After robust testimony both supporting and opposing a coffee labeling bill on Wednesday, the Senate Committee on Commerce and Consumer Protection voted to advance the measure with amendments.
House Bill 2298 would establish a timeline by which roasted coffee, instant coffee and ready-to-drink coffee beverages that use a geographic origin in labeling or advertising would be required to contain a certain percentage of coffee from that geographic origin.
The bill originally called for phasing in the percentage of regional coffee to 25% by July 1, 50% by 2025, 75% by 2026 and 100% by 2027.
However, House Committee on Consumer Protection and Commerce Chair Rep. Mark Nakashima recommended amending the bill to modify the schedule for the increase in coffee percentages and change responsibility from the retailer to the wholesaler so wholesalers are able to provide 20% blend until June 30, 2027, 25% blend until 2030 and after 2033 sell only 50% blend.
At Wednesday’s public hearing, there were farmers from Kona along with coffee blenders who provided in-person and written testimony with 52 supporting the measure and 22 opposed.
The bill, introduced by Rep. Nicole Lowen, came on the heels of Act 222 in 2022 which required an independent study to assess the economic impact of Hawaii’s coffee labeling laws on local coffee farmers and the industry.
Guild Consulting of Honolulu was awarded the $100,000 contract to conduct the study, and on Jan.18, the DOA submitted the final report on “Economic Study on Changes in Coffee Labeling Law.”
The report highlighted that increasing the minimum amount of Kona coffee from 10% to either 51% or 100% would be advantageous for local farmers, with a higher increase providing the most benefit. Additionally, the report anticipated that proposed labeling changes could result in a price increase for Kona coffee while seeing minimal impact on quantities grown or sold.
That report was called “flawed” and “rushed” by opponents of the bill and hailed as further proof the measure needs to be passed by supporters.
“The recent coffee labeling law study recognized that the limited availability of data and the constrained project timeline significantly impacted the precision of the study’s conclusion. Collecting and analyzing more data will allow for a better understanding of the impacts on the market,” Gerard Bastiaanse, president of Hawaii Coffee Company testified. “This bill will force consumers to either select another affordable alternative roasted on the mainland or abroad, by a mainland or international company, or to pay a much higher price for a 100% Kona coffee product.”
“The Act 222 Economic Study clearly outlines the economic benefits of increasing the minimum content requirement for Kona coffee,” said Joshua Montgomery of Guard Well Farm. “Allowing the continuation of 50% blends not only undermines the quality and reputation of Hawaiian coffee but is also economically harmful to us, the growers. We need the legislation to reflect a quicker adaptation to 100% Kona coffee, ensuring that the economic benefits are felt sooner rather than later.”
Synergistic Hawaii Agriculture Council Administrator and coffee farmer Suzanne Shriner dispelled testimony that passage of the bill would cause farmers to sit on coffee because there is not enough of a market for 100% Kona Coffee.
“Quite simply, there is not enough Kona, Maui or Ka‘u coffee to meet the global desire for Hawaiian coffee. As the Act 222 economic study made clear, demand for Kona, in particular, is inelastic and increasing the blend ratio will have little effect on the quantity demanded or supplied,” she said.
After deferring the vote to Thursday in order to further discussion with committee members, Committee Chair Jarrett Keohokalole recommended that the version of the bill that crossed over to the Senate be amended to reflect the original draft of the measure.
“The recommendation on this measure is to adopt the original version of HB 2298 before the House draft was adopted to revert back the timeline from 25% to 100% over four years and also the remove the language in the original version requiring wholesalers to sell off their inventory in anticipation of the phased in labeling requirements taking effect,” said Keohokalole.
Committee member Sen. Tim Richards voted yes with reservations on the amended bill.
“This is something we have to do to protect the Kona label. I’ve had long conversations with the different parties as we weigh in on this,” he said. “I’m am going to be supporting this with reservations because we’re not quite there yet, and we need to have more talk story about this. This is a valid thing for agriculture and one of the facets we need to pay attention to.”
Shriner said the vote to advance the bill is a win for coffee growers.
“We will keep pushing until 100% is the law. The state’s recent economic study on coffee blending made it clear that anything less than 100% Kona takes money from growers and transfers it to the blenders. Protecting the Hawaii names, such as Kona and Ka‘u, will help ensure that our heritage crop keeps it’s prestigious reputation in the marketplace,” she said. “We’re not done yet. We need to get it past one more Senate committee then on to joint conference. But we are hopeful that this 30 year fight is almost over.
“The coffee world has changed since blends first came on the scene. Consumers want to know where their products come from. This is true whether it’s coffee, macadamia nuts or any Hawaiian product.”
Lowen is cautiously optimistic about the bill making it to law after 30 years of legislative wrangling.
“It’s a positive outcome, but there’s still a long way to go before anything passes,” she said.