere broad overview. Nevertheless, this paper is relevant to The Nice Drinks In Life, and now that it has been submitted, graded, and returned to me, I would like to share it here with my kind readers. The text, notes, and appendices are not changed from what I handed in to the professor other than one redaction (when I interviewed a source, he/she was not told that I might ever publish this). I have not expanded upon it for this website due to the same factor that keeps me from publishing more often in the first place: I simply lack the time.

Should anyone have any further insight into the matter, or any factual corrections, I would love to hear about it in the comments section below.

And for the incurably curious, I received an A- on the paper.




Hawaiian Coffee
Governmental & Market Conditions



A Brief Introduction
Within the world of coffee there are two principle types: “arabica” (Coffea arabica) and “robusta” (Coffea canefora).[1] Arabica, preferred for drinking, has many sub-species, or varietals: Typica, Caturra, etc.[2] Coffee is cultivated in over fifty tropical nations.[3] Brazil grows more coffee than any other country, producing about a third of the world’s coffee.[4] In aggregate, coffee is traded globally more than any other commodity besides oil.[5]

Much as with wine, both a coffee bean’s varietal and its region of origin are of much interest to coffee consumers and professionals.[6] Therefore, coffee as a general category is not strictly fungible. In fact, one given region’s coffee harvest may trade at a different discount or premium than other regions’ coffees.[7]

Hawaii first saw coffee planted in the early 1800s[8] and is the only US state to grow it (although Puerto Rico, a US commonwealth, grows it, too).[9] Many different varietals of arabica are planted there.[10] Most Hawaiian islands grow coffee, although it is Kona, a thin strip of a region in the Big Island of Hawaii,[11] that has the most popular crop.[12] The region has a unique micro-climate that lends a certain quality to its coffee, whereby it has come to be known as the “coffee belt”.[13] That is not to sell the other Hawaiian regions short; some professional coffee roasters are in fact negative on Kona, preferring different Hawaiian coffees such as Ka’u.[14]


[1] International Coffee Organization. “Botanical Aspects”.
[2] Ibid.
[3] National Coffee Association USA. “Coffee from Around the World”.
[4] The Economist Editors. “Brewed Awakening”.
[5] Black Gold Movie. “Economics of Coffee”.
[6] National Coffee Association USA. “Coffee from Around the World”.
[7] IntercontinentalExchange. “Coffee C® Futures”.
[8] Hawaii Coffee Association. “Coffee History in Hawaii”.
[9] Huffington Post Editors. “Hawaii Coffee is the Only American-Grown Coffee”.
[10] Bittenbender & Smith, 2008, p3.
[11] Please see maps in Appendix 1.
[12] Huffington Post Editors. “Hawaii Coffee is the Only American-Grown Coffee”.
[13] Bittenbender & Smith, 2008, pp5-6.
[14] Personal interview.

Governmental Conditions
In the same way that many wine regions’ names are protected by regulations forbidding any wine not produced from certain varietals and within specific borders from using them, the phrase “Kona coffee” is protected.[15] Only the “Kona typica” varietal grown within the Kona region may refer to itself as “100% Kona”.[16] This has generally succeeded at nixing sales of fraudulently labeled Kona coffee.[17] However, there is one key caveat: any blend containing as little as ten percent Kona coffee may refer to itself as a “Kona blend”.[18]

No other Hawaiian zone has a protected denomination; however, many other coffee regions do. The Marcala region in Honduras famously became the first in Central America to be awarded such a status.[19] Starbucks made some waves when it traded on the good name of Costa Rica’s Tarrazú region to sell $7 cups of coffee.[20]

The US federal government provides subsidies to Hawaiian coffee farmers.[21] Some competing coffee-producing nations, such as Brazil[22] and Colombia,[23] also provide such subsidies, and more are considering it.[24] The federal government also provides crop insurance to Hawaii’s coffee farmers,[25] however, this does not necessarily benefit them. Between 1995 and 2012, they in aggregate paid $103,072 more into the program than they took out of it.[26]

The State of Hawaii provides some assistance to the coffee farmers, but it is rather negligible. In June 2013 Governor Neil Abercrombie signed a bill offering a collective total of $550,000 over two years to help combat a pest.[27]

The US federal government does not restrict the amount of coffee that may be imported,[28] nor does it charge import duties on the crop.[29] It does inspect imports for quality,[30] increasing consumer confidence in imported coffee.

According to a recent agreement between Japan and the US, each will officially recognize the other’s organic certification beginning 2014.[31] This is important, because many Hawaiian coffee farms have that certification, and Japan, in addition to being Hawaii’s main coffee export market,[32] is a growing coffee market generally,[33] its traditional tea culture notwithstanding.


[15] Kona Coffee Farmers Association. “About Kona Coffee”.
[16] Ibid. The Kona Coffee Council has a seal of approval to certify that a coffee is 100% Kona (Kona Coffee Council. “The Seal Program”) or the Hawaiian state government, which actually owns that trademark, may certify coffee itself (Mountain Thunder Coffee Plantation. “Kona Coffee History”). Any coffee that is going to carry the 100% Kona mark must be inspected and certified before ever leaving the region (Mountain Thunder Coffee Plantation. “Kona Coffee History”).
[17] MakeGoodCoffee.com. “Asian Coffee”.
[18] Kona Coffee Farmers Association. “About Kona Coffee”. Blending different coffees is a standard – in fact, artistically important – practice among roasters and purveyors.
[19] Café Marcala. “Denominación de Origen Café Marcala”.
[20] Mencher, 2012.
[21] Environmental Working Group: Farm Subsidy Database. The database is searchable by ZIP code. I entered a randomly selected ZIP code encompassing Hawaiian coffee farms, and searched through the results. All farms whose information I browsed have received federal subsidies at least once in the last ten years. The subsidies seemed minimal at first, but not after considering the relatively small acreage of typical Hawaiian coffee farms.
[22] Kayden, 2013. What with Brazil’s tremendous coffee production, keeping up with subsidies is no minor factor.
[23] Delgado, 2013.
[24] Garcia, 2013.
[25] Environmental Working Group. “Crop Insurance”. The insurance covers indemnities, reimbursement for lost administrative and other expenses, and so on.
[26] Environmental Working Group. “Crop Insurance Total Costs by Crop in the United States”.
[27] State of Hawaii Department of Agriculture. 2013.
[28] U.S. Customs & Border Protection. 2013.
[29] Duty Calculator. “Import Duty & Taxes for Coffee Beans”.
[30] Lister, Jonathan. “Regulation of Coffee Retail Market in USA (eHow.com).
[31] Bishop, 2013.
[32] Krishnakumar & Chan-Halbrendt, 2010.
[33] International Coffee Organization. “Imports of All Forms of Coffee by Selected Importing Countries from All Sources” (updated June 2013).

Market Conditions
Hawaii produces relatively little coffee. Coffee exporting countries produced roughly 145 million 60-kilogram bags of coffee, or over 19 billion pounds, in 2012.[34] Hawaii grows less than 10 million pounds per year,[35] between one-third and one-half of it coming from Kona.[36]

A small percentage of Hawaii’s coffee gets exported, mostly to East Asia, especially Japan.[37] Japanese-Americans are strongly represented in Hawaiian coffee production, and easily establish rapports with Japanese customers.[38] But exporting elsewhere has proven to be challenging, despite a dearth of import duties and restrictions for coffee in most countries.[39] Price is the major reason for this.

Pricing is principle among Hawaiian coffee’s competitive disadvantages: it is so expensive that many professionals and aficionados do without it altogether.[40] In markets with low disposable incomes, it is a deal breaker.[41] The cause of Hawaiian coffee’s high price is multifaceted. One item is the cost of farming in the US.[42] Another is that every competing coffee-exporting nation has much cheaper currency than the US.[43] Still another is the pattern of small farms with relatively low yields (see below). Finally, there is the need to maintain the image of exclusive, high-quality coffee associated with Hawaiian beans. Selling them cheap might ruin that image.

Hawaiian coffees have more disadvantages than just price. For example, Fair Trade certification is a popular item among consumers,[44] but Hawaiian coffees must compete without them.[45] Another disadvantage is the regulation permitting blends with 10% Kona coffee to be called “Kona blends”. Many consumers, not knowing any better, purchase such products thinking that it is legitimate Kona coffee, ultimately profiting competing regions at Kona’s expense.

Hawaiian coffee has advantages, too. The Kona region’s protected denomination is one of them, the caveat notwithstanding. Another is its high quality, in terms of both integrity and flavor. In June 2013 it was reported that “the Board of the Kona Coffee Farmer's Association unanimously voted to adopt and support Hawaii County Bill 79 to prohibit GMOs[46] on the island;”[47] public support of such ideas does much to inspire confidence in Kona’s, and by extension all Hawaiian coffees’, commitment to quality.

Furthermore, Hawaiian coffee’s taste is outstanding. Indeed, one cause of its high price, often overlooked when searching for institutional causes, is huge demand for a very scarce product. Even Kona naysayers have other Hawaiian coffees that they recommend.[48] There is one downside here, though: the growers get attached to the reputation. If they were open to producing lower-grade, cheaper products, such as coffee for instant preparation, they would likely do better in emerging coffee markets around the globe.[49]

Interesting is the rarity of Hawaiian coffee. It causes higher prices and an air of exclusivity, each of which circles back to the other. Small acreage imposes natural limits on the extent to which Hawaiian coffees can claim market share; however, the percentage of harvested coffee sold is generally high. In deciding whether the small yields are beneficial or detrimental, it helps to consider whether the farmers would like to augment them: As it turns out, at least a few farmers are frustrated at the low yields that poor weather has caused in recent years.[50] Certainly, the low yields mean the region cannot benefit from economies of scale, further raising prices – thereby furthering exclusivity, in an encore of the unending cycle.

Another item of note is the dearth of exports to Europe, especially Italy and France. None of them has import duties,[51] they have strong coffee cultures preferring dark roasts,[52] and Kona is especially well suited to being darkly roasted.[53] This may be a simple matter of marketing.


[34] International Coffee Organization. “Total Production of Exporting Countries” (updated July 2013).
[35] Exact estimates differ across reports, but the Hawaii Coffee Association puts the number between 6-7 million pounds (Hawaii Coffee Association. “Coffee History in Hawaii”).
[36] Krishnakumar & Chan-Halbrendt, 2010.
[37] Ibid.
[38] Ibid.
[39] Duty Calculator. “Import Duty & Taxes for Coffee Beans”. Japan is hardly the only coffee consuming nation without an import duty, and most of the nations that do charge one grow their own coffee anyway.
[40] Personal interview.
[41] Krishnakumar & Chan-Halbrendt, 2010.
[42] Rubinstein, 2008. American farms are quite capital-intensive.
[43] The top ten countries by production are Brazil, Vietnam, Indonesia, Colombia, Ethiopia, India, Honduras, Mexico, Uganda, and Guatemala (International Coffee Organization, “Total Production of Exporting Countries”).
[44] Fair Trade USA, 2013.
[45] Fair Trade certification is not available for American produce (Fair Trade USA. “Global Reach Map”). So, although Hawaiian coffees come from farms equally fair to workers (as per American labor laws) as Fair Trade proponents demand, they lack the certification and must compete against coffees that have it.
[46] “GMOs, or ‘genetically modified organisms,’ are plants or animals that have been genetically engineered with DNA from bacteria, viruses or other plants and animals. These experimental combinations of genes from different species cannot occur in nature or in traditional crossbreeding. … [A] growing body of evidence connects GMOs with health problems, environmental damage and violation of farmers’ and consumers’ rights.” —Non-GMO Project, “GMO Facts”.
[47] Unsigned. “Protect Kona Coffee from GMO: Kona Coffee Farmers Association Supports County Bill 79” (Hawaii Reporter).
[48] Personal interview.
[49] (Unsigned). “Planning to Export” (Business Beyond the Reef, December 13, 2011).
[50] Rubinstein, 2008.
[51] Duty Calculator. “Import Duty & Taxes for Coffee Beans”.
[52] Europeans’ notorious antipathy towards American coffee refers to American preferences vis-à-vis brewing and consuming it; it has nothing to do with bean varietals or origins (Askin, 2013).
[53] Personal interview.

Outlook & Conclusions
Hawaiian coffee deals with a variety of competitive problems, but is hardly set to capitulate. Not all of its disadvantages are unique, and some of them (low yields, pricing) are arguably advantageous in certain market conditions. Hawaiian coffee growers have access to US federal subsidies and insurance, and enjoy the benefits of a capital-intensive agricultural community. They are organized into associations that benefit all members. Also, very few other coffees enjoy the prestige of Hawaiian coffees; the “Kona blend” issue is surmountable by educating consumers, pressuring officials to change the rule, and other basic methods.

Hawaiian coffee, after two centuries of history, is set to enjoy two more.



Appendix 1: Maps

Map 1: Political map of the Hawaiian Islands, with Kona marked on the Big Island of Hawaii



Map 2: The Kona coffee belt & other coffee regions in Hawaii (marked in green)


Works Cited

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