Since its inception in 1986, the Partnership’s business has been limited to growing and farming macadamia nuts for sale to nut processors and marketers. Consumer demand for macadamias and other tree nuts has increased in recent years, providing an opportunity for the Company to achieve more favorable margins and wider recognition for Hawaiian macadamia nuts as a better for you food alternative by marketing branded products directly to the public through conventional distribution channels.
This new strategy has the added advantage of reducing the risk associated with production and revenue concentration with a wholesale buyer or selling into the commodity markets. The Partnership is leveraging management’s expertise in macadamia production and sales to expand the business to include processing and marketing of bulk nuts that are packaged into branded and bulk forms for consumer markets. The branded products will be sold under the Royal Hawaiian Orchards brand through Royal Hawaiian Macadamia Nut, Inc., a wholly-owned subsidiary of the Partnership.
“Our orchards and farming operations are tremendous assets, yet we see far greater value that can be unlocked for our investors. We are transforming our commodity-driven business to become a value-added business — one that has more strength, resiliency and opportunities for growth and value creation,” said Dennis Simonis, President of Royal Hawaiian. “We have identified a significant market opportunity for better for you macadamia nut snacks, and are receiving considerable interest from retailers for our new line of branded macadamia nut products targeted to health and nutrition stores in Hawaii and the continental U.S.”
The Company is capitalizing on growing consumer awareness for the health benefits of nuts to market a unique product line — macadamias as a better for you snack. The initial product lines include fruit and macadamia crunches in flavors such as mango pineapple, papaya lime and papaya banana, as well as seasoned macadamias in flavors such as sea salt, Hawaiian barbeque and Maui onion. All products are made with fresh, wholesome ingredients that do not contain sulfites, artificial colors and flavors, or other harmful additives.
As one of the world’s largest growers of premium macadamia nuts, the Company has ample production resources with which to pursue the largely untapped market for better for you macadamia nut snack products. Royal Hawaiian expects to have a competitive first mover advantage in defining its market, which is separate and distinct from chocolate and candy covered nuts.
The Company also intends to support future growth potential by improving and expanding its farming operations. Today, Royal Hawaiian Orchards owns or leases approximately 5,070 tree acres of macadamia nut orchards in three locations on the island of Hawaii. In the future, management will pursue the acquisition of additional mature macadamia nut orchards in Hawaii while also restoring certain currently owned orchards to improve yields, reduce spoilage and improve kernel recovery.