It’s a time-honored ritual for people traveling from Hawaii: a visit to the local grocery, ABC Store or Long’s Drugs to pick up boxes, bags and cans of macadamia nuts to deliver to friends and family as gifts – treats grown in the sun, soil and rain of Hawaii.
But now Hawaii’s most iconic macadamia nut brands are significantly scaling back their purchases of Hawaii-grown nuts. Instead, shipping records indicate, South Africa and Kenya have become big suppliers.
Hawaiian Host Group, which also owns the Mauna Loa brand, earlier this year informed Big Island macadamia nut farmers that it was temporarily shutting down its Big Island processing facility in Keaau, “for at least a year or two,” due to costly problems involving a 50-year-old boiler that burns mac nut shells for fuel.
While Hawaiian Host has long imported nuts from elsewhere to supplement its Hawaiian nuts, this year’s harvest would be different: Hawaiian Host would cease buying from Big Island’s mac nut orchards for now, the company’s president and chief executive Ed Schultz wrote in a letter to growers.
“While we are exploring ways to potentially process some crop this year, the closure at Mauna Loa requires us to temporarily suspend receiving any macadamia nut harvest at our Napoopoo Husking Facility until further notice,” Schultz wrote. “Therefore, we understand that you will look for alternative places to sell your crop this year.”
In an email to Civil Beat, Schultz clarified that the company still will purchase about 4 million pounds of Hawaiian mac nuts for the harvest seasons from September 2022 through April 2023.
Still, the letter reverberated through an industry already reeling from high fuel and fertilizer costs, and other issues related to the Covid-19 pandemic. Now local growers are stepping up with a public education campaign urging people to buy locally grown mac nuts.
In the works is a partnership between a local growers’ association and an international firm that tests chemical and molecular properties of things like food and textiles to determine their origin. In the meantime, last week the farmers took out half-page ads in Big Island newspapers calling on consumers to make sure the nuts they were buying were grown in Hawaii.
The ad from the Macadamia Growers of Hawaii didn’t single out Hawaiian Host or any other company, but instead implored readers to check product labels.
“The truth about products you buy,” the ad said, “isn’t hard to crack.”
After seed crops, such as genetically modified corn grown to produce seeds for farms elsewhere, mac nuts were Hawaii’s second most valuable crop in 2021, according to the U.S. Department of Agriculture. Hawaii macadamia nut farmers produced 51 million pounds of nuts valued at $62.7 million from 17,000 acres, the USDA reported.
But this year looks bleak, said Brad Nelson, director of the Macadamia Growers of Hawaii, who is also president and chief executive of Hawaiian Macadamia Nut Orchards, a 5,000-acre operation that employs 180 workers on the Big Island.
“Millions of pounds of macadamia nuts are on the ground and won’t be harvested this year,” Nelson said in an interview.
If the situation continues, Nelson said, the Hawaiian macadamia nut industry could go the way of sugar cane and pineapple: once important crops that have largely disappeared from Hawaii’s economy.
“This is make or break, really,” he said.
Compounding the challenge for local growers, Nelson said, is that China is stepping up to produce mac nuts on a large scale, joining Australia, South Africa and Kenya as a major player – and one that can undercut Hawaii on price.
Wholesale prices for raw macadamia nuts have plummeted amidst growing global supply, said Andrew Britton Trump, vice president of Island Harvest. The family owned company recently branched out from simply growing macadamia nuts at its farm in Kapaau to making value-added products like organic dark chocolate covered mac nuts, which are sold in stores like Foodland.
Where a farm might have gotten $1.20 a pound for unprocessed, wet-in-shell Big Island mac nuts a year ago, the price now is more like 80 cents a pound, he said. Foreign nuts are much cheaper, Britton said, although he couldn’t quote a price.
Complicating the situation further, Nelson said, is that Hawaiian Host and Mauna Loa are beloved brands that not only promote Hawaii as a macadamia nut region but also, in other years, buy a lot of Hawaii nuts. Nobody wants to see the brand damaged, Nelson said.
“Up until this year, I would say Mauna Loa would do everything they could to buy local macadamia nuts,” he said.
But that changed with the plant closing. Current farms face two problems now, Nelson said. First, he said, there simply is not enough processing capacity on the Big Island to make up for the lost facility. Second, Nelson said, even if a company like Island Harvest could quickly scale up, Island Harvest likely couldn’t find space on store shelves, which are dominated by Mauna Loa and Hawaiian Host products.
Hawaiian Host’s Schultz says the current situation is only temporary.
“Since 1946, Mauna Loa has been committed to processing, roasting and packaging Hawaii-grown macadamia nuts,” Schultz said in an email. “We have been buying wet-in-shell tree nuts from local farmers for many years, and it is a core part of our company’s plans to do this for decades to come.”
A challenge, he said, is that removing mac nut shells requires special equipment. The company did this for more than 40 years at its facility in Keaau, Schultz said. Upgrades scheduled for 2020 were delayed by the Covid-19 pandemic, he said.
By the spring and summer of 2022 it was becoming clear that the company couldn’t keep operating its aging, shell-burning boilers given state emissions laws. The Hawaii Department of Health’s Clean Air Branch in July hammered the company with a $28,300 fine for alleged reporting and maintenance violations involving the boilers.
“Shutting down the boilers was the only option,” Schultz said. “The knock-on effect was that we also had to shut down the nut cracking and roasting part of our business in order to replace portions of the factory.”
Schultz said the company’s path forward includes a recently completed 1.2-megawatt solar power farm, and it’s planning to install new equipment that will operate more efficiently than the company’s old equipment.
“Once the new machinery is in operation, we intend to resume business as usual, with an even higher degree of confidence in our future,” he said.
Shipping data indicates Hawaiian Host and Mauna Loa import nuts from places such as South Africa and Kenya. Schultz wouldn’t confirm or deny that, or say what countries the company imports nuts from.
“We source from a variety of other countries but we have never sourced nuts grown in China and have no plans to do so,” he said.
On a recent evening at Foodland Farms in Ala Moana Center, a steady flow of Japanese tourists was plying the mac nut aisle, which was dominated by Mauna Loa and Hawaiian Host products. And it wasn’t just space that gave those brands an edge. Hawaiian Host and Mauna Loa also beat the competition on price.
For example, one of Island Harvest’s few products given space on the shelves, chocolate covered Mac nuts, were selling for $16.99 for a nine-ounce bag, marked down from $18.99. Foodland’s store brand, Maikai, also offered dark chocolate-covered Hawaiian-grown mac nuts, for $13.49 for a 9.5-ounce bag. But Hawaiian Host beat even the store brand when it came to price; an eight-ounce bag was selling for just $10.79.
Island Harvest’s Trump says having more space and selling imported nuts gives Hawaiian Host and Mauna Loa a big advantage over smaller brands that sell only Hawaiian nuts, including Maikai.
“Not only are we not getting the real estate on the shelf,” he said, “we’re also having to pay a higher price for kernels.”
A next step for the growers is a partnership with Oritain, a New Zealand-based company that performs testing of consumer products like food and textiles to verify the origin of things like cotton used in clothing and grapes in wine.
Oritain’s partners include the U.S. cotton industry, the Lacoste apparel brand and Scottish salmon producer Loch Duart, as well as the Hawaii Coffee Association. The company is now putting together a database showing the trace elements and isotopes contained in Hawaii-grown mac nuts, which it will be able to use to determine the veracity of products purporting to be grown here.
“As an association, we’re not against imports of macadamia nuts into the U.S.,” Macadamia Growers of Hawaii’s Nelson said. But he said products that imply they are made with Hawaiian produce like macadamia nuts should actually use Hawaiian produce.
“If you have a bag and it looks Hawaiian,” he said, “it should be Hawaiian.”
“Hawaii Grown” is funded in part by grants from the Stupski Foundation, Ulupono Fund at the Hawaii Community Foundation and the Frost Family Foundation.
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