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

Summary

The Ka'ū Coffee Mill on Hawaii faces unprecedented challenges due to the COVID-19 pandemic, with nearly $1 million worth of unsold coffee beans in storage. Despite Hawaii's small contribution to global coffee production, the industry heavily relies on tourism, which has been severely impacted. The pandemic's timing coincided with the harvest season, causing a significant drop in income and revenue for coffee producers like Lou Daniele and Leo Norberte. With the retail shop closed and a decline in demand, the future of Hawaii's coffee industry hinges on the return of tourists and potential government assistance.

Takeaways

• 🌏 Ka'ū Coffee Mill on the island of Hawaii usually processes nearly 1 million pounds of coffee in a season, but currently has $1 million worth of beans unsold due to the global demand shutdown.
• 📉 Hawaii's coffee industry, which contributes less than 1% to global production, faces a significant revenue drop with no income from sales, only expenses.
• 😔 The pandemic's impact on the coffee industry was particularly harsh as it coincided with the selling season for Ka'ū Coffee Mill, leading to a loss of potential breakthrough year.
• 🌾 Coffee farming in Hawaii is spread across five islands with eight regions and nearly 1,000 farms, highlighting the wide-reaching effects of the pandemic on the industry.
• 🕒 Harvesting coffee is a time-sensitive labor-intensive process requiring immediate action once the cherries ripen, which lasts only 24 hours.
• ♻️ The coffee production process involves several stages including washing, drying, milling, and sorting to ensure top-quality green beans.
• 📊 Lou Daniele, the general manager of Ka'ū Coffee Mill, estimates a loss of over $600,000 due to the closure of the retail shop and the inability to sell the previous year's crop.
• 📉 The value of coffee decreases as it remains unsold in the warehouse, becoming old crop and devalued, which significantly affects the bottom line.
• 🤝 The relationship between Ka'ū Coffee Mill and local farmers is symbiotic; disruptions in coffee demand affect the entire supply chain.
• 🌐 The Hawaiian coffee industry is heavily dependent on tourism, which was severely impacted by the pandemic, leading to a dramatic decline in demand.
• 💰 Financial assistance from the state and federal governments, such as PPP loans, has been insufficient to cover the operating costs of the affected businesses.

Q & A

How much coffee is typically processed in a season at Ka'ū Coffee Mill?

Nearly 1 million pounds of coffee is processed in a typical season at Ka'ū Coffee Mill.

What is the current situation with the coffee beans in the warehouse at Ka'ū Coffee Mill?

The warehouse is filled with nearly $1 million worth of Ka'ū-grown coffee beans that are not being sold due to the global demand shutdown.

What was the expected outcome for the coffee industry in Hawaii this year before the pandemic?

This year was expected to be a breakthrough year for the coffee industry in Hawaii, with increased demand and sales.

How has the pandemic affected the coffee producers' income?

The pandemic has led to no more income or revenue for coffee producers, resulting in significant losses.

What is the role of Lou Daniele in the Ka'ū Coffee Mill?

Lou Daniele is the general manager of Ka'ū Coffee Mill.

What factors contribute to the unique quality of coffee from Ka'ū?

Unique weather conditions with cool evenings and warm days, along with great soils, contribute to the high sugar content in Ka'ū coffee.

How is coffee cherries processed after harvesting?

After harvesting, coffee cherries go through a washed process that includes flotation, pulp removal, demucilaging, and drying to reduce moisture content.

What is the current amount of coffee parchment stored in Lou's warehouse?

Lou estimates that he has approximately 90,000 pounds of coffee parchment stored in his warehouse.

How has the pandemic impacted the sale of last year's coffee harvest?

The pandemic hit just as last year's harvest was ending, causing a shutdown in global demand and leading to a significant loss in revenue.

What is the impact of the decline in tourism on the Hawaiian coffee industry?

The decline in tourism has led to a dramatic drop in demand for Hawaiian coffee, as the industry is heavily dependent on tourist spending.

What are the challenges faced by coffee farmers like Leo Norberte due to the pandemic?

Coffee farmers like Leo Norberte are facing financial difficulties due to the lack of orders and the loss of income, with an estimated loss of about $20,000 every month.

What measures are being taken to help the coffee industry recover from the pandemic?

Starting October 15, visitors who test negative for COVID-19 within 72 hours of arriving in Hawaii can avoid a two-week quarantine period, which may help boost tourism and the coffee industry.