Aggregation
Floriculture & Nursery: Aggregation in the floriculture and nursery industry on Hawai'i Island largely depends on the product type and destination. For export-focused cut flowers, larger producers and cooperatives aggregate products from smaller growers to meet market demands. The Hawai'i Floriculture and Nursery Association (HFNA) plays a vital role in helping growers organize and market their products, with over 300 members contributing to these efforts. Aggregation for nursery products geared toward landscaping often occurs through garden centers and landscaping businesses, which source from multiple local growers. The Hawai'i Export Nursery Association (HENA) also supports smaller growers in meeting export requirements, particularly regarding phytosanitary standards.
Coffee: The coffee industry utilizes a combination of individual farm processing, cooperatives, and larger processors for aggregation. Cooperatives like the Kona Pacific Farmers Cooperative, established in 1910, represent hundreds of farmers and provide aggregation, processing, and marketing support for smallholders. Larger entities such as Hawai'i Coffee Company also play a key role by purchasing cherries from smaller farms and helping maintain high product standards. Aggregation is essential for small farms to access larger markets, making cooperative and processor relationships crucial for the sector.
Macadamia Nuts: Aggregation in the macadamia nut sector benefits from an established infrastructure, with large processors handling nuts from both their own orchards and independent producers. Cooperatives such as the Hawaiʻi Macadamia Nut Association help small and medium producers pool resources, reach marketable volumes, and access larger processing facilities. Due to the need for rapid post-harvest processing to maintain product quality, efficient aggregation systems are critical for the industry. This well-developed aggregation system allows smaller producers to benefit from economies of scale and maintain high product standards.
Aquaculture: In aquaculture, aggregation processes vary depending on whether the product is intended for local consumption or export. For local markets, finfish and shellfish are aggregated through wholesale distributors, retailers, and restaurants. Export markets, particularly for high-value ornamental fish and algae, often require specialized handling, with producers managing their own aggregation and shipping. The Hawai'i Aquaculture and Aquaponics Association (HAAA) plays a coordinating role for local producers, helping facilitate product aggregation for both local and export markets.
Processing
Floriculture & Nursery: Processing in the floriculture and nursery sector involves post-harvest activities like cleaning, trimming, and packaging flowers for export. This extends to bundling, treating with preservatives, and preparing nursery plants for shipping, with an emphasis on phytosanitary standards. Advanced post-harvest facilities such as Green Point Nurseries in Hilo offer cold storage and computer-controlled grading systems for cut flowers like anthuriums. Nurseries also engage in repotting, pruning, and preparing landscaping plants for export. Meeting stringent phytosanitary requirements is critical for the export market, with inspections conducted at airports in Hilo and Kona.
Coffee: The processing of coffee on Hawai'i Island uses primarily the wet method, which includes pulping, fermenting, washing, and drying beans. Processing is centralized in mills that handle millions of pounds annually, like the Ka'u Coffee Mill. Kona coffee processing includes strict grading systems enforced by the Hawai'i Department of Agriculture, with the "Extra Fancy" grade representing the highest quality. Recent trends in experimental processing methods, such as honey processing, have introduced unique flavors into the specialty coffee market, further enhancing Hawai'i’s reputation for high-quality coffee.
Macadamia Nuts: Macadamia nut processing is a critical stage in maintaining the premium quality for which Hawaiian macadamias are known. Facilities on Hawai'i Island handle husking, drying, cracking, and sorting of nuts, while developing value-added products such as oils and butters. The energy-intensive drying and roasting processes present significant challenges, with some processors exploring renewable energy solutions to mitigate costs. The development of local processing facilities is essential to reduce reliance on off-island processing and maintain competitiveness in international markets.
Aquaculture: In aquaculture, processing varies by species. For finfish, basic cleaning and icing may suffice, but higher-value products like abalone undergo more extensive processing. For instance, Big Island Abalone Corporation processes its product into canned and frozen abalone steaks. Algae production at Cyanotech involves advanced processing to produce dried and encapsulated products. Maintaining the cold chain is essential, and several facilities on Hawai'i Island are equipped with the necessary freezing and cold storage technologies to support the export market.
Distribution
Floriculture & Nursery: Distribution of floriculture and nursery products relies on both air freight for export and inter-island barges for local sales. Export markets are highly dependent on maintaining product quality during transportation, especially for perishable goods like cut flowers. A notable aspect of the distribution network is the informal "suitcase trade," where individuals transport small quantities of flowers during travel. While this channel is difficult to quantify, it is an important component of the local distribution system for high-value products.
Coffee: Coffee distribution on Hawai'i Island spans local and international markets, with air freight playing a key role in exporting green and roasted coffee. Roasted coffee, with its shorter shelf life, relies heavily on efficient distribution through Kona and Hilo airports. Local distribution is more straightforward, often involving direct delivery to retail outlets and the tourism industry. The infrastructure for distribution is essential to maintain product quality from farm to market, particularly for international shipments.
Macadamia Nuts: Macadamia nut distribution involves both local retail and international exports, with efficient transportation to shipping ports being crucial. The ports of Hilo and Kawaihae are vital for moving products off the island, although the high transportation costs and logistical challenges continue to impact profitability. Local distribution focuses on tourism-related retail outlets, including gift shops and hotels. Improvements in distribution infrastructure, particularly cold storage, could enhance efficiency and profitability for both local and export markets.
Aquaculture: Aquaculture products rely on a mix of local and international distribution networks, with air freight playing a critical role for perishable goods destined for export. NELHA (Natural Energy Laboratory of Hawaiʻi Authority) supports many of these operations, providing access to resources like deep seawater pipelines for aquaculture facilities located within its grounds. For local markets, distribution is facilitated through refrigerated trucks and barges, although logistical challenges and high transportation costs remain a persistent issue.
Marketing
Floriculture & Nursery: Marketing efforts for Hawai'i’s floriculture and nursery products capitalize on the exotic appeal of tropical flora, supported by the "Grown in Hawai'i" brand. HFNA promotes these products through international trade shows and digital marketing campaigns, emphasizing sustainability and the unique environmental conditions of Hawai'i Island. Agritourism, including tours and workshops at nurseries and flower farms, has become a valuable marketing tool. Large events like the Hilo Orchid Show also help boost the industry’s visibility and sales.
Coffee: Hawai'i’s coffee marketing emphasizes its origin and quality, with the "Kona Coffee" brand protected by state law. Marketing strategies increasingly focus on single-estate coffees that offer traceability and distinctive flavor profiles. Sustainability practices, such as organic certification and fair labor policies, are becoming more integral to marketing efforts. Events like the Kona Coffee Cultural Festival and collaborations with chefs and tourism companies further elevate the global status of Hawai'i’s coffee.
Macadamia Nuts: Macadamia nut marketing leverages the Hawaiian brand’s strong international recognition. Emphasizing the unique growing conditions of Hawai'i’s volcanic soils, the nuts are marketed as premium products, with a growing trend toward single-origin marketing. Sustainability is becoming more important to consumers, leading to marketing campaigns that highlight environmentally friendly production methods. Macadamia nuts are a popular export, and tourism plays a crucial role in local sales, with many gift shops and hotels featuring the product.
Aquaculture: Marketing in the aquaculture sector focuses on the sustainability and quality of products like Kona abalone and Hawaiian spirulina. The "Hawaiian" brand carries weight in domestic and international markets, particularly for high-value and exotic species. Agritourism is a growing aspect of marketing, with facilities like the Ocean Rider Seahorse Farm offering educational tours that attract visitors. Sustainability is a key selling point, particularly for environmentally conscious consumers, with many producers emphasizing their use of recirculating aquaculture systems.
Sales
Aquaculture
Sales channels for Hawai'i Island's aquaculture products are diverse, targeting local, domestic U.S., and international markets. Locally, sales are driven by restaurants, hotels, and individual consumers, with high-end resorts being significant purchasers of locally produced seafood. The tourism industry also plays a vital role in driving demand for aquaculture products such as abalone and finfish. Export sales primarily target the U.S. mainland and Japan, with growing markets in other Asian countries and Europe. The industry has seen increasing interest in value-added products, particularly algae supplements. For instance, Cyanotech, a major player in the industry, has developed a highly successful e-commerce platform for its BioAstin and Hawaiian Spirulina products. This shift to direct-to-consumer sales, driven by the rise of e-commerce, was particularly accelerated by the COVID-19 pandemic, which led to a temporary downturn in the restaurant sector but boosted demand for health supplements. Many aquaculture businesses adapted by pivoting to local and online markets.
Aquaculture producers on Hawai'i Island face significant logistical challenges, particularly regarding the high costs of transportation and maintaining cold chains for fresh seafood exports. However, the continued interest in sustainably sourced, high-quality Hawaiian aquaculture products positions the industry for further growth, both domestically and internationally. The increasing consumer demand for health-conscious products like spirulina, along with expanding market opportunities in Asia, represent key areas for growth in the sector.
Floriculture & Nursery
Sales channels for Hawai'i Island's floriculture and nursery products are equally diverse, catering to local, domestic U.S., and international buyers. Locally, the landscaping industry, hotels, and individual consumers drive demand for potted plants and cut flowers, with a significant portion of sales coming from the tourism sector. High-end resorts and hotels purchase flowers and landscaping plants for aesthetic purposes, while local consumers are increasingly interested in houseplants and ornamental plants. Export sales focus on mainland U.S. markets and Japan, with growing interest from Asia and Europe. Online sales have become increasingly important, particularly for rare and exotic plants, with several nurseries developing successful e-commerce platforms that ship directly to collectors worldwide.
The COVID-19 pandemic had a profound impact on floriculture and nursery sales, especially for the cut flower sector, which relies heavily on events and tourism. However, the shift toward online sales and the growing interest in gardening during the pandemic helped to boost the nursery sector. Looking forward, the focus on sustainability, particularly in integrated pest management and organic practices, is expected to attract further interest from environmentally conscious consumers. The floriculture industry continues to play a pivotal role in Hawai'i’s export economy, driven by its exotic appeal and the growing demand for sustainable products.
Macadamia Nuts
Sales of macadamia nuts from Hawai'i Island span both export and domestic markets, with export sales making up a significant portion of overall revenue. Major export markets include North America, Asia, and Europe, where Hawaiian macadamia nuts are positioned as premium products. Domestically, the tourism industry drives demand, with airport shops, hotel gift stores, and specialty food retailers being key sales points for macadamia nuts, particularly as popular souvenir items. The rise of e-commerce has also allowed even smaller producers to reach customers worldwide, enabling direct-to-consumer sales through online platforms. Many growers have successfully targeted niche markets with personalized packaging and gift sets, particularly for corporate gifting. Agritourism has further enhanced sales, with many macadamia orchards offering tours and on-site stores, providing an additional revenue stream.
The high value of macadamia nuts has led to the development of a gourmet market segment, where premium packaging and specialty varieties command top prices. However, challenges remain, particularly with logistical inefficiencies and the high cost of transportation, which affect the profitability of export sales. Additionally, market volatility and fluctuations in nut prices have posed challenges for growers in recent years. Despite these hurdles, the unique branding of Hawaiian macadamia nuts and their strong market positioning continues to support steady demand.
Coffee
Sales channels for Hawai'i Island coffee are similarly diverse, with a substantial portion of revenue generated from both domestic and international markets. Domestically, sales are bolstered by the tourism industry, with many coffee farms offering tours and on-site sales. This direct-to-consumer approach not only provides immediate revenue but also helps build brand loyalty among tourists who often purchase coffee to take home. E-commerce has grown significantly since the COVID-19 pandemic, enabling small farms to reach global customers and capture more of the retail value of their coffee. Online sales now constitute a major portion of the revenue for many coffee producers, particularly for those in the specialty coffee market.
In international markets, Hawai'i Island coffees are regarded as ultra-premium products, commanding high prices due to their unique flavor profiles and limited production. Japan has traditionally been the largest export market, though interest from other Asian countries and Europe is growing. The high value and limited supply of Kona and Ka'u coffees have led to issues with counterfeiting and mislabeling, prompting legal battles over the use of the Kona name in coffee blends. As a result, protecting the brand identity of Hawaiian coffee is a critical focus for the industry moving forward.
Papaya
The papaya industry on Hawai'i Island has faced significant challenges in recent years, particularly in terms of declining production and market access. In 2023, papaya production statewide fell by 12% to 10.25 million pounds, with utilized production dropping by 3% to 9.54 million pounds. Despite these declines, the value of utilized production saw a slight improvement of 4%, reaching $6.5 million in 2023. This was due to the record average price of 68 cents per pound, up four cents from the previous year. The papaya market is heavily reliant on local demand, with sales driven by hotels, restaurants, and individual consumers. The tourism industry plays a critical role in boosting papaya sales, particularly in resort areas where tropical fruits are a staple in culinary offerings.
However, producers face ongoing challenges, including high transportation costs and difficulties accessing mainland U.S. markets. Additionally, pests and diseases such as the Papaya Ringspot Virus have affected yields, leading to fluctuations in production and pricing. Despite these hurdles, papaya remains an important crop for the local agricultural economy, with opportunities for further market growth through improved pest management and export strategies.