Hawaiian Host to buy rival firm Mauna Loa

Two big pieces of Hawaii’s macadamia nut industry will be consolidated through a purchase of Mauna Loa Macadamia Nut Corp. by Hawaiian Host Inc.

Honolulu-based Hawaiian Host announced Tuesday that it has agreed to buy Hilo-based Mauna Loa from candy-making giant The Hershey Co. for an undisclosed price.

Hawaiian Host said it will maintain Mauna Loa as a subsidiary and separate brand.

If the sale is completed as anticipated by the end of March, it will return Mauna Loa to local control after 15 years and consolidate ownership of two major macadamia processors that buy nuts from farmers to make packaged snacks and candies.

"Both companies have a long history of operating in Hawaii and sharing our products with the world,"Keith Sakamoto, Hawaiian Host president and chief executive officer, said in a statement. "We remain committed to continuing to offer the same quality products our customers have grown to know and expect."

Sakamoto said no immediate staff changes are planned within the two companies, which employ more than 300 people in Hawaii.

Arepresentative of Pennsylvania-based Hershey could not be reached for comment Tuesday. The sale represents a relatively small deal for Hershey, which has annual sales of more than $7 billion.

Hawaiian Host was founded in 1960 by Mamoru Takitani when he moved from Maui and bought the Honolulu confectionery business Ellen Dye Candies, which opened in 1927. Hawaiian Host claims to be the first seller of chocolate-covered macadamias.

Mauna Loa’s history dates from 1946, when one of Hawaii’s Big Five companies, Castle &Cooke Ltd., established an orchard in Keaau south of Hilo. Another local Big Five firm with its own macadamia farm operations on Hawaii island, C. Brewer &Co., bought Mauna Loa in 1974.

Local ownership of the mac nut processor was lost as part of a C. Brewer liquidation that resulted in San Francisco-based private equity firm The Shansby Group buying Mauna Loa in 2000.

Then Hershey, the nation’s biggest candy maker, snapped up Mauna Loa in 2004 for $130 million. At that time, Mauna Loa had about 400 employees and annual sales of about $80 million, and was described as the largest macadamia nut processor in Hawaii.

The company over the past three years faced dramatic cutbacks in how many nuts it could buy from the state’s largest macadamia grower, Royal Hawaiian Orchards LP, which announced in 2012 that it would gradually stop selling its nuts to Mauna Loa in favor of establishing its own retail snack line.

Royal Hawaiian had sold all its nuts to Mauna Loa for more than 40 years, and in recent years reported selling roughly 20 million pounds of nuts to Mauna Loa annually. The last contract for Royal Hawaiian to sell its nuts to Mauna Loa expired Dec. 31.

Hawaiian Host said the Royal Hawaiian move was not its reason for buying Mauna Loa, though it declined to say how many macadamia nuts Mauna Loa processes. The purchase announcement said Mauna Loa has a capacity to process about 40 million pounds of macadamias per season.

Sakamoto said the acquisition creates a great opportunity for both companies and a foundation for continued success.

"Both Hawaiian Host and Mauna Loa have a long history of supporting our local growers and farmers as well as our community,"Sakamoto said in the statement. "And with our more than 300 employees in Hawaii we will continue that legacy together."