Molokai: Can Emerging Coffee Industry Boost The Island’s Economy?

trailer of red coffee beans

Molokai: Can Emerging Coffee Industry Boost The Island’s Economy?

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By Heidi Chang   | 03/18/2013

Molokai has the highest unemployment rate in the state, but now there’s an economic bright spot on the island — a once-thriving coffee industry is making a comeback.

It hasn’t been easy for the 30-year-old coffee business to stay afloat. But Molokai’s Coffees of Hawaii is now one of the largest coffee growers in the Hawaiian islands and has been winning awards for its product.

“They grow a great cup of coffee, ” says Greg Stille, president of the Hawaii Coffee Association. “They’ve won national awards.”

Molokai has been economically depressed since pineapple cultivation was phased out on the Friendly Isle in the 1970s and ’80s.

Historically, the island has had the highest unemployment rate in the state, and in January it was nearly double the statewide average.

But the Coffees of Hawaii plantation has created a space for other entrepreneurs — including a gift store and an espresso bar. Between them, the three operations are now employing several dozen island residents.

Coffees of Hawaii

Courtesy of Coffees of Hawaii

Click on images to enlarge

For more than 60 years, Del Monte grew pineapple in Kualapuu. But the era ended when it became the last pineapple company to shutdown operations on the island in the late 1980s. Hundreds of pineapple workers lost their livelihood.

As many wondered what could replace pineapple, John Hays started the first coffee plantation on Molokai on some of the abandoned pineapple fields. In 1984, Hays founded Coffees of Hawaii Inc., along with his wife, and a partner from Brazil.

“At first, a few members of the community were skeptical we could grow coffee on Molokai, but in the end they loved us, because we proved we could do it,” Hays recalls now.

The company hired mainly former pineapple workers to plant 600 acres of coffee around the Kualapuu reservoir.

Harvesting coffee | Courtesy of Coffees of Hawaii

Harvesting coffee | Courtesy of Coffees of Hawaii

 

Hays says Coffees of Hawaii became the first plantation in the U.S. to harvest coffee with machines, which helped lower the cost of labor. By 1992, he says, the company produced its first large commercial coffee crop, introducing Molokai coffee to the rest of the world. Coffee from the Molokai plantation became the first U.S.- grown coffee ever to be served at a meeting of the International Coffee Organization in London.

But it wasn’t all smooth sailing. Hays says the company went through some ups and downs, and changes in management, and eventually declared bankruptcy.

Today, even though Hays is no longer involved with the Molokai coffee plantation, he’s still convinced coffee could help revive the island’s economy.

“It’s a green crop, it’s healthy. Everything is there, the people and technology, and the land. All they need is an investor who cares about the future of the island.”

Planting coffee on Molokai | Courtesy Coffees of Hawaii

Planting coffee on Molokai | Courtesy Coffees of Hawaii

 

New Generation Of Owners

Since 2004, Mike Atherton, and Pete and Albert Boyce (father and son) have been operating Coffees of Hawaii LLC. They also bought Maui Tropical Plantation in 2006. Atherton also owns a coffee plantation in Nicaragua.

Initially, the new owners purchased the plantation’s base yard and 500 acres of land on the coffee plantation from Molokai Ranch. But as the economy grew worse, they sold off the land. Today, Coffees of Hawaii only owns the base yard, and it leases 115 acres from Monsanto.

While the Molokai plantation has been successful in supplying mainland chains like Trader Joe’s, it couldn’t keep up with the demand when the island began experiencing a drought. Since 2009, farmers on Molokai have had to restrict their water usage by 30 percent, according to Maria Holmes, the operations manager for Coffees of Hawaii.

Two years ago, Coffees of Hawaii had to downsize its crop and layoff some of its workers. “We were incurring substantial losses. We had to change our business plan or go out of business,” says Holmes, noting how expensive it is to do business on a struggling island.

Holmes says the plantation also realized it couldn’t sustain itself by Molokai coffee alone, so it decided to capitalize on its name. Now, Coffees of Hawaii also buys unroasted beans from around the state, and sells the coffee under its label.

Today, the coffee plantation employs nearly 20 people during the harvest season and about 15 during the off- season.

Growing coffee in Kualapuu, Molokai | © Coffees of Hawaii

Growing coffee in Kualapuu, Molokai | © Coffees of Hawaii

 

The Molokai plantation is the fourth largest mechanized coffee grower in Hawaii. And it recently hosted a two- day coffee festival to celebrate more than 20 years of coffee production on the Friendly Island. This was also part of a statewide celebration commemorating 200 years of cultivating coffee in Hawaii.

“It’s actually nice to see a product grown and processed here, and I’m a part of it,” says 34-year-old Pua Naeole, who manages the Coffees of Hawaii cafe at the Molokai Airport.

As part of the company’s recent changes, Coffees of Hawaii no longer operates the gift shop and espresso bar on its plantation, but leases out space for them instead.

That’s created opportunities for other Molokai entrepreneurs like the Socher family, who’ve operated a gift shop called the Big Wind Kite Factory in Maunaloa since 1980.

Blue Monkey

Courtesy Blue Monkey

 

Daphne Socher says that, over the years, they’ve had to learn how to make their own kites because customers wanted a “made on Molokai” or “made in Hawaii” product. She says by opening a second gift shop, called Blue Monkey, over at the coffee plantation, they’re able to expand their business, and their son is able to live and work on Molokai, and raise another generation.

For Marlene Sproat, operating the Espresso Cafe creates about 15 jobs for her and her family, and others on the island.

The cafe also plays a role in sharing Molokai’s unique island culture with the community. During the week, it hosts a free jam session on Tuesdays and free entertainment on Sundays, on the lanai of Coffees of Hawaii.

Sproat manages the café with her business partner, Faith Horner. Their husbands work together, too, running the Kalaupapa Mule Tour.

Roy Horner (pictured second from the left) plays ukulele at a jam session open to everyone | Photo © Zack Socher

Roy Horner (pictured second from the left) plays ukulele at a jam session open to everyone | Photo © Zack Socher

 

Roy Horner used to pick pine for Del Monte, and also worked for Dole. He recalls the days when pineapple covered much of the island. “The communities seemed to be bustling, more people were working, and economically much better off.”

When the coffee industry was trying to start up on Molokai, Horner attended some of the initial meetings. “It was a natural, using the facilities that were not being used,” says Horner, 62, a longtime Hawaiian homesteader. “And you’re working the land. We have good, rich soil.”

Sustaining an industry like coffee isn’t easy on Molokai. Jobs are hard to come by, and the population is small.

In January, Molokai’s unemployment rate was 9.6 percent, higher than the national average of 8.5 percent, and significantly above the statewide rate of 5.4 percent.

Today, the island’s main employers are government and agricultural companies, like Monsanto.

Molokai is well-known for its resistance to development of businesses that residents think could threaten their rural way of life. In recent years, many on the island have opposed Molokai Ranch’s plan to develop 200 luxury homes at Laau Point. A major energy project, Big Wind, that involved Molokai Ranch and its partners developing a wind farm to provide electricity to Oahu, was nearly universally opposed by residents.

Still, the Kualapuu community has embraced coffee.

“The infrastructure was already there,” says Manuwai Peters, an educator, who’s taught children and adults Hawaiian language and music, and Hawaiian studies on Molokai since 1993. “It didn’t require developing new land and possibly disturbing sacred or cultural sites.”

“I’m in favor of it because it keeps Molokai green, and keeps the land in diversified agricultural use,” Peters says. “It provides real jobs and doesn’t sacrifice our rural lifestyle.”

Coffee

Courtesy Coffees of Hawaii

 

Molokai seems poised to capitalize on the popularity of coffee, second only to petroleum in terms of commodities traded worldwide. The U.S. is also the biggest consumer of coffee in the world. And Hawaii is the only state that grows coffee commercially.

“In the mid 1800’s, coffee and sugar were vying to be the top crop grown in the islands,” says H.C. “Skip” Bittenbender, a professor in the Department of Tropical Plant and Soil Science at the University of Hawaii at Manoa.

So if there’s such a global demand for coffee today, why aren’t more companies growing coffee in Hawaii?

“Hawaii coffee has never been a major player in the American coffee industry, because it was limited to just one set of islands in the Pacific, far away from the rest of the country,” explains Bittenbender. “So American companies purchased coffee from other countries that had larger production and lower costs.”

“We’re actually more important now, than in the past,” he says, “because the specialty coffee market is asking for more single origins and good quality.”

Heidi Chang is a multimedia journalist who grew up exploring the coastline and lush valleys of Oahu and Molokai, where her family has lived for generations.

DISCUSSION: What do you think of Molokai’s emerging coffee business?

Related

During the week, Espresso Cafe hosts a jam session on Tuesdays, 10:30am – 12pm, and entertainment on Sundays, from 3pm – 5 pm, on the lanai of Coffees of Hawaii.  It’s open to everyone; locals, kupuna and visitors.

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