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Too much good coffee
4 December 2013

Kona Earth
Estate Coffee
GradePercent
Peaberry 9.3%
Extra Fancy58.1%
Estate 19.3%
Prime 8.6%
3X 2.2%
Off Grade 2.1%
The chart to the right shows the grading percentages for our most recent batch of coffee.  The chart probably doesn't mean much to the average coffee drinker.  I'm including it here because I want to show off to my fellow Kona coffee farmers.

tree What do those percentages mean? Basically, it means that Kona Earth is a happy coffee farm with healthy and happy coffee trees.  These happy trees are producing unusually high amounts of the largest and most valuable coffee beans.  Even better, the trees are producing very few defective beans.  It's great to have such healthy coffee but it does create some unexpected challenges.  Let me explain.

This year our trees have produced nearly 60% Extra Fancy beans.  Extra Fancy is the highest of the grades and the largest of the beans.  Most farms average closer to 20% Extra Fancy.  60%, while not crazy high for our farm, is a lot of Extra Fancy.

What the chart to the right doesn't show is that much of the coffee is even larger than Extra Fancy.  If there was a grade higher than Extra Fancy, a lot of the coffee would qualify for that grade.  Some of the beans are so big they would even qualify for a grade one step higher than that.  Some of the beans are so large that they didn't fit through the processing equipment properly.  It is possible for a coffee bean to be too big.

In addition to the extra large beans we also have an unusually high percentage of peaberry.  These are the "small" round beans that can sell for twice the price of normal coffee.  Typically, a coffee farm can expect about large 3-4% of the crop to be peaberry, 5% if they're lucky.  This year we have a whopping 9.3%.  That's simply astounding.  Not only is there a lot of peaberry, it's also unusually large peaberry.  Our percentage of peaberry would probably be even higher except many of the "small" peaberry beans are so large that they aren't getting sorted properly and ending up with the other, larger grades.  Again, being too big created some issues.  Still, it's good that we got so much peaberry because it's a popular product and we had just sold out.

Even with all that plump, healthy coffee there are still some beans that never quite develop properly.  On some farms, especially those that aren't managing the coffee berry borer properly, the amount of 3x and off-grade beans can be 50% or higher.  It is not legal to call those beans Kona coffee so, unless mislabeled and sold to unsuspecting consumers, those beans count as a loss.  We have so few bad beans that we probably could have left them mixed in with the rest and still met the legal standards.  We didn't though.  We put far too much effort into producing the best coffee possible and downgrading it to a mediocre coffee just to save 2% would be counter-productive.  Just because others do it doesn't mean we should too.  Instead, we simply threw away the bad beans way.

Comp

As if all the above isn't enough good news, to top it off the price of Kona coffee is currently at an all time high.  The prices are not just higher than ever, they're significantly higher than ever, nearly 50% higher.  That's not good news for the consumer but as a Kona coffee farmer, this year is a great year to have an above average harvest.

All this good news has created an unusual problem though.  With so much of our coffee being Extra Fancy, that means we don't have enough of the normal grades.  In fact, we have so little of our Estate grade coffee (Fancy and #1 combined) that we had to mark it as out of stock for our wholesale customers.  That is not good new for those customers and we don't want to lose their business.  In a normal year they could just bump up to the slightly more expensive Extra Fancy grade but prices are so high this year that the price of Extra Fancy may be out of reach for some.

We have two solutions to the problem.  First, we're keeping the price of our Extra Fancy below market value.  Second, we're making sure we keep extra Prime in stock.  This gives wholesalers the choice of paying a little more for Extra Fancy or settling for the less expensive Prime.  It's not a perfect solution but it's about the best we can do.

bunny There's nothing particularly wrong with prime, it can still produce a decent cup of coffee.  If you've ever purchased pre-ground coffee from a grocery store or a latté from a nationwide chain, it was probably prime grade or lower.  In the picture above, which is beans right out of the bag, can you tell which side is Prime and which side is Extra Fancy?

In the past we've sold our prime to a few large wholesalers that were looking for the cheapest Kona coffee they could find.  These bargain-hunting wholesalers are usually not very loyal.  When the market was down, and we were forced to sell below our cost of production, they still negotiated the lowest price they could.  Well, loyalty goes both ways and now they get no coffee at all.

That's the advantage of being a small company in a strong market, we can choose the customers we like and don't like.  Cutting off the less desirable customers has several benefits.  First, it's less headache for us.  Second, it keeps coffee in stock for the loyal customers that need it.  Most importantly though, it allows us to continue concentrating on quality rather than squeezing out every penny of profit possible.  In the long run, we believe that is the best way to build a strong company.

So if you've recently tried to purchase coffee from us but were told no, we're sorry but there just isn't enough coffee to go around.  On the other hand, if you have successfully purchased coffee from us, Congratulations! That means we like you.




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