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Kona Blends
16 February 2009


Kona coffee All coffee is greatly affected by growing conditions and the conditions in Kona are perfect.  The Kona coffee district is a tiny little region on the Big Island of Hawaii with the exact micro climate and soil conditions required for growing wonderful coffee.  This makes Kona coffee one of the rarest and best coffees in the world.  Any time you have a high quality product that is rare, you will have problems with adulteration and fraud.

If you purchase Kona coffee from a store anywhere other than Kona, you are very likely purchasing a Kona Blend.  Here in Hawaii there is a state law that requires a minimum of 10% Kona coffee and the percentage has to be written on the label.  On the mainland there is no such law so a "Kona Blend" might be 0% Kona coffee.  Even at 10%, that means a Kona blend is 90% cheaper filler beans.  If it's 90% something else then should it be called Kona coffee?

Blending, whether it is with coffee, fruit juice, imitation crab, peanut butter and chocolate, or any other product, is a natural part of food preparation.  Certainly the mere act of blending should not be outlawed.  I do not have a problem with Kona blends and I think they have an important place in any free market.  What I do have a problem with is dishonest marketing.

In 1996, a Kona coffee blender by the name of Michael Norton was convicted and sentenced to 30 months in prison.  He perpetrated what is known as the Kona Kai scandal and it has had a serious effect on all specialty coffees, especially Kona coffee.  From 1993-1996, Michael Norton imported 3.6 million pounds of inexpensive coffee from Central America, mostly Panama and Costa Rica.  He relabeled this less expensive coffee as "Pure Kona Coffee" and sold it from his Berkeley, California business as Kona Kai coffee.

Bacardi
Bacardi Blend
$1000
$1000 Blend
Kitty
Kitty Blend
Norton's coffee scam was never deemed illegal although he did eventually pleaded guilty to one count of wire fraud and one count of tax evasion.  He made over $15 million dollars from this fraudulent scheme but paid less than $1 million in restitution and delinquent taxes.  As for the other $14 million, I suspect that Michael Norton got out of prison long ago and has managed to keep most of his considerable plunder.  He has always denied cheating his customers, claiming that they purchased "Kona Style" coffee and that is what they received.

The Hawaii Department of Agriculture now has a trademark on the phrase "100% Kona Coffee" and the Hawaii state law that requires a minimum of 10% is another step towards honesty but the issue is still far from settled and there are plenty of heated debates on both sides of the issue.

Some Kona coffee farmers feel that only 100% Kona coffee should be allowed and everything else should be illegal.  In my opinion, that is short sighted, unrealistic and selfish.  Some Kona Blends can actually be quite good and all Kona Blends certainly help spread the Kona name.  If it weren't for Kona Blends, most consumers wouldn't even know about Kona coffee.  The mere act of calling it a "Kona" blend infers that Kona coffee is something special.

The large blenders often fight any legislation that restricts blending.  They have defended their right to sell whatever they want and call it whatever they please.  I have no problem with that as long as they clearly state what it is that they are selling.  Let the consumer decide whether or not to buy it.  As a consumer, I want the choice.  I just don't like misleading labels and I think that refusing to list a product's ingredients is dishonest.

Currently, Hawaii Coffee Company is the largest Kona coffee blender in the state.  Their coffee is sold under two brands:  Royal Kona Coffee and Lion Coffee.  They clearly label their blends as 10% Kona Blend and they also sell more 100% Kona than anybody else.  Jim Wayman is the president.  I've met him a couple times but I don't think he remembers me.  After all, he runs a multi-million dollar company and I'm just a small time farmer that can't even afford to replace his crappy tractor.

Jim Wayman, among others, opposed a recently introduced Hawaii legislative bill (HB931) that will raise the percentage of Kona blends from 10% Kona to a minimum of 51% Kona.  The primary argument against this bill is that it will raise prices and therefore lower sales.  I heard the words "crisis" and "ruin" but I'm not sure I see the correlation.

Raising the minimum percentage will certainly decrease the profit margins on blended coffee but I'm not convinced that it will have a negative impact on sales of 100% Kona coffee.  The blenders would certainly sell less coffee and that would likely impact the price of coffee cherry (i.e. farmer income).  Exactly what effect it would have is debatable so let's do the math...

A pound of 10% blend currently costs the blenders about $3.70 (and sells for $16) while a pound of 50% would cost about $6.50.  Certainly that cost increase would be reflected in the retail price which would likely decrease sales of Kona blends.  But, unless it decreases sales by more than 40%, there would actually be a higher demand for Kona coffee which would raise the price of cherry (i.e. farmer's would make more money).  If that's the case then I don't think "crisis" and "ruin" are the correct words to describe the situation, at least not for Kona coffee farmers.

Such a drastic percentage increase could cause all sorts of unforseen changes, good and bad.  There's no telling what would really happen and nobody has ever presented me with convincing evidence one way or the other.  If we're going to change the legislation, I think baby steps would be a much more prudent approach.

UPDATE:  The proposed bill (HB931) never even made it to committee.  Indeed, it had so many drastic changes it's almost as if it was designed to fail.  I would like to see a higher minimum blend percentage yet when it came to a vote, I opposed the bill.  I felt that the bill, as written, was simply too reckless.  I would happily support a more cautiously written bill, especially if it was backed up with a fair and thorough market study.

There is more at stake than just blend percentages.  I was recently telling a friend how McDonald's looked into selling Kona coffee because it is the only specialty coffee Made in America.  Even if the entire Kona crop was sold as 10% blend, there's still not enough to supply McDonald's so they dropped the idea.  My friend said that McDonald's does sell Kona coffee and even produced the cup she had purchased that morning as evidence.

Kona Blend What McDonald's is selling, right here in Kona (but not on the mainland), is "Royal Kona" coffee.  Royal Kona is a brand name.  Nowhere on the cup did it say it was Kona coffee.  Is that deceptive marketing?  Should Royal Kona be allowed to use the name Royal Kona on non-Kona coffee?  What about the name Kona Earth?  We only sell 100% Kona coffee so should we be able to use the name Kona Earth or should the government force me to change my company's name?

In addition to the increase from 10% to 51%, the new bill would also require all coffees origins to be listed on the label and it would be illegal "to use the name of a geographic origin on any coffee label as part of a brand name or otherwise".  If this bill was passed as is then after July 1, 2011 the name Kona Earth would become illegal even though we only sell 100% Kona coffee.

Point of origin legislation isn't new.  Sparkling wine can't be called Champagne unless it is from the Champagne region of France.  California wine growers require 75% of their grapes to be from California.  Jamaica Blue Mountain coffee is very strictly controlled by the Jamaican government.  Point of origin legislation definitely has it's place but it can also get out of control.  I've spoken with some Jamaican coffee farmers and I certainly don't want that kind of strict government control here in Kona.

If Michael Norton of the Kona Kai scandal hadn't done any wire fraud or tax evasion, chances are he'd still be selling 0% Kona coffee to unsuspecting consumers.  He was stopped but unfortunately he's not the only dishonest person doing business.  I've seen packages of Kona Style coffee that contain 0% Kona coffee.  Anywhere other than here in Hawaii, that is totally legal.

As much I would love to stop all the dishonest people, I don't want the government telling me what to do.  I seriously doubt the current legislation will be passed and I'm fine with that because I'm afraid it changes too much all at once.  Maybe outlawing all Kona blends really would ruin the demand for Kona coffee, or maybe the demand will go through the roof, there's no way to know for sure.  Either way, I'll continue to sell only 100% Kona coffee and if I ever do sell anything else, I will say exactly what it is.

Beauty
10% Beauty Blend




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