Hawaii Business Magazine Article — Find the original version here
The Hawaii brand is beloved around the world and there are mom and pop enterprises that want to give that love back but don’t know how.
Enter Mana Up, a new accelerator aimed at promoting homegrown Hawaii products and transforming them into million-dollar companies and brands. The new initiative launched an intensive 12-week accelerator session in January for its first cohort of 10 companies, chosen from a pool of 85 applicants. The locally based companies get help with marketing, pricing, distribution, scaling and other strategies to support their rapid growth beyond the state.
Mana Up is the brainchild of three people: well-known local entrepreneur Meli James, president of the Hawaii Venture Capital Association; relative newcomer Brittany Heyd, a founder of the globally funded startup accelerator 1776; and Michael Cheski, a Punahou grad who has helped launch more than 100 products with brands such as TLC, Food Network, Amazon and most recently, Shopify.
Mana Up’s goal: Take 20 Hawaii companies a year with revenue in the $100,000-a-year-and-up range and grow them tenfold over the next five or six years. They must be companies with local products and headquarters in the Islands. The point, say the founders, is building the Hawaii brand with authentic products that support the economy, create jobs and produce a new generation of CEOs and other business leaders. Support for the new venture comes from well-established Hawaii institutions such as Kamehameha Schools, which are underwriting the cost of operations and will have ongoing opportunities to be associated with young, upcoming growth companies. As well the three Mana Up partners will be drawing on the extensive networks of mentors they have developed over the years.
“We have some great entrepreneurs creating local products, but the challenge is mentorship and access to resources and capital.”
—Meli James, Entrepreneur and co-founder of Mana Up
“We have some great entrepreneurs creating local products, but the challenge is mentorship and access to resources and capital,” says James, who most recently was head of new ventures at Sultan Ventures and program director of XLR8UH, UH’s venture accelerator. “How do we take something that is a regional strength – our brand – and put attention toward product innovation? This sector is actually a huge market but we haven’t been able to connect the dots.”
That’s what Mana Up hopes to do.
“China produces so many products that are using the Hawaii brand, and you see products across the Mainland using the Hawaii brand, and yet they have nothing to do with Hawaii. Maui Style Potato Chips, for instance, are probably the top-selling brand in the U.S. and yet they’re not made here,” James says.
“The brand of Hawaii is universally loved and yet Hawaii doesn’t profit from its own brand. Many of the companies at $300 million annual revenue are not based here. So how can you start moving market share to companies here that have the authentic narrative? How do we give local companies a step up in order to play ball? That’s what we’re going to do.”
The partners say they will use strategies that appeal to Millennials, a generation that has passed the Baby Boomers in numbers and will soon pass them in shopping power. Millennials want authenticity, says James.
Mana Up founders Meli James, left, Michael Cheski and Brittany Heyd.
“They turn the product over and read the fine print. They want to know who is the founder? Is it a clean product? People are searching for more authenticity and looking for the culture. It’s something we could take advantage of. Take the example of Neiman Marcus: They actually have a Made in Hawaii section and even have pictures of the products with the founders and their stories.
“The store’s epicurean section is the highest grossing in the world and half is made in Hawaii,” says James. “What’s funny is it’s almost unstocked. People come in and buy out shelves of products. They literally can’t keep the shelves stocked because they’re being bought like crazy. We know this market exists and we know it’s much larger than what’s being bought here. People want these products.”
Interestingly, each of the 10 companies in the first cohort have some type of agricultural component in their product mix, says James. “They are all either sourcing or growing themselves a raw agricultural material from the Islands. This is profound when you think about massive sectors coming together – agriculture, tourism, innovation and technology – to build an industry here for the future.
“What’s really powerful,” continues James, “is seeing these industries coming together. Agriculture is seeing a big turnover, with sugar and pineapple leaving; the tourism economy is booming more than ever; technology is getting to a level where e-commerce is leveling the playing field; and we’re really looking at innovation and entrepreneurship rising. … When we combine strong industries that have all of these pieces put together – making a strong connection to land and culture – it’s good for Hawaii. We’re creating something in Hawaii to last.”
Partner Brittany Heyd, settled on Maui two years ago with her Maui-born husband and two young children. The Mana Up challenge is the newest in a series of roles for her that have included a White House internship with Rahm Emanuel when he was President Barack Obama’s chief of staff; both a law degree and a master’s degree in public policy from Georgetown; and positions as managing director and general counsel at 1776. She remains a part-time general counsel with 1776, but now she is in Hawaii with the idea of nurturing local business on many levels.
“There is a very entrepreneurial spirit here,” says Heyd, who comes from a family of California entrepreneurs. “You have a thousand local products and all these things bring out the creativity that Hawaii people are forced to have in a lot of ways. We live on an island and if we want something new, a lot of times it has to come from within. I find that interesting and admirable.
“There’s also a very strong community here in that people want to support local. There’s a feeling that we’re all in this together, which puts entrepreneurs ahead of the game because they already have this ‘family’ to support them.”
Heyd says Mana Up will focus on companies that are already on solid footing, but want to grow.
“You have to have a specific mindset in order to want to grow,” she says. “It’s hard. There are plenty of companies that have a local market here in Hawaii and they want to stay at that size and they’re making enough money to support themselves and that’s wonderful. But there are a portion of companies that do want to grow, those that know there’s a bigger market out there and want to get help to capitalize on it. Those we want to work with.”
In order to create and maintain the momentum, Mana Up has support from other entrepreneurs as well as investors that want to build this important part of the economy, including Kamehameha Schools, Ulupono Initiative, Castle & Cooke/Dole Plantation, American Savings Bank, Innovate Hawaii and the Hawaii Technology Development Corp. As the companies grow and expand, the Mana Up’s partner institutions will have ground-floor accessibility to new growth industries that will help the state’s economic strength. Additionally, Mana Up envisions an e-commerce platform to sell each company’s products. Mana Up will buy products wholesale and sell them through the online retail platform. The financial return will also help support their efforts going forward.
“I think we’ll have a tremendous economic development impact in terms of building companies and their revenues, which obviously means more jobs.”
—Brittany Heyd, co-founder, Mana Up
Stacy Clayton, executive strategy consultant in the Kamehameha Schools’ Strategy & Innovation Division, sees the new accelerator as critically important to the state and its children. That’s a major reason the private school for Native Hawaiian children became a sponsor.
“We need to see Native Hawaiian business owners who are not just at the mom and pop level but who really add value to the larger marketplace and Hawaii,” says Clayton. “There’s a huge market out there for Native Hawaiians to be able to capitalize on. We need to see other Native Hawaiian businesses that are operating at higher levels of revenue generation.”
What’s good for Native Hawaiians, adds Clayton, is good for Hawaii. “We appreciate the sensitivity and the authenticity that Mana Up is looking at, ensuring that these products that are made in Hawaii and are tagging themselves as Hawaiian brands – that they’re proceeding in a way that’s authentic,” she says. “They’re not just capitalizing on Hawaiian values but there’s true authenticity when culture is used as part of the business branding.
“We love it when culture is elevated to a global market but it needs to be done with care and authenticity.”
Part of Mana Up’s commitment includes building that online platform to market these Hawaii products; the partners already have a warehouse for storage, packing and shipping products.
“I think we’ll have a tremendous economic development impact in terms of building companies and their revenues, which obviously means more jobs,” says Heyd. “That’s our top line metric that we’re driving for. The idea is how much revenue can we grow? We all want to make this a place to create a dream, a place where kamaaina can have amazing job opportunities. The more that we can build strong companies in Hawaii, the more opportunities and interesting jobs we can bring.”
Says James: “These companies now are at the mom and pop level, and we want to help them get to the seven-digit level – into the millions – by creating an innovative ecosystem to build the next 100 CEOs with million-dollar annual revenue companies.”
Meet the Mana Up Companies
The public will be able to sample and buy Hawaii products from the first cohort of Mana Up companies, and meet the people and companies behind those products.
The event is April 27 at 3 p.m. at a venue to be announced.
Making Pasture-Raised Cattle a Local Growth Industry
Consumers’ growing desire to know about the background, ranch and processing of the meat they eat has created a golden opportunity for Kunoa Cattle. The 3-year-old company says that desire means it can build a new industry in Hawaii that is good for shoppers, good for the local economy and good for the environment.
Kunoa is raising 2,000 head of grass-fed cattle on 4,000 acres of pastureland on Kauai and Oahu, and buying grass-fed, Island-raised cattle from other ranches. With assistance from Mana Up as part of the accelerator’s first cohort, the company expects its growth will happen faster than previously envisioned.
There are many reasons to favor grass-fed cattle, says Jack Beuttell, Kunoa co-founder and CEO, who has an MBA and a master’s degree in environmental management. “The pasture-raised animals have higher amounts of various nutrients,” he says. “In a pasture-raised system, we can use livestock to accelerate photosynthesis and soil building. Living microbes use trampled animal waste and plant matter as food, in turn building more soil.”
Founders Jack Beuttell and Bobby Farias of Kunoa Cattle Co.
Beuttell says cattle ranching has been demonized because of overgrazing and soil runoff. But the results can be the opposite with proper pasture management, such as regularly moving cattle from acreage to acreage.
“That’s exactly how 8 to 10 feet of topsoil was built on the Great Plains – because of the bison. It’s all about management. And we see this enterprise as a tool for good management, as well as a nutritious source of food and an opportunity to create local jobs.”
In nature, predators force grazing animals to be on the move constantly and Beuttell says Kunoa mimics that pattern. “We move them onto a parcel of land, and will graze the land intensively, and then let it rest before we come back to it. It depends on the stock and type of forage but it would be 10 days to 45 days (of rest) on the windward side. On the leeward side it’s much different because there’s less precipitation, more heat and different grass species as well.”
In the three years since the company was founded by Beuttell and longtime Kauai rancher and roper Bobby Farias, Kunoa has grown to employ 25 people, partially because it bought out Farias’ ranching operations as well as a meat processing facility in Kapolei. The latter was operating at just 5 percent capacity, says Beuttell, so there’s plenty of room to grow. Already the processing plant has doubled its processing to 10 percent of capacity.
“The pasture-raised animals have higher amounts of various nutrients.”
—Jack Beuttell, co-founder and CEO, Kunoa Cattle
“The facility is designed to harvest 50 head of cattle a day, as well as 200 hogs per day,” Beuttell says. “We are doing 80 cattle per month and about 75 hogs per month now.”
He says there’s enough demand to sell all of Kunoa’s output in the Islands. “But outside Hawaii there’s almost unlimited opportunity to export premium Hawaii beef and develop the Hawaii equivalent of a Kobe brand,” he said. “That has been our ambition from the start.”
The company plans to serve the Hawaii market first, and has partnered with Times Supermarkets, Don Quijote and other local stores to sell its ground beef, beef cuts and beef bars. “That’s just a reflection of our brand’s orientation, which is toward the average local customer in Hawaii. We really want to build our business around that foundation: high quality, high value products for local customers.”
Over the next decade the company will add higher margin products for export, and will begin sending to Los Angeles, San Francisco and New York.
“Asia is high on our list but we need to acquire a USDA certification for any country internationally. It’s fairly stringent, and it will be a couple of years before we do that. If I could hire a couple of people to focus on that (and all the paperwork needed) I could probably export to Japan in eight months and would love to do that.”
The company plans to expand its home ranch on Kauai. “We’ve got several thousand more acres earmarked for our expansion,” says Beuttell. “We want to max our facilities within seven to 10 years up to about 13,000 head, either raising them directly or buying them from partner producers.
“It’s not really hard to find land. There is a lot that used to be in sugar and pineapple or used by the seed companies and the state has large portfolios and so does Kamehameha Schools. There’s a lot of land out there. But part of our model is to work with the ranchers to source cattle and we’ve developed a specification for our beef and work with other partner producers that can develop according to those specs. (With that) we can scale faster, and they can increase their stocking rates.”
Kunoa now buys 40 to 60 head of cattle a month, all from Hawaii producers. “It’s 100 percent Hawaii,” he says. “That’s central to our brand.”
Mana Up will help Kunoa in several areas, including developing new products. The company already has a beef bar made from hamburger meat that is seasoned and smoked and doesn’t require refrigeration.
“We’re working on a handful of new flavor profiles for the beef bar. We’ll also launch more beef jerky in several flavor profiles in 2018. And those can ship all over the Mainland,” Beuttell says.
Kunoa’s products are already sold on Amazon and goodeggs.com, but once the Mana Up platform is up, Kunoa will also use that.
“They’re not asking for an exclusive,” says Beuttell. “Their goal is to get it into as many distribution channels as possible. In Hawaii we’re already selling (beef bars) in about 200 locations – every Safeway, Times and 7-Eleven convenience store, two Don Quijotes on Oahu and a bunch of independent stores. We’re just getting started and still figuring out the merchandising model, where it should be in the store, what the price point is, and what is best next to it. We’re still figuring out the right recipe, as it were.”
Historic “Canoe Plants” Become Modern Foods
Brynn Foster was 7 when her great-grandmother on Maui gave her a purple cookie that would change her life. The cookie was made with kalo and Brynn remembers hating it. But she ate it, watched by her pure-Hawaiian great-grandmother.
“It stayed in my memory for two reasons,” says Foster. “It was this round, buttery, purple thing, and she was very adamant about me eating it. I did, and remember feeling like it was a lot more than a cookie. It was planting a seed in me.
“One of my Hawaiian mentors now said that when you eat these cultural plants they become part of you. For me to have the symbol of eating that cookie was a way of planting something in my heart and I want to do that for my people. I feel Hawaii should own this ‘canoe plant’ flour industry.”
As the founder of Voyaging Foods, Foster has embraced the importance – both nutritionally and culturally – of canoe plants that were brought to Hawaii by the early voyagers and that thrived during ancient times and even through King Kalakaua’s reign. The company uses kalo (taro), ulu (breadfruit), uala (sweet potato) and coconut to create powders and flours that she says are highly nutritious and gluten- and grain-free.
“Starch crops are 7 out of 10 of our most imported foods,” says Foster. “We are dangerously dependent on imported food. We import more than 80 percent of our food, and starch crops are some of the most.”
She says just 300 acres of land in Hawaii are devoted to taro production and only a handful of commercial products are made from what was once a Native Hawaiian dietary staple. Foster would like to see that acreage double and is already working with half a dozen farmers on three islands to produce the 1,000 pounds she needs each month.
“We have a commercial kitchen so we do all of our own manufacturing in-house. We’re working on scaling up to a larger facility so we want to create more access and larger bags for it. We’re also selling to restaurants and bakeries.”
That’s where Mana Up comes in. As one of the 10 companies in the new startup’s first cohort, the plan is to introduce Voyaging Foods to a wider audience locally, nationally and internationally. To date, retailers handling the taro powder, ulu flour, taro pancake and cookie mixes, cookies and granola bars include Whole Foods, Foodland, Down to Earth, Neiman Marcus, Dean & DeLuca and the Four Seasons Resort Hualālai on Hawaii Island.
“Hawaii is dangerously dependent on imported food.”
—Brynn Foster, Founder, Voyaging Foods
“We’re selling it right now in the form of a starch replacement,” says Foster. “You use it to replace cornstarch, but the taro is so concentrated you only need a little bit of it.”
This year Foster hopes to create a product that’s a blend of taro, breadfruit and sweet potato to produce a gluten-free flour that is a one-to-one substitute for wheat flour. She also hopes to open a satellite kitchen on Maui in the coming year. Mana Up will advise on the best way to scale up the company.
Foster sees limitless potential for her company by adding varieties of taro to her products and working with local farmers to expand the acreage cultivated. It means more jobs and a more robust agricultural economy.
“There are around 80 different Hawaiian varieties of taro and we’re only using one right now. If we’re just eating one variety it’s like having just one kind of tomato. We’re limiting ourselves in terms of taste too. Everyone needs to know about the yellow taro and the pink taro and try them. They’re so good!”
Brynn Foster of Voyaging Foods at a partner farm, Kahumana Farm in Waianae.
The current phase of her journey began a dozen years ago with the birth of her first child, and the desire to feed him poi and other Native Hawaiian foods. But when he stopped teething and wanted something that could be chewed, there were no products available. Foster had a part-time recurring role in the first season of “Hawaii Five-0,” and has modeled and appeared on other TV shows shot here; she used paychecks from those jobs to begin purchasing taro and the equipment to turn it into powders and flour. One paycheck bought 1,000 pounds of taro from a Hawaii Island farmer, and the first crunchy product she made from poi was dried in her own oven.
“I started to dry the poi in my oven and it took hours and hours and hours. Finally I got it to a state that removed the water. It was crunchy and I was able to blend it into a flour to make a cookie for my son.” When her mother started taking the cookies because they were so tasty, Foster realized there might be more to her experiment than simply making a healthy and nutritious food for her child.
“It dawned on me that this is something more than just good for our bodies, but good for our communities,” she says.
To put her money where her mouth is, she and her husband, Hugh Foster, moved the family from Kāhala to a 7-acre organic farm in Waialua on Oahu’s North Shore and began to grow canoe plants. They hope that by developing as many varieties as they can, they’ll have a seed farm for the future. They also hold workshops to explain how to plant, grow, cook and use the plants in a variety of ways. Foster also wants to create a closed system, something she calls “regenerative agriculture,” where no outside fertilizers are needed, but rather waste products from the growth cycle are used instead. It would revitalize fallow land that once grew sugar and pineapple.
“My goal is to be like another seed bank for these other Native Hawaiian varieties of canoe plants. I want to get all of the 80 varieties (of taro) and keep them happy.”
Rum From Hawaii’s Past
When sugar cane left the Islands for places with cheaper labor, it left empty land. It also left behind stories and legends from the early days, as well as original sugar cane strains brought to Hawaii aboard voyaging canoes.
That legacy dating back 1,000 years inspired Kō Hana Hawaiian Agricole Rum, one of a handful of rums in the world made from fresh pressed sugar cane juice rather than molasses.
Now 6 years old, Ko Hana Rum is sold in high-end restaurants, bars and specialty stores throughout Hawaii, and is ready to launch into bigger things. That’s where Mana Up comes in.
“All the restaurants around town will usually have Kō Hana Rum in one of their name cocktails,” says Jason Brand, who with Robert Dawson founded Manulele Distillers, which makes Kō Hana. “This is a mixologist’s dream. It’s very aromatic and flavorful. So you’re trying to accent the rum as opposed to disguise it, letting the rum speak for itself.”
The founders began as farmers, and still grow lettuce, but were entranced by stories of how the early Hawaiians used sugar cane in medicine, tattoos, as a hedge against drought, as wallpaper, even in hairstyling.
Jason Brand of Manulele Distillers cuts sugar cane.
“Most people think of sugar cane in the Caribbean, and they got it around 1500 with Columbus’ second voyage,” says Brand. “But Hawaii had sugar cane about 1,000 years ago. Sugar cane was on the first canoes.”
By the 1800s, however, with the growth of Hawaii’s sugar plantations, the early native varieties gave way to others that were less fat, less juicy and grew straighter. “Most of the Hawaiian canes got lost to history to make way for the sugar cane used in Louisiana (to process into white sugar),” says Brand. “We worked with the Hawaii Agricultural Research Center and Dr. Noa Lincoln and they knew everything about sugar cane and the ethnobotany of Hawaiian plants.”
Over the past six years, Brand and Dawson have grown all of the Hawaiian cane varieties, and use them in combination or singly in their rums.
“We worked to collect and genetically test the old varieties of Hawaiian sugar cane and we found 34 varieties,” says Brand. “We juice these canes and then turn that juice into a high-end rum as opposed to converting molasses into it. It’s a sipping rum. We have about 11 flavors and offer five different rums. Sometimes we’ll mix and combine and blend flavors to create a new taste.”
The rums currently include a white rum, a barrel select product, a connoisseurs’ rum right from the barrel, and a chocolate/honey rum with local cacao and honey. “If you like after-dinner drinks or dobash cake, this is the one,” says Brand of the latter.
“Most of the Hawaiian canes got lost to history.”
—Jason Brand, Co-founder, Manulele Distillers
While the partners are newly focused on their growing rum business, they want to do so in an environmentally sustainable way and help Hawaii become food independent. They say their farming techniques use aquaponics and require neither power nor soil.
The partners farm on 30 acres of old Del Monte sugar land in Kunia, and use the original Del Monte General Store for their tasting room, which is the only one on Oahu. “We’re not just revitalizing the story of the sugar cane, but we’re bringing back a rural community as well,” says Brand. “When we took over the Del Monte General Store it was 10 years abandoned.”
The plantation camp, with 140 homes and 600 residents, is where many of the company’s workers live, and the company employs 22 people from the village.
The distilling process takes fresh pressed juice through fermentation to distillation. Fermentation converts the sugar to alcohol and carbon dioxide and then the alcohol is distilled by “running it through our specially designed craft distiller to convert it into high-proof alcohol.” The white rum is 80 proof, the aged rum 90 proof, the connoisseurs rum 130 proof and the chocolate/honey rum 60 proof.
The partners have yet to reach $1 million in annual revenue, but with help from Mana Up, they see their business growing as much as fiftyfold. “We can probably grow 10 times our size just in Hawaii,” says Brand. “But we’re looking for help to grow with our Hawaii visitors and then we’d like to take it to the Mainland and internationally. Hawaii has very few opportunities to have a product that is best in class, and this is one of them. It’s among the world’s best Agricole rums.”
Here are the companies in Mana Up’s first cohort and their CEOs or founders:
Hawaiian Pie Co. LLC
Hawaiian Rainbow Bees
Hawaiian Vanilla Co.
Kunoa Cattle Co.
Manulele Distillers LLC
The Tea Chest
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