Tourists: Say, "Cheese!"

Pacific Business News
Friday, December 12, 2003

A Maui cheese maker hopes to carve a niche in diversified agriculture and tourism.
Thomas Kafsack, owner of Surfing Goat Dairy in Kula, which sells goat cheese to buyers nationwide, hopes to market his dairy as a working ranch to tourists, a rural retreat for high-end spenders and a gourmet culinary experience for cheese lovers.

Kafsack, a software engineer turned goat farmer, has obtained permits to build a 12,500-square-foot bed and breakfast on an acre of property above his goat farm. With $3 million in planned investment to top his $3.4 million invested in the farm so far, he hopes to break even in the next couple of years.
Sheep and goat farms have gained popularity in Hawaii as their dairy products find favor with consumers who prefer its lower fat and cholesterol content compared to cow's milk. As of 1997, there were 31 farms with 480 goats in the state -- results of a 2002 survey are not yet available.
At the time of the 1997 survey, the Big Island had the state's largest goat dairy, which later shut down. Kafsack acquired the assets, including nearly 40 goats, and shipped them to Maui. Since then, his farm has expanded to 112 goats producing 50 pounds of cheese daily, marketed in 26 different flavors.
He sells his cheese to restaurants and wholesale and retail vendors.

Software before goatsKafsack's background is in software, not goats -- he co-founded Wohndata, a German software company, in 1978. After visiting Hawaii almost every year, he decided to retire on Maui in 1990 and became a part-time resident of Kaanapali. In 1998, he moved with his family to Maui permanently and a year later bought 42 acres in Kula and started a goat-cheese business inspired by similar farms in France, Austria and Germany. Now Kafsack handles the upkeep of the goats and cheese sales and delivery, while his wife, Eva Marie, is in charge of the cheese production and packaging.

Most of the dairy's cheese (52 percent) is sold directly to consumers. Thirty percent goes to hotels such as Renaissance Ilikai and Kahala Mandarin Oriental, and the remaining 18 percent is sold to wholesalers, primarily on Maui.

Chip Hawkins, executive chef at the Renaissance Ilikai Waikiki, heard about Surfing Goat Dairy but had a hard time finding the company until he stopped by Kafsack's food stall at a trade show. After a couple of months of trying it out, he's been buying about five to 10 pounds of goat cheese weekly since January. Prior to that the restaurant imported its goat cheese from France.
"I like to use local products where available and visitors from the mainland like to see and eat local products as well," Hawkins said.

The cheese is mentioned as Maui's goat cheese in the restaurant's menu items such as grilled salmon salad, island-style pizza and vegetable panini sandwich.

Kafsack says he sells the cheese for an average of $14.38 per pound, even though it costs him $15.74 a pound to produce it. "We are losing $1.36 per pound and much of our losses come from lower prices we [charge] to restaurants," he said.

The dairy sells to restaurants for $12 a pound, to wholesalers at break-even prices and to retailers at a profit. Kafsack wants to increase retail sales to break even.

"A lot of people find us on the Internet as they are searching for good goat cheese," he said. "There are not that many goat dairies on the mainland either so we have gained a reputation as offering a lot of cheese varieties others don't offer."

One of the more popular varieties is a Napa Wrap -- a fresh cheese drained for a day, rolled in grape leaves and soaked in olive oil. The cheese tastes like "champagne" and in the six months since it was launched went on the farm's top-sellers' list, Kafsack says.

Rural retreatMeanwhile, Kafsack wants to expand the farm's operations into a rural retreat for guests interested in gourmet cheese making or for those who want to work and live on a farm.
"We also want to make it a rehab facility for people who are recovering from stroke and heart attack," he said, adding that he is working with the state Department of Health to better understand the needs of such patients.

That will be part of the bed and breakfast facility that Kafsack plans to construct by December 2005.
In the meantime, Kafsack will continue to work on increasing visitors, who now number 40 to 50 a day. He hopes to sign on as a shore destination with Norwegian Cruise Line, which will be making regular visits to Maui.

"We are in talks with them to offer tours of our dairy along with other upcountry farms such as the lavender garden and winery," Kafsack said. "The exposure will help us reach more customers directly."
Kafsack also hopes the cruise line will buy Surfing Goat Dairy cheese for the ships' galleys.
"Typically, they have central buyers for all their produce." he said. "But they decided to buy local produce in Hawaii and we hope to be one of the local vendors they select for their cheeses."