Royal Hawaiian Orchards seeks to grow retail mac nut brand
"Our strategy is to capitalize on consumers' views of nuts as an upscale healthy snack that can command prices above traditional mass-marketed products," Wallace said, noting that the company's products have no artificial ingredients or genetically-modified organisms, are gluten-free and contain no sulphites, issues that resonate with many consumers. "We are leveraging the existing nutritional properties inherent in tree nuts in our line of macadamia-based foods."
The company introduced its Royal Hawaiian Orchards brand of macadamia nut-based snacks in late 2012 and is now distributed in more than 3,000 stores in Hawaii and on the Mainland.
"The funds from this rights offering will be used to quickly expand distribution nationwide to national, regional and independent grocery and drug chains, as well as mass merchandisers, that target consumers with healthy eating habits and the disposable income needed to afford premium products," Wallace said. "By pursuing a branded products strategy and continuing to farm macadamias, we believe that we may have a pricing advantage, because we are able to produce nuts from our own orchards at a relatively fixed and currently favourable cost and do not have to compete to purchase nuts from third parties."
Wallace said that the strategy also mitigates the company's exposure to fluctuating commodity prices.
Source: bizjournals.com
