When I interview Jean-Claude Drui via Microsoft Teams, he’s sitting in his Minnesota coffee roasting facility--the company’s second facility, which opened in 2019. He’s wearing a Hawaiian shirt and a smile, greeting me with a hearty, “Aloha!” I return with, “Moien!”
Hailing from Differdange, the Hawaiian Paradise Coffee president seems happy to switch to Luxembourgish, so we exchange a few phrases. He asks me whether we’ll do the interview in Luxembourgish or English; we decide on English, to which he responds that after 40 years abroad, his English is probably better in any case.
His story is a pretty incredible one--and not just for his insights into the coffee business in Hawaii. It’s a real case study into how a business-savvy person can see an opportunity in the market and make it successfully pay off.
Fulfilling a need in the hospitality sector
After studying hospitality, Drui arrived in the US in 1981, taking his first job at the Hyatt Hotel, LAX Airport (Los Angeles, California). “During the early ‘80s, Hyatt was growing very rapidly,” Drui explains. “They were opening hotels pretty much every other month.”
Although Drui hadn’t anticipated staying in the US more than a few years--his dream being to travel the globe--he ended up moving roughly every six months via Hyatt. “I liked it because I have a general rule, that if the things I own don’t fit in a car, I don’t need it. Every time I got to transfer, I got three weeks’ paid time to get myself from point A to point B, so I’d make these nice, big detours, using it to see the country.” (Today, Drui reckons he’s seen 47 out of 50 US states--with just Maine, Vermont and Alaska remaining.)
Eventually a transfer in 1987 landed him in Hawaii, where he initially had no plans to stay. “First, I had been working mostly city hotels, and I viewed Hawaii as a resort division,” Drui recalls. “And, secondly, I’d had this fifth-grade teacher who always told me, ‘If you kids don’t behave, we’re going to send you off to Honolulu!’”
But he didn’t leave after that--he ended up meeting a woman who didn’t want to go to the mainland. He began to notice that at the hotel restaurants, if espresso machines broke, there was nobody on the island who could repair them. Drui saw that as “an opportunity to create a business that would allow me to stay in Hawaii. And this was very much the same time that the coffee culture in the US was changing. Starbucks was becoming really popular on the West Coast, and none of those trends have arrived in Hawaii yet.”
His company began selling coffee machines from Italy, then clients naturally began to ask about coffee, so Drui got in touch with Lavazza and became a distributor of their coffee. “We did very well, but people asked us why [we] only had Lavazza because Hawaii is the only coffee-growing region in the US,” he explains, adding that it requires not just being near the world’s “coffee belt” (generally near the equator); it also thrives at elevation with volcanic soil.
The arrival of Starbucks [in Hawaii] was really good…
So Drui once again saw an opportunity: not only was coffee grown indigenously on the islands, but he says it was a time when sugar and pineapple plantations were being phased out. In 1999, he purchased a roaster. “Once we were roasting, our business expanded substantially to the point where having additional warehouse space and additional office space became very imperative.”
Starbucks arrived to Hawaii in the 1990s. Drui explains. “They educated people as to what is a good cup of coffee now--and we can argue whether a Starbucks is a good cup of coffee-- but they elevated the knowledge and the awareness of the average person significantly…the arrival of Starbucks was really good.”
In 2007, he acquired 2.5 acres of land for a 40,000ft2 (around 4,088m2) roasting facility and packaging warehouse.
A rough 2020 but a “great” 2022
Drui’s business had been heavily focused on selling for food service (hotels and restaurants), whereas competitors tended to focus more on selling to grocery stores and tourists.
Prior to the covid-19 pandemic, Drui says Hawaiian Paradise Coffee had around a 60% market share of the food service segment. The business was growing, and he decided in 2019 to sign a lease for a second facility on the “mainland”--in Minneapolis, Minnesota--to help ease the time and costs of shipping from Hawaii.
Then covid hit, which caused him to reflect on whether he should press onwards. Again another opportunity: he decided to cater to another segment--grocery stores--and grew from 0% to a current 15% market share in this segment. “2020 was hard. 2021 was better. 2022 was great!” he explains. The company has since bumped up to 75% market share in the food service segment.
Today the company produces 1m kg of coffee per year and is sold in 44 out of 50 US states. Drui anticipates that by end-2024 or early-2025, the company will be moving to a highly automated, 66,000ft2 (6,132m2) facility. He’s also recently signed contracts with brokers and distributors in Korea and Japan. “We ship a full container of coffee to Japan every five weeks; it’s a big part of our business now.”
Drui explains the ways he wants the company to be as carbon-neutral as possible--from photovoltaic cells for energy to primarily buying rainforest-certified coffee. Additionally, “Our packaging should all be compostable and recyclable, or at least we should get to about 50 or 60% of it being compostable and recyclable… It should also be that the product we're consuming including the packaging should as much as possibly be able to be returned to the earth without taking something from the Earth.”