Processors

Processors of agricultural and food products.

Processing is a significant bottleneck in the value chain, with limited facilities and high costs associated with food processing on the island. Small-scale producers often lack access to shared processing facilities, and the high cost of building infrastructure is prohibitive. Investment in shared processing centers and cooperative models could alleviate some of these challenges and allow producers to add value to their crops.

Associated Challenges:

Market Access and Promotion	Smaller producers struggle to access international markets due to limited promotion and branding efforts. Expanding the promotion of Hawaii’s premium agricultural products and establishing unified marketing strategies is seen as a priority.
Permitting Delays	Lengthy permitting processes, particularly for infrastructure projects like cold storage and processing facilities, delay necessary investments. Producers face significant challenges navigating Hawaii’s regulatory and permitting framework.
High Energy Costs	Processing facilities, especially for energy-intensive processes like drying and roasting, face high energy costs. These costs impact profitability for macadamia nut and coffee producers, prompting interest in renewable energy solutions.
Cold Chain Management	Maintaining the cold chain is critical for export commodities like flowers, fruits, and seafood. The absence of adequate refrigerated facilities and inefficient cold chain logistics leads to higher post-harvest losses and reduced quality.
Limited Processing Infrastructure	There is a lack of local processing facilities for export crops, forcing producers to rely on off-island processing, which increases costs and risks. Investments in local processing facilities for macadamia nuts and coffee are essential.
Logistical Inefficiencies	Inefficient distribution networks and a lack of cold storage facilities increase the risk of product spoilage during transportation. These inefficiencies disproportionately affect perishable products, such as tropical flowers and seafood.
Complex Food Safety Compliance	Small farmers face difficulties complying with the Food Safety Modernization Act (FSMA) and other food safety standards. The cost and complexity of compliance prevent many from accessing certain markets and limit their ability to scale.
Lack of Available Data and Market Information	Insufficient access to reliable market data and demand information constrains decision-making for both producers and buyers. This results in inefficiencies in pricing, production volumes, and market opportunities.
High Transaction Costs for Small Farms	The lack of aggregation infrastructure leads to high transaction costs for buyers and processors when dealing with small farms, reducing the incentive to source from local smallholders.
Limited Cold Chain Capacity	Inadequate cold storage and distribution infrastructure for perishables (especially fruits and vegetables) result in post-harvest loss, lower quality produce, and missed opportunities in high-value markets.
Inadequate Aggregation and Processing Facilities	Hawaiʻi Island lacks sufficient aggregation and processing facilities, making it difficult for small-scale farmers to reach markets efficiently and profitably. This infrastructure gap exacerbates post-harvest loss and limits access to markets.
Misalignment of Supply and Demand	There is a frequent misalignment between farm production and market demand. Poor demand forecasting and issues with harvest timing lead to inefficiencies, resulting in food waste and revenue losses for small-scale producers.