Expanding Jamaica Blue Mountain Coffee in the EU

Expanding Jamaica Blue Mountain coffee in the EU Windward Commodities 30th June 2022

6.5. Case Study: A Tale of Two Origins

It the context of innovation and quality, two origins have had considerable commercial success and provide blueprints for development, one from traditional roots similar to JBM, and one where focus on quality and marketing is transforming an entire origin.

Hawaii Kona: Anything But Traditional

The case of Kona coffee in Hawaii has strong similarities to that of JBM. Kona is the market name for coffee cultivated on the slopes of Hualalai and Mauna Loa in the Kona Districts of the Big Island of Hawaii. It commands price premiums above that of even JBM and is one of the most expensive coffees in the world at a reasonable scale (over 1,000MT p.a.). Climatic conditions combined with mineral-rich volcanic soil create extremely favourable coffee conditions. While fluctuations in the global C-market have meant that farm level costs regularly exceed pricing in the rest of the world, the prestige of the Kona brand and the scarcity of Kona coffee has created a separate market, freeing producers from the influence of the C-contract and giving a great deal of autonomy in terms of both pricing and product, fetching up to twenty times the world price for green beans. This was critical to the survival of the industry. Even though farms in Kona districts are larger than those in Jamaica with substantially higher yields, labour costs at USD200-300 per day are much higher and, when compared to Guatemala rates of USD3-6 per day, uneconomical on the world stage. The brand and strategy worked, premiums were high all the way from the 1980’s when specialty coffee took off to the early 200’s. However, by 2010, the Kona brand was traditional, stale and at risk of slipping from its premium position with pricing just below that of JBM coffee at USD22/kg for green beans. Today, 100% Kona commands prices of between USD36/kg and USD143/kg. So, what went right? And how does Kona, with production in 2018 of more than double that of JBM (1,088mt of Kona vs 534mt of JBM) command premiums well

in excess of the level achieved by Jamaica? The answer is innovation. Encouraged by the islands’ unusual position in the global marketplace and by infrastructure and regulation that allows individual producers to experiment, they have done exactly that. Kelleigh Stewart, owner of Big Island Coffee Roasters in The Coffee Review says that. “To me, it feels like we’ve jumped from being a decade behind the specialty coffee movement to the forefront, just within the last five years…In Hawai’i, producers can test a new processing style, have it taste tested by their end buyers, then set their own green/roasted prices based on the additional work involved.” This has resulted in careful experimentation both within and outside the Kona geographical area. It has also lead to thoughtful choices about varietals best suited for each microclimate, and an openness to exploring what Hawai’i coffee can be, without preconceptions including hybrid varieties. Many of these ideas are being taken from the wine industry including carbonic maceration and alternative fermentation liquids like soda and sea water, and commercial yeasts as well as genuine innovations that include: • Local-rum-barrel-aged Puna Caturra • Ka’u-grown coffee fermented with wine yeast • A washed-process Kenya-style SL28 • Honey-processed Ka’u Typica, But even at the more traditional end of the innovation process, new ideas were not initially supported by all farmers or stakeholders. The concern was the producers would dilute the Kona brand which they had nurtured for more than half a century. According to The Coffee Review,

Jamaica Blue Mountain Germany: 250g €59.00 USD254.44/kg Annual vol: 534mt

Hawaii Kona Germany: 100g €27.90 USD290.16/kg Annual vol: 1088mt

Lee Paterson, owner of producer Hula Daddy had this to say. “Everything is an option for the third wave. When we created Kona Sweet [a natural processed, sun-dried coffee] in 2008, we were advised not to do it because it wouldn’t be perceived as traditional enough.” However, their success in terms of both cupping scores and in international competitions of these innovations has lead producers such as Monarch Farms to experiment not just by virtue of its processing but by its variety, Gesha. Long a fixture in the elite specialty market, Gesha is being planted widely beyond Ethiopia (its origin) and Panama (where it was popularized). This has lead to the revitalisation of the brand and, most importantly, the price premium paid for it with even fairly standard 100% Kona sold for a premium to JBM side-by side in the EU market. Roestfrisch a specialty roaster and coffee shop in Germany sells JBM Wallenford Estate at USD18.64/100g and Kona Greenwell at USD22.41/100g

Time to Wake Up and ‘Cup’ the Coffee | 35