It would be too indulgent to say that Hawaii is about to be drenched in locally made chocolate, but the fledgling industry is on the verge of a sweet surge with a $10 million factory slated for a public opening next month on Maui.
The enterprise, led by a wealthy retired biophysicist, in October began pumping out its first batches of premium chocolate, made from high-quality cacao imported from Ecuador, at a two-story facility in Lahaina that has the largest chocolate production capacity in the state by far.
Maui Ku‘ia Estate Chocolate, formed by Gunars Valkirs, is something of an unlikely venture in that its founder didn’t intend to work when he moved to Maui in 2007. He has also pledged to give every cent of net profit from the chocolate business to Maui charities.
Hawaii is the only state in the country where cacao, a tree that produces beans that are the base ingredient in chocolate, can be grown commercially because of favorable climate conditions. Still the crop has yet to become a major piece of diversified agriculture here despite four decades of ambition and effort, in part because of missteps, premature market timing and daunting expense.
Now, Ku‘ia Estate is poised to help change that history.
“This is definitely a big deal,” said H.C. “Skip” Bittenbender, a retired University of Hawaii College of Tropical Agriculture and Human Resources researcher who has been instrumental in helping advance cacao farming in the state with field trials and other work.
“Gunars is doing cutting-edge work,” added Tamara Butterbaugh, a principal of Manoa Chocolate, an Oahu company that has been making chocolate since 2012 from mostly foreign cacao but also cacao grown in Hawaii by several small farmers.
Ku‘ia Estate’s factory, which is in a two-story building that includes a retail store, event space and a bar that will serve chocolate drinks and desserts, has the capacity to make about 175,000 pounds of chocolate annually.
To make that much would take about 100 acres of fully mature cacao trees. Hawaii last year had about 150 acres of cacao growing, based on an industry survey, but much of that is not yet mature.
Additionally, most of the cacao in Hawaii — 85 acres — is grown by an affiliate of Dole Food Co., Waialua Estate Chocolate, that sells beans to Guittard Chocolate Co. on the mainland, makes some chocolate at Dole Cannery in Iwilei and has plans to develop a chocolate factory at its Dole Plantation tourist attraction in Wahiawa.
Dole’s cacao plantings are up from about 20 acres in 2013 and are not yet in full bean production.
7 years to mature
Bean-to-bar chocolate making starts with removing the cacao beans from pods harvested from cacao trees. The beans are then fermented and dried before roasting and husking. The next step involves grinding the beans into a cocoa paste, or “liquor.” The paste is refined further, heated and mixed with sugar and potentially other ingredients to produce chocolate, and then cooled and molded.
To feed the new Maui factory, Ku‘ia Estate is importing premium dried cacao beans from Ecuador and is expanding with a source in Brazil. The company also has 20 acres of cacao growing in Lahaina on land once farmed in sugar cane. The first harvest from this orchard, which was planted from 2015 to 2017 and will take seven years to fully mature, yielded about 4,400 pounds of beans that are slated to be made into chocolate early next year.
Valkirs said his company’s plan is to expand its cacao orchard to 50 or 60 acres and also seek out other Hawaii cacao growers who can contribute large quantities of great beans.
The Ku‘ia Estate factory, and more like it, are seen by Bittenbender and others as being key to large-scale expansion of Hawaii’s cacao industry. That’s because selling beans, even premium- quality ones grown locally, isn’t much of a viable business.
“We really can’t survive as a dry bean exporter,” Bittenbender said.
Valkirs said that in Hawaii it costs $1 million to establish 10 acres of cacao, which needs shade and wind protection, and raise the crop to full maturity over seven years. At that point, he said, breaking even financially is likely the best such a farm can expect selling beans, assuming a super-premium price.
“That doesn’t sound like a very good business model,” he said. “You need the value-added (component, i.e. chocolate production) to make a business out of growing cacao.”
Yet the cost of developing a big factory is also discouraging, especially without a ready supply of premium cacao and consumers primed to pay premium prices for bean-to-bar chocolate made in Hawaii from foreign or locally grown cacao.
A bittersweet history
Efforts to develop a cacao industry in Hawaii date back to a venture in the 1980s backed by chocolate giant Hershey. That venture failed, and so did other big plans, including a $10 million factory and visitor center envisioned for Hawaii island in 2000.
For Valkirs, financial issues weren’t a concern, because he had money to invest and wasn’t dependent on earning a profit.
Valkirs, 67, co-founded California-based medical diagnostics firm Biosite Inc. in 1988 and retired to Maui in 2007 when the company was acquired for $1.7 billion.
At 55, the then-new Maui resident didn’t plan to work again. But a curiosity about cacao turned into the endeavor that now has Valkirs working in the Ulupono Street factory in Lahaina and lining up restaurants and hotels to buy his product, which costs about $1 for a 5-gram piece not much bigger than a postage stamp, or $6 for a 25-gram bar, and comes in five dark and five “dark milk” flavors.
Valkirs planted a few dozen cacao trees around his Kapalua home after hearing that Hawaii was the only place in the U.S. where the crop can grow. Then he got in on a varietal trial in 2010 being run by Bittenbender, who had selected 10 promising varieties to test in different parts of Hawaii.
The 40-tree test plot Valkirs cared for failed, largely because of wind, but he was intrigued enough to pursue starting a commercial venture in 2014 and found 50 acres of former sugar cane fields on the hills above Lahaina to lease from Kamehameha Schools.
“My hobby growing 40 trees at my house became a 50-acre cacao farm,” he said. “Sort of a bit of a step up.”
In addition to planting the first 20 acres, much research and development work went into how to source good foreign cacao and turn it into fine chocolate. To do that, Valkirs consulted with Dan O’Doherty, a former graduate student of Bittenbender’s who became a cacao and chocolate expert, and undertook production tests initially at Manoa Chocolate and then at a UH facility on Maui using cacao from Ecuador.
Valkirs helped Manoa Chocolate upgrade its equipment, and the Oahu company is working with O’Doherty to start planting initial cacao trees on a planned 30-acre farm on Oahu’s North Shore next year.
Another big venture is being pursued by two Oregon agriculture investment and management firms that partnered with Kamehameha Schools to establish a more than 200-acre farm in Haleiwa that includes 137 acres for cacao.
That venture, announced in May and dubbed Kalona Brand Co., is slated to include development of a chocolate production facility, according to company CEO Kawika Burgess.
Valkirs projects that Ku‘ia Estate, which has 12 employees and is hiring more, should produce a small profit next year.
Part of the company’s profit will go to the Makana Aloha Foundation, which was founded by Valkirs and his wife, JoRene, in 2007 and has given about $250,000 in annual grants to Maui nonprofits. Contributions to the foundation will increase its endowment and grant making. Ku‘ia Estate also will contribute profits to Maui charities selected by wholesale business customers, such as hotels and restaurants.
Krishna Narayan, vice president and general manager of Ku‘ia Estate, said donated profits should amount to millions of dollars a year when the farm and chocolate business are mature.
“This is his passion,” Narayan said of Valkirs.