SBIR-STTR Award

It is believed that the future of Hawaii's agricultural diversification and sustainability efforts have great economic potential and continues to evolve as social and economic factors change. As part of Hawaii's agricultural diversification, sustainability, and community development effort, Kini Po-Po Creations, Inc. has chosen to compete in the organic herbal tea market, utilizing traditional Hawaiian healing herbs. The company has popularized the use of the mamaki and the kookolau plants in the development of a unique Hawaiian herbal tea that is grown organically on a commercial scale to support the local and tourists on the islands. However, a critical component of success and for growth outside the islands is Kini-Po-Po's ability to develop a sustainable marketing strategy that allows it and other small family farms to become and remain competitive in the domestic and international tea and organic herbal tea marketplaces. The goal of this effort is to improve the livelihoods of rural people in Hawaii in an environmentally friendly, equitable, and sustainable manner by giving people control of their resources and a lifestyle they are used to. This proposal aims to determine appropriate marketing strategies for Kini Po-Po to pursue and to position itself in the global marketplace as a major cooperative producer, manufacturer, and marketer of organic Hawaiian herbal products in niche markets. ANTICIPATED RESULTS & POTENTIAL COMMERCIAL APPLICATIONS OF RESEARCH It is Kini Po-Po's goal to expand the production, development, and marketing of organic Hawaiian herbal teas and to initially gain 2 percent of Celestial Seasonings total herb tea market. This would result in an initial market size of over $2 million annually and would require an additional 68 acres of Hawaiian healing herb plants to be cultivated, at an estimated farm gate value of approximately $750,000. It is believed that these initial results are very achievable and is based on recent sales experience of similar teas to the islands' tourist and local markets. Within five years, it is estimated that the project will require over 200 acres and will generate over $2.2 million dollars to Hawaii's farmers.

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. 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. APPROACH: (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