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Hawaii’s largest macadamia farm plans to exit the business of producing and selling packaged retail snacks by selling to a competitor after a six-year effort that failed to become a bigger profit generator.
Royal Hawaiian Orchards LP announced Wednesday that it has agreed to sell all its assets used in its retail products business to an Australian company that has a line of packaged mac nut products under the MacFarms brand.
The buyer, Buderim Group Ltd. subsidiary MacFarms LLC, will provide Royal Hawaiian with 11.2 million shares of stock in Buderim as payment for the assets. Royal Hawaiian also will agree to supply MacFarms with raw mac nuts and processing services.
Hilo-based Royal Hawaiian, which farms about 5,400 acres of macadamia trees on Hawaii island, historically sold all its crop raw in bulk primarily to snack maker Mauna Loa Macadamia Nut Corp. But in 2012, the company began making packaged snacks in a strategy to earn a bigger return.
Initial products included a dozen varieties of flavored nuts and fruit-and-nut clusters. Dark-chocolate-covered macadamias followed in 2015 and then macadamia butter and milk in 2016. Royal Hawaiian’s packaged foods became available nationally in about 20,000 grocery, natural food and other stores. But the endeavor was costly and put financial strain on Royal Hawaiian, which last year reduced the variety of products in stores and looked at reducing the number and types of retail channels to supply.
Denver investor and former Quark Software Inc. CEO Farhad “Fred” Ebrahimi is the majority owner of Royal Hawaiian, though partnership shares in the company typically trade lightly on a public over-the-counter stock exchange.
