Coffee from a local fast food joint might seem like an ordinary cup of joe, but according to Victor Lim, a McDonald’s franchise owner, the Golden Arches serves something special: a blend containing coffee from Hawaii’s famed Kona region. And Lim wants to keep it that way.

As legislative lead for the Hawaii Restaurant Association, Lim spearheads the fight against Kona coffee farmers who want tighter labeling laws. The farmers say places like McDonald’s – and coffee roasters and packagers – water down the Kona brand by including just 10% authentic Kona coffee in blends they sell.

The farmers want laws requiring higher percentages for coffee that the state allows to carry the Kona name.

As the designation of origin of food products including macadamia and milk emerge in public debates and federal courts, Kona coffee farmers hope this year’s legislative campaign to tighten labeling laws will be different from previous years. Courtesy: Christopher Prentiss Michel/2010

But people like Lim say Kona coffee is so expensive that restaurateurs must blend it with cheaper imports to keep prices down. And it’s not just low-end eateries like McDonald’s, Lim says.

“Every one of our celebrity chefs in Hawaii has their own name Kona blend,” Lim said.

Now, on the eve of the 2023 legislative session, in what seems like a decades-long, perennial rite of winter, Kona coffee farmers are preparing a legislative campaign to tighten Hawaii’s coffee labeling laws.

While such efforts are nothing new, this year may be different. Proponents say they’re considering a different approach this session, focusing not so much on coffee or agriculture but consumer protection.

Plus, it’s not just coffee farmers raising questions about the designation of origin of Hawaii food products these days. Macadamia nut growers recently launched an advertising campaign drawing attention to the practice of imported nuts posing as Hawaiian. A major food distributor, meanwhile, is suing a prominent milk company, alleging the brand is passing off milk from the mainland as Hawaiian milk.

Kona coffee farmers, meanwhile, have gotten approximately $20 million in settlement payments following a class action suit filed against coffee brands and retailers for allegedly selling fake Kona coffee. All that follows similar suits in recent years involving products like bread and beer.

Where Is It From?

Designation of origin of food products has become a celebrated cause in recent years, and food producers are getting traction.

Hawaii Rep. Nicole Lowen, who supported a 2022 bill that passed out of the House before senators derailed it, said she’s working with farmers on another measure. Lowen pledged she or House colleagues, or both, will introduce something, although she could not provide specifics.

“It’s still a little early,” she said. “I might have a better idea a month from now.”

Rep Nicole Lowen in joint senate/house finance final budget announcement.
Rep. Nicole Lowen says she plans to support Kona coffee farmers who want tighter labeling laws this legislative session. Cory Lum/Civil Beat/2018

While lawmakers are divided on how to protect Kona coffee, there’s little dispute about coffee’s importance as an agricultural product in Hawaii. According to the U.S. Department of Agriculture, Hawaii produced $61.9 million worth of coffee in 2021, second only to macadamia nuts, which were valued at $62.7 million. Both were worth far more than the No. 3 crop, papayas, which were worth $8.5 million, according to the USDA.

The question is how best to protect the brand and business. Lowen sponsored a bill last session to increase to 51% from 10% the minimum amount of Kona coffee that must be in a package labeled as a “Kona blend.” The bill sailed through the House, but Senate committees, in a joint hearing, changed the bill to require the Hawaii Department of Agriculture to study the economic impact a labeling change might have on coffee. The study isn’t due until January 2024.

Opponents supporting the status quo include Hawaii Coffee Co. One of Hawaii’s most influential coffee companies, Hawaii Coffee Co. is a subsidiary of Los Angeles-based Topa Equities, and owns brands including Koa Coffee, Koa Kau Coffee, Lion Coffee and Royal Kona Coffee.

Hawaii Coffee Co.’s president, Gerard Bastiaanse, didn’t respond to an emailed interview request. But he outlined his arguments against stricter labeling requirements in testimony against Lowen’s bill last session.

Among other things, Bastiaanse said, some customers prefer the taste of diluted Kona blends over 100% Kona coffee.

But perhaps more important are issues related to the high price of Kona coffee. As Bastiaanse described it, eliminating 10% blends would drive up prices of Kona coffee products so high that demand would drop, leading to a cascade of problems that would hurt restaurant owners, customers and farmers. The company also would likely have to cut jobs at its coffee facility on Kalihi, Bastiaanse wrote.

The president of the company that owns the Royal Kona brands says increasing the percentage of Kona coffee in blends will price consumers out of the market and thereby hurt coffee farmers and roasters. David Croxford/Civil Beat/2022

One strategy this session is to seek a different path through the Legislature, said Bruce Corker, owner of Rancho Aloha coffee farm and a former board member of the Kona Coffee Farmers Association. That would mean changing the bill’s title to “Relating to Consumer Protection” instead of “Relating to Coffee,” Corker said.

Colehour Bondera, the association’s current president, said such a change was worth a try.

“You never know what’s going to work,” he said. “So why not try different options?”

Mac Nut Growers Protest Too

Protecting consumers has been the focal point of other recent campaigns involving Hawaii food products. And others are starting to step up and push for change.

Brad Nelson, a director of the Macadamia Growers of Hawaii, said federal laws on food labeling contain a gaping loophole. Fresh produce needs labels saying where it’s from, Nelson said, but processed foods don’t.

So while macadamia nuts from places like Kenya and China have to be labelled that way upon import, that changes once the nuts are processed, he said. No label is required.

Meanwhile, Hawaii laws protecting mac nuts are a mixed bag. On one hand, Hawaii law says only 100% macadamia nuts can be labelled as such. On the other hand, Hawaii has a broader labeling law preventing Hawaii-made and Hawaii-processed products from being called “Made in Hawaii” if they aren’t made here.

But that law also provides a loophole: processed foods can be labeled as “Made in Hawaii” if only only 51% of the perishable produce in the products is grown here.

This has led Nelson and other macadamia nut growers to launch an ad campaign telling consumers to read labels carefully to make sure the nuts are 100% Hawaiian.

Before retiring to Kauai recently, Bruce Silverglade spent nearly three decades as a lawyer with the Center for Science in the Public Interest in Washington, D.C., where he was director of legal affairs from 1991-2010. Silverglade said when it comes to protecting consumers and Hawaii food products, Hawaii lags most other states.

“Most states have laws generally prohibiting misleading claims,” he said.

Hawaii, he said, has gone in the wrong direction by legalizing the labeling of coffee as being a “Kona blend” when 90% of the coffee is from somewhere else.

“That label is misleading consumers,” he said. “What the Hawaii Legislature has done is legitimize that sort of activity in the current statute.”

Mauna Loa and Hawaiian Host Foodland
The Mauna Loa and Hawaiian Host brands dominate shelves in macamdia nut sections of local grocery stores. Stewart Yerton/Civil Beat/2022

Even when claims made on packaging are clearly misleading, Hawaii law often provides little recourse for consumers. After a consumer sued the mainland manufacturer of products like Hawaiian Kettle Style Potato Chips and Hawaiian Sweet Maui Onion Rings claiming the packaging misled consumers into believing the products were made in Hawaii when they were not, a judge ruled against the consumer, saying an ordinary citizen could not invoke the state’s “Made in Hawaii” statute. Only the Hawaii Board of Agriculture could enforce the law, the court said.

Federal Class Actions Provide Recourse

Increasingly, people are turning to federal courts for help. In November 2021, the Hawaii Foodservice Alliance, a major food distributor, sued Meadow Gold Dairies Hawaii alleging the longtime Hawaii brand violated federal trademark law by labeling mainland milk as being from Hawaii.

A key allegation is that Meadow Gold’s use of phrases like “Hawaii’s Dairy” and “Made with Aloha” on cartons confuses people into thinking the milk is from Hawaii when it is often shipped from elsewhere and merely processed here.

Silverglade, the consumer protection lawyer, said the Meadow Gold suit raises concerns similar to those put forth by Kona coffee farmers.

“‘Hawaii’s Dairy’ makes it seem the milk is from Hawaii, and not all of it is,” he said.

Meadow Gold’s chief executive, Bahman Sadeghi, has said the company buys all of the Hawaii-grown milk that it can, but with only one dairy farm operating in the state, there’s not much supply. Meadow Gold has announced plans to establish new dairy farms on the Big Island, but has not done so yet.

Similar lawsuits have had mixed results. The brewer of Kona beer in 2019 gave partial refunds to settle a lawsuit claiming it misled consumers on the mainland into thinking Kona beer was made in Hawaii when it was not.

But in 2021 a federal judge in San Francisco ruled the maker of King’s Hawaiian bread hadn’t misled consumers into thinking the products were made in Hawaii, despite the product name and a package that says, “Est. 1950, Hilo, Hawaii.”

A class action suit brought by Kona coffee farmers against various brands and big retailers like Kroger, Costco and TJ Maxx’s parent for allegedly selling fake Kona coffee have led to settlements totaling approximately $20 million.

Still, Corker said, it shouldn’t take private lawsuits to do what the state of Hawaii should be doing.

Corker points to Vermont’s aggressive protection of its maple syrup and Idaho’s protect of potatoes as examples of what the government should be doing.

“The broader question is why isn’t Hawaii doing what other states are doing to protect its brand names?” he said. “You’d think the interest of Hawaii would be to protect Hawaii producers.”

Hawaii Grown” is funded in part by grants from the Stupski Foundation, Ulupono Fund at the Hawaii Community Foundation and the Frost Family Foundation.

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