Source: KINI PO-PO CREATIONS, INC. submitted to
DEVELOPMENT OF AN ORGANIC HAWAIIAN HERBAL TEA INDUSTRY
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
TERMINATED
Funding Source
SMALL BUSINESS GRANT
Reporting Frequency
Annual
Accession No.
0196997
Grant No.
2003-33610-13944
Project No.
HAWK-2003-04101
Proposal No.
2003-04101
Multistate No.
(N/A)
Program Code
8.9
Project Start Date
Sep 15, 2003
Project End Date
Sep 14, 2006
Grant Year
2003
Project Director
Kamiyama, H. S.
Recipient Organization
KINI PO-PO CREATIONS, INC.
12PUAINAKO STREET
HILO,HI 96720
Performing Department
(N/A)
Non Technical Summary
The market for "organic" Hawaiian herbal teas is limited by the fact that most ingredients are wild-crafted. This project examines the possibility of the organic production of Hawaiian herbal products and the associated processing and marketing required to develop a significant market for "organic" Hawaiian herbal teas.
Animal Health Component
(N/A)
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
5022239303025%
5032239310025%
6012239310025%
6042239303025%
Knowledge Area
502 - New and Improved Food Products; 503 - Quality Maintenance in Storing and Marketing Food Products; 604 - Marketing and Distribution Practices; 601 - Economics of Agricultural Production and Farm Management;

Subject Of Investigation
2239 - Flavoring and beverage plants, general/other;

Field Of Science
3100 - Management; 3030 - Information and communication;
Goals / Objectives
(a) Mamaki Farm Research An experimental organic mamaki farm will be established in the wet side of Hawaii island to compare with the world's first organic mamaki farm, located in the dry Ka`u district. In addition to the major planting of mamaki, a limited amount of koko`olau and those other ingredients being used in the mamaki tea blends that appear to be practical for this climate will be planted at this site for observation. The objective of this activity will be to determine if the quality and quantity of mamaki leaf (and, secondarily, the other crops planted) can be grown in this environment as well as (or better than) it can be grown at the farm in Ka`u. (b) Hot Tea Research and Development The graphics developed during Phase I will have to be redeveloped to meet the new USDA 'organic' regulations before it will be possible to test the niche markets that have been identified by Phase I research. Market types, sizes and how the product packaging (as developed during Phase I) fits these needs will be evaluated. Phase II will be directed at research that will secure these markets for hot tea and test the same or similar markets for iced, organic herbal teas. Phase II research will focus on the specifics of the niche markets, vertical integration and manufacturing opportunities. Market types, sizes and product packaging developed during Phase I will be evaluated, relying heavily on in-store sampling and interviews with an analysis of these and other market research results. Research and development efforts in Phase II would seek to move the developed hot-tea product concepts through a series of definite stages to prove, refine, and ready them for commercial markets. In addition, Phase II research will evaluate the most profitable mix of consumer and trade promotions, advertising, slotting fees, magazine advertising, cooperative advertising, feature advertising and other trial use programs to pursue. Phase II will also aid in evaluating the business strategies that will optimize Kini Po-Po's ability to take advantage of the existing opportunities for commercialization as well as look at the broader picture. (c) Iced Tea Research and Development The technical objectives of Phase II research include product development and packaging for the iced tea product line, based on the market research that was completed during Phase I. This significant undertaking will result in a line of products that will be tested in the niche markets identified during Phase I (mostly in Hawai`i and the U.S. mainland). A research program similar to that for the hot tea products (see above) will be followed which will determine the optimal marketing strategies, including distribution channels, to pursue. This research will lead to the commercialization of this line of products by the end of Phase II.
Project Methods
(a) Mamaki Farm Research A 25-acre farm will be established on a 50-acre parcel of land at a site just five miles from Kini Po-Po's Hilo office. USDA's NRCS erosion control recommendations will be sought and put in place before planting. Mamaki plants will make up 90 percent of the crop, koko`olau will make up 8 percent and the remainder of the crop will be planted in other ingredients that can be used in the tea blends developed during Phase I and Phase II. Disease or insect problems will be monitored throughout the production period. The research plot will be cleared while forming the required water control contours. Soil preparation will include applying weed mat and organic fertilizers while ensuring that the field is certified 'organic'. In month three, the field will be planted with 550 plants per acre and the crop will be monitored for crop damage for the next nine months. A plastic-covered drying shed will be built at the beginning of Phase II to be used to propagate the seedlings. In month eight, the first harvest of leaves will begin and the drying shed used to dry both the bulk leaves and the pressed leaves (for the high-end restaurants). The quality of the harvested leaves will be compared with those grown in Ka`u for appearance as well as composition (calories, ash, moisture, protein, fat, cholesterol, sugars, carbohydrates, iron, calcium, sodium, Vitamin A, Vitamin C, and total dietary fiber). (b) Hot Tea Research and Development Studies will be undertaken into how to incorporate USDA's new labeling laws in our package designs in a manner to maximize our products' 'organic' branding. All test materials will be re-printed (packets, retail boxes and gift boxes) before the final market tests for the hot tea products can be undertaken. Meanwhile, our mamaki tea will be evaluated for any other attributes that will assist in marketing, the results of which will be used on the brochures developed to go along with the product. North American Tea and Coffee Company, Inc. will mix, bag and box our new teas, then send them to Hawai`i or other locations for distribution. The market in Hawai`i will be tested both at Kini Po-Po's existing clients and, for the first time in Kini Po-Po's history, the product will be distributed to local grocery stores. Taste tests will be held at 100 stores in Hawai`i at both tourist and local markets to evaluate consumer acceptance. A specialty sideline of whole mamaki leaves will be developed for the high-end restaurant and hotel markets, packaged in a striking velvet-lined wooden box with the Kini Po-Po trademark on it. Cost:benefit ratios will be evaluated for this niche market. (c) Iced Tea Research and Development Since Americans drink four times as much iced tea as hot tea, it is assumed that iced herbal tea will enjoy a similar preference over hot herbal tea. This assumption will be tested by questioning both target markets during our hot-tea 'taste-test' promotions and at trade fairs. Research into developing a series of teas for the iced herbal tea market will be an important new activity of Phase II.

Progress 09/15/03 to 09/14/06

Outputs
This Phase II grant had three major objectives: 1) Establish an organic Mamaki farm in the wetter windward side of Hawaii Island. A new organic-certified Mamaki farm was established on the wet, windward side of the island to compare it with the existing farm in the dry, leeward Kau area. The new farm is in Mountain View, 15 miles from our office at a 2,000 foot elevation. The new location is lava land with no soil so we planted in pots. Among the advantages of growing in pots we found: (a) organic certification is easier to obtain using potted plants, (b) pots make the use of the mushroom waste more efficient (see publications) since the plant roots are restricted to the pot and (c) Mamaki grown in pots, particularly in the wet, humid climate of the windward side of the island, grow larger leaves. Two studies were completed. The first (unpublished) showed that leaves from young plants had 50 percent more mass than 1+ year old plants. The second indicated that four species of fungi and two of nematodes worked together to make older plants weaker. Damage from all of these diseases can be minimized with frequent replanting. As a result, we will replant frequently in pots. 2) Establish the hot tea sales through our existing commercial outlets throughout Hawaii. Phase II funds were used to complete the development of our packaging and to change the labelling to meet the new USDA organic foods requirements. Our hot herbal Mamaki teas are now fully commercialized. Sales were only limited by our limited production, with 2006 sales of over $115,500 on Oahu, alone. We estimate that, in 2007, sales will increase at least 40 percent. All of the new product will come from our new farm. Of our more than 60 outlets in tourist-related shops presently selling our herbal teas on Oahu, 45-55 percent of the total is being sold from only two of stores, revealing useful insight into how to get our product to our customer base. However, our teas will only begin selling from JAL in-flight catalogues in 2007 and in JALPAK duty free shops in Japan after that so much more marketing research lies ahead. Mr Wayne Iwaoka of the University of Hawaii's College of Tropical Agriculture and Human Services (CTAHR) conducted some modern and historical research on Mamaki. He provided us with information on the uses and health advantages of the plant which we use for our publicity. 3) Develop a series of Iced Tea products and launch them through our existing commercial outlets in Hawaii. We thought that this would be a simple extension of our hot tea product. Our packaging design was completed and the iced tea boxes were printed during Phase II but the combination of ingredients for the tea bags was found not to work for iced tea. Our supplier used oil-based extracts to provide rare tropical flavours to our teas in order to meet USDA requirements for organic. However, the iced tea made with this formulation has a bad taste profile and oozes oil after the iced tea is made. We have located a new company that can provide a better formulation so that this aspect of our organic herbal tea business will be developed and be fully commercialized before the end of 2007.

Impacts
The SBIR grant allowed us to develop a farm on high-rainfall lava land at a 2,000 foot elevation on the windward side of the island of Hawaii. Planting in pots, we developed a high-value farming system that could allow thousands of similar acres, all zoned agriculture but presently vacant, to be put into use. We have also demonstrated how value added processing and proper marketing can make a farm in Hawaii profitable.

Publications

  • No publications reported this period


Progress 10/01/04 to 09/30/05

Outputs
The farm established for this project was moved from the proposed location to another location five miles (and 1500 feet in elevation) further up the hill from Hilo and the KPP office, offering a more stable lease agreement and support services as well as an elevation similar to our Ka`u farm. After planting over 1,000 plants, it was determined that there may be significant advantages in planting in pots above the ground for nematode control and to maximize soil conditions. A wide variety of potting mixtures will be tested over the next four months and compared with the success of mamaki and koko`olau planted in soil at the same location. During 2005, KPP has successfully negotiated with Japan Airlines(which, along with bringing over 2,000 tourists per day to Hawaii, owns six duty-free shops in Japan) and APHIS, establishing an entirely new export and phytosanitary certificate agreement allowing KPP to sell Hawaii-grown anturiums to Japanese tourists. With this new agreement established, KPP intends to do the same with its line of mamaki teas before the end of this project, significantly increasing the potential sales of our products. In Hawaii, mamaki tea sales increased by an estimated $40,000 during 2005. KPP intends to launch its iced mamaki tea by May of this year.

Impacts
The new location (at a 2,000 foot elevation on the windward side of the island) is located in the middle thousands of acres of rocky land, presently designated "agricultural" but with little agricultural production. If successful, this project could lead the way to establishing a new crop and new concepts for agricultural production in this area.

Publications

  • No publications reported this period