Welcome to the winter 2014-2015 edition of the LBD newsletter! It’s good to be back; being that we missed last winter’s edition, there’s a lot of great coffee, chocolate, tobacco and bourbon (read on!) news to report. The past couple of years have been disappointing for farm output, but not so this year. We’ve had excellent growing weather and we’ve dodged three bullets: hurricanes Iselle, Ana and Julio, all of which fizzled before they became any serious threat to Kauai. We’ve continued to grow as a company, too, with the addition of new land, now totaling 27 acres, new facilities, new products and new employees we now have twenty-three full and part time personnel in Hawai’i, including an expanded management team. We’re continuing with our legislative initiatives at the state and federal levels to create fairness and parity in the tax code for makers and consumers of premium cigars. We’ve come a long way from the days when we were just one coffee roaster and Les Drent’s big dreams, and the coming year is shaping up to be our most ambitious yet…

Ever Upward

Blair Estate is expanding: We’ve bought two road front agriculturally zoned acres on Kawaihau Road in Kapaa where we will consolidate the farm processing operations that are currently scattered among various locations on Kauai. We’ve already cleared and planted a portion of the land, and construction is scheduled to begin in the spring on a comprehensive farm, retail and visitor center complex, which will include an agricultural processing center, tobacco barns, greenhouses, kilns, warehouse space and administrative offices so that the Drent family can at last have their home back (though no doubt they’ll miss the aroma of roasting coffee wafting up from their bottom floor). The public will be invited to come to the visitors center, where they can tour the farm and see how we grow and process our crops into chocolate, coffee and cigars as well as purchase our products.

Whisky in the Jar

Up at our Grove Farm plot, we’ve been using rye as a ground cover among the tobacco plants to help with soil conservation and weed control. “So I hit on an idea,” says Les. “As long as we’re growing rye, why not harvest it and make bourbon?” Like all big ideas, it hit a snag: It quickly became clear that harvesting the rye was impractical, but Les isn’t one to be deterred by snags. We had grown corn in the past, and about half of all bourbons are made with corn mash so, why not use corn instead? It so happened that while visiting a farm fair in Vietnam last summer, Les came across a method of quickly processing corn using husking and kenneling machines. Small farms still comprise 60% of Vietnam’s economic livelihood. We already had drying kilns for tobacco that we could repurpose for drying corn. Since then we’ve taken things to the next level: On our new acreage in Kapaa, we grew corn, and we’ve acquired a grain mill from Canada, and a corn sheller and a grain separator from Vietnam. This season we grew an acre and a half of yellow feed corn and a half-acre of sweet corn, which has a high enough sugar content for distilling. Les has also traveled to the mainland to learn the secrets of distilling from whiskey masters, who have agreed to evaluate the bourbon made with our Hawaii corn. Once we’ve acquired the necessary licenses, we’ll be distilling here in Hawaii, adding another new item to the Islands’ diverse line of agricultural products. Kauai Distilling Company is soon to be a reality!

Bee Happy

As if bourbon weren’t enough, the Blair Estate Coffee farm is producing honey or at least our bees are. Kauai beekeeper Chester Danbury has been kind enough to provide queens and beekeeping expertise to get us started with six hives. If you’ve been following the news, you’re aware that Colony Collapse Disorder has been wiping out bee colonies all over the world and posing a serious threat to agriculture that depends on pollinators. Hawaii was spared for a while, but even here both captive and wild bee populations have been succumbing to varroa mites and other lethal factors. The mite itself is not yet on Kauai, but its arrival is probably inevitable. To prepare we’ve selected bees developed by the USDA specifically to resist varroa mites. The hives have so far produced five hundred pounds of honey, and we’re planning to add eighteen more hives by next spring. Once the hives are mature, we’ll distribute them on our other plots on Kauai and let the bees do what they do best among our coffee, corn, cacao and tobacco.

Retro Tobacco

It’s said that everything comes back into fashion in thirty year cycles, and tobacco it seems is no exception. Many varieties of tobacco have been essentially decommissioned because they are susceptible to diseases like blue mold and black shank. The commonly grown modern tobacco strains like Havana2000 were hybridized to resist those pathogens, but some of the older tobacco varieties, while susceptible, were nevertheless of superior quality. Blights like mold and shank can be devastating in major tobacco growing regions around the world, they’re not much of a problem in Hawai’i, so the Kauai Cigar Company is uniquely positioned to bring these old tobacco strains out of retirement. After experimenting with a number of old varieties, we believe we’ve hit on one that will thrive here on Kauai; we call it Number 38. It’s a strain of Cuban criollo that the Cuban Tobacco Federation has had archived for decades; the last time it was grown was in 1974. We’ve grown Number 38 at our Lihue farm, and we currently have tobacco in the ground at two of our farms in Kapa’a. “It’s just a beautiful tobacco plant,” says Les, “and the cigars we make from it are going to be exceptional, and certainly a throwback in aroma and taste.” Click here to visit our online cigar store www.kauaicigar.com

Growing Your Bliss

Based on recommendations by Hawai’i-based chocolate expert Daniel O’Doherty of Cacao Services, Inc., we’re growing a new variety of cacao Trinitario to expand production and improve the quality of our chocolate. There are three main varieties of cacao cultivated for chocolate: Criollo, Forastero and Trinitario. Trinitario is a hybrid of the first two and was developed in Trinidad in the eighteenth century after a fungus nearly destroyed the island’s Criollo crop. Trinitario is now found throughout the world and has a reputation for producing the finest cacao, the type used to make high-quality dark chocolate, for example. We now have 250 new Trinitario trees maturing in the nursery, and the artisanal chocolate we produce from their cacao will be available at the new visitors center.

Return of Blair Estate Certified Organic Coffee

Thankfully and in contrast to the past couple of years, we’ve had a great coffee harvest this season. Blair Estate Certified Organic Coffee was completely unavailable for longer than a year, but now it’s back, with thousands of pounds of the finest coffee cherries recently harvested and in the process of being roasted. Next year’s harvest is shaping up to be just as good, so we can look forward to quality caffeination for the foreseeable future. With all the activity going on at Blair Estate, we’re going to need it. Blair Estate Certified Organic Coffee Available Now www.coffeetimes.com

Kaua’i Cigar Company News

Tai Erum with Kapaa Safeway manager, Lesah Merritt

The news on the cigar front is mixed. Some of it’s positive, like the aforementioned Number 38 seed and the new acreage in Kapa’a on which we’re growing it. We’re proud to report, too, that Kaua’i Cigar Company products are also now available in Safeway and Times supermarkets on Kauai, Oahu, Maui and the Big Island, with large humidor displays in all stores. What hasn’t been so positive is the devastating self-service ban that took effect on July 1 of this year. Patrons are no longer permitted the freedom to browse premium cigars; displays may be directly accessed by store personnel only. As soon as the ban took effect, we saw an immediate and severe downturn, particularly in the fifty ABC stores statewide, where sales plummeted by 50 percent. While the intent of the ban to keep tobacco products out of the hands of minors is admirable, we strongly believe that premium cigars do not pose a risk to minors and should be exempted from the self-service ban. To that end Hawai’i State Senator Josh Green and State Representative Angus McKelvey have been working on our behalf to adjust the law and give consumers the option to browse and select premium cigars directly. Fortunately, our availability in the new retail outlets has helped counteract losses due to the self-service ban.

Premium Cigars Deserve Equal Treatment and Tax Parity Under the Law!

Les Drent of Kauai Cigar and Matt Dogali of IPCPR discussing efforts to protect premium cigars from burdensome FDA regulations.

It isn’t just the self-service ban that’s harming the premium cigar industry. Those of you who’ve been following our efforts at the Kauai Cigar Company know that we’ve been pushing hard to bring fairness to the FDA’s definition of premium cigars and to the Hawai’i state tax code, which unfairly punishes premium cigar makers. We saw both progress and disappointment during last year’s legislative session, but we have no intention of stopping. Revising the definition of premium cigars at the federal level and creating an even playing field in the state tax code are both critical to the prosperity of the Kauai Cigar Company and anyone else involved in the premium cigar industry.

At the federal level, the US Food and Drug Administration released its proposed tobacco regulations last April. In that 241-page document, the FDA offered two possibilities for defining what constitutes a premium cigar; the language of the second option would distinguish premium cigars from inferior cigar-like products marketed to young people, thereby exempting premium cigars from further FDA regulation. The seventy-five-day public comment period ended in August, and as of the publication of this newsletter the FDA has not arrived at a decision. That could take as long as a year, and while we wait we remain hopeful that the FDA will take the logical approach and exempt premium cigars; we strongly believe (and evidence supports) that premium cigars, when consumed in moderation, do not constitute a serious health risk, or are attractive to minors.

Back home in the Islands, the news has been less encouraging. In addition to the crippling self-service ban, the Hawaii Legislature again denied the state’s premium cigar industry fairness by failing to cap taxes on premium cigars at fifty cents, which is unnecessarily driving the price of locally produced cigars beyond what many consumers are willing to pay. Taken together, the current tax regime and the self-service ban are needlessly harming our company as well as Hawai’i’s consumers and retail stores. It also has the unintended consequence of encouraging consumers to purchase cigars through online distributors, thereby robbing the state of potential tax revenue. Despite the setback, we have not given up, and we are even now planning our strategy for the 2015 legislative session. We have many allies in the legislature, and we believe that we can persuade lawmakers to support legislation that benefits local industry and consumers without compromising public health while ensuring fairness in the tax code. To stay informed of our progress in the upcoming year or sign our petition in support of a Hawai’i state tax cap, visit: www.hawaiicigarassociation.org

New Faces Around the Farm

Donald Fernelius
Donald has joined the team as our Oahu sales representative. Donald grew up in Albert Lea, Minnesota where he played hockey, football and competed in FFA (Future Farmers of America) competition. He joined the Marine Corps in 1991 and discovered his love for cigars when he was stationed in Panama City. Apart from cigars, Donald’s passions are working with wood, playing hockey and going to the beach with his wife, Tamiko, and his daughter Niko.

Daniel Cathey
Daniel has joined our team as an agronomist. Born and raised in Texas, Daniel received a BS in Earth and Environmental Science from the University of Texas and an MS in Agronomy at the University of California, Davis. Daniel has always been interested in nature, plants and especially soil. When his hands aren’t in the dirt, he enjoys spending time with his wife Lisa, reading, gardening and hunting.

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