How the economic slump affects coffee sales

Hawaii grows more than 8 million pounds of coffee a year. Thousands of acres are planted with coffee trees, ranging from brand new to more than a century old. How are Hawaiian coffee sales affected by the economic downturn of the past year? In any situation where people try to conserve their financial resources, there will be some price points that suffer because people switch to buying something less expensive. If you sell the less expensive choice your sales could actually improve. I recently mentioned a possible example of this in which a clerk at a Bose store speculated that people were buying top-of-the-line Bose speakers, radios, headphones, and so forth as a less costly alternative to going on a cruise. It later occurred to me that my father did this in my childhood. Under pressure from Mother and us six kids to quit smoking, he finally told us all he would quit on his vacation. That June he took three weeks off, quit a heavy smoking habit cold turkey on the first try, and spent much of the vacation napping on the couch. Because we weren't spending money traveling somewhere, Dad was able to buy a trunkload of backyard toys to keep us occupied, including a badminton set and a croquet set which both gave us pleasure for years. Jim Wayman, president of Hawaii Coffee Co., the firm behind the Lion and Royal Kona coffee brands, has described something similar from his own business in the current downturn. Some people who used to buy two $5 lattes a day, deciding $50 is too much to spend per week on coffee in a recession, have begun spending $20 a week buying his 100% Kona coffee in bags at the grocery store. "They saving money," he said, "and upgrading to the best coffee in the world." This isn't helping everybody, though, because there are other households that formerly bought pure Kona on a regular basis and now they've stopped for economic reasons. Overall Kona coffee demand is down, and with it the price. Other Hawaiian coffees, which are premium-priced but always less than Kona, have also seem demand slacken off, ameliorated in some cases by households that economize by switching from Kona to non-Kona Hawaiian coffees that may not taste as good as Kona but still taste better than commodity coffee does. The overall trend is still for leaner times. This year's Kona coffee crop is one of the smaller ones, both in total volume and average bean size, but Kealakekua coffee grower Tom Greenwell, whose family has farmed or ranched in South Kona District since the 1800s, says this year's harvest tastes really good. All farming is trickier than it looks but coffee is an especially complex business because the consumer is particular about flavor and there are countless ways the product can go wrong. Coffee growers, for example, argue about the comparative merits of sun-drying versus putting the beans in commercial dryers. Machine drying is faster and less labor-intensive, but some Japanese and European buyers like to advertise sun-dried products, and some processors feel that partial sun-drying produces beans that won't stick to the inside of the drum once they're put in the commercial dryers. The coffee tree is a fruit tree. It flowers in the spring. Sometimes the timing of rain can trigger multiple flowerings on a single tree. It gets tired after a few years but comes back to life if you pare it way back. It's sensitive to sunlight and likes shade. It needs rain, but not too much and not too little and not at the wrong times. The fruit of a coffee tree is called cherry, but unlike real cherry, where you eat the outside and throw away the pit, with coffee you throw away the outside and roast the pit and brew a beverage from it. A little stress doesn't bother a coffee tree and indeed causes it to divert nutrition into the fruit. The Kona coffee harvest begins in September and runs through March. But the outlying months are not a big part of the harvest. February and March put together can account for less than 3% of the total crop. The heaviest part of the harvest tends to be in October and November, and most years half the crop has been harvested by now. This year the bell curve has been even more extreme. Roger Kaiwi, general manager of Captain Cook Coffee Co., says 35% of the likely crop this season was harvested in a period of two weeks in early to mid-October. Some Kona processing plants were running 24/7 in that period and still couldn't handle it all. He estimates that almost 90% of the likely harvest has already come in as I write this Tuesday night. For so much of the crop to happen in so short a time means special financial as well as logistical challenges. Wayman's company had to come up with more cash in less time than usual to acquire the product he needed. Growers are finding that some of their buyers are slow pays in this economy. On the other hand, it was easier to find harvest labor because (1) some laborers couldn't find work in California and came here to pick, and (2) some local construction workers couldn't find their usual work and did this instead.