Hilo-based ML Macadamia Orchards LP increased nut production in the first quarter, but spending on its effort to create its own retail brand of products hurt earnings.

The company reported Thursday a loss of $8,000 on revenue of $3.5 million for the three months that ended in March. That compared with a $49,000 profit on revenue of $2.5 million for the same period last year.

The first quarter typically involves relatively little of the company’s annual harvest, which is concentrated in the second half of the year.

Nut production in the first quarter totaled 5.2 million pounds, up from 3.5 million pounds a year earlier. Nut prices were also slightly higher in the recent quarter. But higher expenses hurt ML Macadamia’s bottom line. Those expenses included $170,000 to develop a retail line of products under the Royal Hawaiian Orchards name as part of a plan announced in March.

ML Macadamia is Hawaii’s largest grower of mac nuts.

The company sells its entire harvest to Hershey Co.’s Mauna Loa Macadamia Nut Corp. but plans to move from wholesaling to retail product development and sales.

The plan is projected to cost the company $8 million to $9 million through the next four years, including $400,000 this year and $2 million next year.

Those expenditures are expected to produce losses for the company through 2013.

The company hopes the expansion plan will bring profits in 2014.