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TED
Case Studies |
Hawaiian Coffee in the World |
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TED
Case Studies |
Hawaiian Coffee in the World |
1. The Issue
| Hawaiian Coffee is a protected type of coffee. The best known Hawaiian coffee is Kona coffee that comes from The Big Island, even though coffee is currently grown on the four counties. |
2. Description
How Hawaiian coffee has impacted international trade:50 years of history and production.
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Coffee is one of the primary goods, that even though its history shows big fluctuations in its price, competition (its many varieties, tea and cocoa), and consumption, it remains as a very high demanded product all around the world. People love coffee, people drink coffee in an informal setting, a formal setting or just because ? (looking for world consumption coffee statistics) is it maybe because of the boost of energy we get when we drink a cup of coffee? Or maybe because of its exquisite smell? Or it could also be because of the perfect combination flavor it gives with cookies or chocolate bars? Well all these reasons might be in one or other way the reason why people never stop consuming coffee, even though health experts have studies on the negative side effects that caffeine produces. Hawaii is the only State of the United States that produces, commercializes and trades coffee. It has been commercialized as one of the finest and most exclusive Arabica coffee of the world and its price is higher than any other coffee in the world. Because of the special and unique characteristics of the soil where is cultivated. Hawaii presents a climate of continuous and very well distributed rain and sun all year round which gives this product a perfect warm climate to be cultivated on. The Hawaiian Islands have a very rich soil because of the proximity of the volcanoes and the hillsides give the product the perfect terrain to grow and a unique taste. The
coffee industry in Hawaii has developed primarily in The Big Island. While
there are 600 farms on this Island there are only 25 farms in Maui, Molokai,
Oahu, and Kauai in total. All the coffee grown in the islands is Arabica
and has been commercialized around the world under the label of the place
of production making the Kona coffee the best known. As oppose to what
consumers believe, there are no difference in the coffee grown in the
different islands of Hawai. The difference refers to the island and regions
within each island that the Arabica coffee is grown, such as: Kona, Kaua’I,
Ka’anapali Maui, Haleakala Maui, Moloka’I, Waialua and macadamia
Cream. This new type of marketing has showed an increasing tendency in market prices and so an increase in revenues not only for the brewers but for the farmers as well. The cultivation of coffee has remained viable, even though it has not been always profitable, the face value prices of land have been going up. The industry has gone through a changing period with mergers and buy outs that have significantly reduced the local cooperatives. This process has changed the interaction and operation within the industry. Most coffee farmers have another job and operate their farms on a part-time basis. Since 1959the acreage of coffee of coffee began to decline because of the fluctuation and downward trend of the international price, al though in the last 2 decades an increasing tendency has set the pace for the cultivation of coffee with several new processors entering the sector since the 1980s. “Despite continuing labor supply difficulties and other problems, Hawaii’s coffee industry – a century and a half old and unique in the United States – is alive and flourishing” (foot note) |
3. Related Cases
See
other TED case studies related to geographic indications and trademark
issues on the GIANT (link to the website) project – Geographic Indications
and International Trade.
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4. Author and Date: Milena Gaviria, June 2004
5. Discourse and Status: Allegation and in progress
6. Forum and Scope: United States (Hawaii) and Unilateral
7. Decision Breadth: 1
8. Legal Standing: LAN
9. Geographic Locations
a. Geographic Domain: North America
b. Geographic Site: Western North America
c. Geographic Impact: United States
10. Sub-National Factors: Yes
11. Type of Habitat: Tropical. Hawaii has a remarkable climate that is fairly constant year round.
IV. Trade Clusters
12. Type of Measure:
13. Direct v. Indirect Impacts:
14. Relation of Trade Measure to Environmental Impact
a. Directly Related to Product: Yes. Hawaiian Coffee
b. Indirectly Related to Product: No
c. Not Related to Product: No
d. Related to Process: Yes, culture
15. Trade Product Identification:
Coffee.
Kona coffee has an annual production of 7 million pounds, been the largest
in the islands. The other islands combined production is about a third
greater of the Big Island’s production. |
16. Economic Data
State
Merchandise Exports to the World, 1997 – 2000, by Product Sector
(Thousands of Dollars)
| Agricultural
and Livestock Products |
1997 |
1998 |
1999 |
2000 |
% Change 1999 -2000 |
%
Change 1997 -2000 |
| Crop
production |
21,029 |
2,0000 |
17,690 |
19,572 |
10,6 |
(6,9) |
Source: http://ita.doc.gov/td/industry/otea/state/industry/world.txt
United
States Department of Agriculture Foreign Agricultural Service
FAS Agricultural Import Commodity Aggregations
| January
- December |
January
- January |
||||||||
| In
Thousands of Dollars |
Comparisons |
||||||||
| World
Total |
Coffee
& Coffee Products
|
1999 |
2000 |
2001 |
2002 |
2003 |
2003 |
2004 |
%
Change |
| TOTAL |
2,893,198 |
2,700,331 |
1,676,801 |
1,693,347 |
1,957,883 |
161,211 |
160,848 |
-0.23 |
|
1994/95 through 2003/04 Hawaii Coffee Statistics
| Farms |
Acreage |
Yield |
Marketing |
Farm
Prices |
Value
of Sales |
Green
Production |
||
| Crop
Year |
In
Crop |
Harvested |
All |
|||||
| Number |
Acres |
1,000
Pounds |
$1,000 |
1,000
pounds |
||||
| 1994/95 |
585 |
6,800 |
4,400 |
1 |
4,300 |
280 |
12,040 |
3,400 |
| 1995/96 |
580 |
6,800 |
5,500 |
1 |
5,400 |
300 |
16,200 |
4,320 |
| 1996/97 |
560 |
6,600 |
5,400 |
1.2 |
6,400 |
325 |
20,800 |
5,000 |
| 1997/98 |
585 |
7,000 |
5,800 |
1.6 |
9,400 |
300 |
28,200 |
7,720 |
| 1998/99 |
610 |
7,400 |
6,100 |
1.6 |
9,500 |
260 |
24,700 |
7,600 |
| 1999/2000 |
650 |
7,700 |
6,400 |
1.6 |
10,000 |
210 |
21,000 |
8,100 |
| 2000/01 |
670 |
7,900 |
6,800 |
1.3 |
8,700 |
265 |
23,055 |
7,000 |
| 2001/02 |
700 |
8,000 |
6,300 |
1.3 |
8,000 |
245 |
19,600 |
6,400 |
| 2002/03 |
710 |
7,200 |
5,900 |
1.4 |
7,500 |
310 |
23,250 |
5,900 |
| 2003/04 |
715 |
7,300 |
5,900 |
1.5 |
8,700 |
270 |
23,490 |
7,000 |
Source: http://www.nass.usda.gov/hi/speccrop/coffee.htm
As
the table shows there are some important trends to be analyzed. Since
1994 the number of farms has been constantly increasing from 585 in 1994
to 715 to 2003/04 and as at the same time the cultivated land showed a
fairly decent increase until 2001 from 6,800 crops in 1994 to 8,000 in
between 2001/02 and 4,400 harvested acres in 1994 to 6,800 in between
200/01 dropping to 6,300 during 2001/02 while the crops showed the peak.
This trend shows the positive impact on the employment opportunity the
industry was giving until the output in farms began decreasing because
of the fluctuating price the product was showing. The value of sales column
shows this fluctuation and its effects in the farm prices which is still
trying to recover having ups and downs comparatively from one year to
the other. The industry is still trying to recuperate its growing trend
of the 90s. 1997- 1998 showed the highest average farm prices and so the
value of sales went up to 28,200 ($1,000) which has not been reached since
that year. Since 2002 the data show a slightly recovery of the industry
in general which gives a positive perspective for the new growing farms
and growing harvested land. |
17. Impact of Trade Restriction: Low
18. Industry Sector: Food
19. Exporters and Importers:
The
way the coffee industry channels its product for trade is more focused
in the domestic (U.S) and local market. We can’t really talk about
ten biggest export companies, because the product does not have a real
impact outside the boundaries of the U.S. market. The interesting side
of the trade issue is the high competed market the product faces within
the U.S. market. -
Bay View Farm located in the Big Island http://www.bayviewfarmcoffees.com/ |
20. Environmental Problem Type: Culture
21. Name, Type, and Diversity of Species
Name: Hawaiian Coffee
Type: Arabica
Diversity: There is only one type of Hawaiian Coffee.
22. Resource Impact and Effect: Low and Scale
23. Urgency and Lifetime: Low and Hundreds of Years
24. Substitutes:
Like products; tea and other
types of coffee
VI.
Other Factors
25. Culture: Yes
26. Trans-Boundary Issues: No
27. Rights: No
28. Relevant Literature
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- Kinro, Gerald. “Cup of Aloha: the Kona coffee epic.” Honolulu University of Hawaii Press, 2003 - Pacific Business News February 19, 2002 - Hawaii Coffee Association
http:www.hawaiicoffeeassoc.org - Honolulu Star Bulletin: Isle coffee fills cups at White House Wednesday July 16, 2003 http://starbulletin.com/2003/07/16/news/story8.htm - http://gohawaii.about.com/library/guidepicks/aatp_hawaiian-coffee.htm - http://www.nass.usda.gov/hi/speccrop/coffee.htm - Tropical Products: World Markets and Trade, FTROP 4-03, December 2003, Foreign Agricultural Service, U.S. Department of Agriculture. - http://www.ita.doc.gov/td/industry/otea/state_summary/ - Travel Industry
Association of America Inc http://www.tia.org/ |