Thursday, April 30, 2009

Green Mountain Coffee Winner In Keurig Deal With Wal Mart!

Green Mountain Coffee Gains On Keurig Deal With Wal-Mart
Green Mountain Gains on Keurig Deal With Wal-Mart

By Courtney Dentch

April 30 (Bloomberg) -- Green Mountain Coffee Roasters Inc. had a record gain in Nasdaq trading after announcing Wal-Mart Stores Inc. will carry its Keurig single-cup coffee makers.

Green Mountain climbed $19.58, or 37 percent, to $72.31 at 4 p.m. New York time on the Nasdaq Stock Market, the biggest rise since the company began trading in September 1993. The stock has gained 87 percent this year.

Wal-Mart, the world’s largest retailer, will carry the discount Keurig coffee makers and the individual servings of coffee grounds in more than 3,000 U.S. stores, making Green Mountain’s machine the only such coffeemaker on its shelves, the companies said yesterday after U.S. markets closed. The deal could add 62 cents a share in royalty payments this year, wrote Mitchell Pinheiro, an analyst with Janney Montgomery Scott LLC in Philadelphia.

“Wal-Mart’s presence in discount K-Cup sales will likely be the catalyst that catches the attention of the major grocery chains,” Pinheiro wrote in a note to investors today. He recommends buying Green Mountain stock.

The Waterbury, Vermont-based company also posted second- quarter net income and sales that topped analysts’ estimates. Profit more than doubled to $13 million, or 50 cents a share, from a year earlier, the company said yesterday. Sales rose 60 percent to $193.4 million.

The average of five analysts’ estimates compiled by Bloomberg was for profit of 35 cents on sales of $181.3 million.

To contact the reporter on this story: Courtney Dentch in New York at cdentch1@bloomberg.net.

Monday, April 27, 2009

Green Mountain Coffee Roasters Competitive In Stock Market

Green Mountain Coffee Roasters is growing right along side the fastest growing portion of the of the coffee industry, the high-end specialty coffee market. Green Mountain Coffee is a product leader in this category, they emphasize quality and enjoyment of their product. Green Mountain's target market is no question wholesaler's.

Green Mountain Coffee has over 5,000 wholesale accounts that currently account for 94% of their revenue. In this marketing plan I thoroughly go through who their wholesale customers are, the relationships they have with them, and how they plan to use them in their overall strategy to obtain more customers in different market segments. Also in this report, I discuss the competitiveness of the industry Green Mountain is in, as well as the opportunities, threats and other outside influences that can have a positive or negative effect on the company.

In general this report is an overview of the company that is Green Mountain Coffee Roasters, their industry, target markets, environmental influence's, competition, and most importantly their strategy, along with my critique.

Green Mountain Coffee Roasters began in 1981 as a small café in rural Vermont. Today the company boasts a 90,000 square feet, state-of-the-art distribution & roasting facility in Waterbury, Vermont, where the company is based. Green Mountain Coffee Roasters has a strong regional presence in the Northeast and is gaining Market share in other parts of the country. It has an extensive wholesale operation as well as a direct mail and Internet businesses.

Green Mountain Coffee, Inc. is a leader in the specialty coffee industry. The company roasts 60 varieties of high quality Arabica coffees including single-origin, estate, certified organic proprietary blends and flavored coffee's that it sells all under the Green Mountain Coffee Roasters name brand. The majority of their revenue comes from their aforementioned wholesale operation, which services restaurant, supermarket, specialty food store, convenience store, food service, hotel room hospitality, university, airline, train and coffee office service customers.

The company went public in 1993 and is listed on the NASDAQ National Market under the symbol GMCR; for the Fiscal year ended September 25th, 1999, net sales increased 16.2% to a record $64,881,000.

The coffee industry has shifted towards specialty coffees such as Green Mountain's in the recent years, and The Company competes against all sellers of specialty coffee. These specialty coffees are higher priced then normal coffees; the increased demand for them has been driven by consumer education, a wider availability of high quality coffee such as Green Mountain's, and an emergence of up scale coffee shops throughout the country.

According to the National Coffee Association of USA, Inc. four out of five American consumers consider themselves coffee drinkers; on average an estimated 400 million cups of coffee are consumed in the US each day. Next to oil, coffee is the highest traded commodity in the world. Specialty coffees are becoming increasingly popular in the US, and the fastest growing segment of the coffee market. Green Mountain Coffee has become an established and premier brand in the specialty coffee market. This market is highly competitive, and because of the high growth of this segment, large companies have entered the market.

Proctor & Gamble distributes Millstone into supermarkets, which is a direct substitute for Green Mountain Coffee; Starbucks recently signed a distribution agreement with Phillip Morris/ Kraft foods that will enable Starbucks to place its Coffee in supermarkets as well. Starbucks has also been growing in its wholesale operations, and hopes to leverage its brand name that is continually growing due its popular neighborhood coffee houses and trendy style.

In the office coffee, convenience store and service arena, General Food's, Proctor & Gamble, and Sara Lee are direct competitors. In the direct sales area of the market, which accounted for 6% of Green Mountain's revenue in 1998, their major competitor is a division of General Foods, Gevalia. As you can see there are a lot of large multinational corporations in the market that have resources available to them that Green Mountain does not have. Starbucks is the only other major independent producer of high-end coffees.

As this new market expands and smaller companies strive to build brand awareness and larger companies attempt to earn larger market shares and build brand equity, competition will only intensify.

Let's look at major Social and Economic factors that are influencing Green Mountain Coffee and whether or not these factors can be looked at as opportunity or a threat to Green Mountain.

Major social trends include a movement toward more natural and healthy products, as well as lifestyles. This trend can only help Green Mountain. With its Organic line of five different coffee flavors having been introduced on Earth Day, 1998 and available along side all its normal line, Green Mountain is aggressively pursuing this new market.

Another social trend is that of America becoming more concerned with the environment. Green Mountain works closely with Conservation International, and the Rainforest Alliance. In 1998 the company was invited to present a Environmental case study at the Future 500 annual conference on its biodegradable coffee bag that it developed in partnership with 3M corporation. The Company has also sponsored a Yale research project to find more environmental and labor healthy ways of producing Coffee. The study perpetuates Green Mountain's continuing efforts to develop long-term relationships with its coffee-producing partners. It also continues Green Mountains overall support for positive environmental and social initiatives, such as their Stewardship line of coffee that come only from farms that exhibit extraordinary care of their land and their employees.

The environment is an issue that Green Mountain takes very seriously and its many different environmental projects can only strengthen the company in the mind of the consumer.

The extraordinary economic situation that is currently happening in America and aroung the world has given rise to financial concern for all Americans. Green Mountain Coffee is a high-end product that is pricier than normal coffee's on the market. The overall economic prosperity of the country gives consumers less disposable income and a lower propensity to buy higher priced consumer goods such as Green Mountains.

The extraordinary growth of e-commerce has in most cases forced companies to either develop an effective e-commerce solution. This new use of technology can be looked upon certainly as an opportunity or a threat depending on the success of Green Mountain in this area. They recently opened a web site that offers a variety of information on the company and secure online purchasing of Green Mountains products. Initial reactions have been positive, as they have been proven to be an effective channel for new direct-mail customers. This new area of commerce is looking more like an effective medium to sell and provide information to consumers than a possible threat.

Green Mountain uses a combination of outside brokers and And direct relationships with estates for its supply of green coffees, with outside brokers providing the majority. The price of coffee is subject to high volatility. The company generally passes coffee price increases or decreases on to the customer, which means if the price of green the green coffee bean increases, or world supply of the green coffee bean decreases, the price is raised and sales could diminish.

Green Mountain publishes catalogs that offer their complete product line as well as coffee-related gifts and accessories. Much of their revenue is generated by the Green Mountain Coffee Club. This is a program that has customized standing orders for re-shipment of their coffee in beans, ground or K-Cups.

As the secure on line purchasing that Green Mountain Coffee's new web site offers begins to grow, direct mail should start to contribute more to total sales, as e commerce offers any-time, user friendly access to purchasing Green Mountain Coffee products.

The presence of Green Mountain Coffee crosses over many different distribution channels and customer categories in its primary geographic market, the northeastern United States. What this does for Green Mountain is provide widespread brand exposure in a variety of settings, ease of access to Green Mountain's products, and many opportunities to sample their products. Throughout the day a consumer can consume the product: at home in the morning, at the office, at a restaurant for lunch, on an airplane or train to a destination, at convenience stores or a supermarket, and even at a movie theater.

Green Mountain believes that it's coffee's convenient availability throughout the day for consumer trial is a significant competitive advantage and a key component of their strategy. Consumers who sample their coffee by the cup are likely to develop a taste for Green Mountain Coffee and seek it out through other available distribution channels. Company studies have shown that consumer trial at one level of distribution will lead to subsequent purchases in another area of distribution. As brand awareness increases through trial by consumers of Green Mountain's coffee by the cup, demand for whole bean sales of Green Mountain's coffee for home consumption will also increase.

As Green Mountain's brand equity is built, they believe wholesale expansion will typically continue through customers such as supermarkets, convenience stores and specialty food stores, who in turn sell Green Mountains whole bean to customers. Green Mountain sees this expansion process as capitalizing on the cup/whole bean inter-relationship. This relationship is designed to increase Green Mountain's geographic share in already strong areas, increase sales density in those areas and according to Robert Stiller, CEO: drive operational and brand-equity efficiencies.

By principally leveraging the companies strong wholesale distribution channel, Green Mountain wants to introduce its products in selected markets across the US and internationally. Green Mountains target market is still going to be wholesalers, and for them to grow an integral part of their growth strategy will be increasing sales to retailers who sell whole bean coffee.

Green Mountain Coffee Roasters purchased Keurig the company that makes single cup coffee makers for which Green Mountain is responsible for the packaging of the K-Cup Coffees that are used in the Keurig coffee makers.

They will try to identify new customers such as chain and franchise convenient stores and office coffee services, i.e. the same type of wholesalers they have now, and use these customers for not only additional revenue, but enhance the consumer trial of their product. Green Mountain feels that their core competency is the extremely high quality and convenience of their product. This is something Green Mountain believes the customer can recognize, and that Green Mountain has been and will continue to market in the future.

There is no doubt that Green Mountain is a product leadership type of company. It seems they really pride themselves on the product they produce as being the best in the industry. They project this in their ideas about their wholesale customers.

They seem to be hyper-focused on something that they are very good at; developing relationships with wholesale customers. Green Mountain sees their relationships with these customers as their avenue into other markets, which I think is a positive strategy. With the limited business knowledge that I have, I was very impressed with Green Mountain Coffee and this strategy. They seem to be hyper-focused on something that they are very good at; developing relationships with wholesale customers and then using these relationships to enter gain brand awareness, as well as brand equity.

Green Mountain Coffee makes an excellent cup of coffee, whether using K-Cups Coffee and a Keurig Brewer or ground coffee in your favorite coffee maker.

Thursday, April 23, 2009

Green Mountain Coffee Roaster Winners Of Climate Change Proposals


In honor of Earth Day, Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) today announced the winners of its challenge to find potential solutions to climate change. The contest site on JustMeans.com received more than one million page hits, over 100,000 unique visitors, and created an online social network of nearly 30,000 stakeholders interested in "Changing Climate Change."

More than 100 nonprofit organizations from around the world submitted proposals to address climate change in four specific areas: threats to coffee-growing communities, transportation-related emissions, building political will, and empowering individual action. GMCR has named four nonprofit organizations that will each receive a $200,000 grant, payable over five years.

Threats to coffee-growing communities: The International Center for Tropical Agriculture (CIAT) and Catholic Relief Services (CRS) will use the grant to map forecasts of the impacts of climate change in coffee-growing communities and help smallholder coffee farmers identify, evaluate and implement adaptation strategies.

Transportation-related emissions: New England Transportation Institute, in partnership with the University of Vermont Transportation Research Center, will conduct an in-depth analysis of transportation patterns in the rural Northeast to help inform policy-makers on the likely adoption and ultimate effect of different transportation strategies on greenhouse gas emissions levels.

Building political will: Ceres will mobilize its business and investor partners to make the economic case for bold U.S. climate and energy legislation in 2009. These leaders will take their message to legislators and the media.

Empowering individual action: The National Parks Conservation Association will encourage and empower national park visitors to "Do Your Part" to reduce greenhouse gas emissions. Outreach will include dozens of national parks and their local communities, the web, and hundreds of schools.

The grants are part of Changing Climate Change, GMCR's company-wide initiative that also includes operational initiatives, employee incentives to reduce carbon emissions, and the purchase of carbon offsets.

"Working to protect the environment is one of our core company values," says Michael Dupee, Vice President of Corporate Social Responsibility for Green Mountain Coffee Roasters, Inc. "Long-term solutions to climate change will come from the combined efforts of all of us-nonprofits, for-profits, the government, and individuals. We're very excited by the potential these organizations and projects have to create positive change on this issue globally, as well as in our own operations."

Details of the winning proposals can be found on GMCR's web site at www.BrewingABetterWorld.com

About Green Mountain Coffee Roasters, Inc. (GMCR)
As a leader in the specialty coffee industry, Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) is recognized for its award-winning coffees, innovative brewing technology, and socially responsible business practices. GMCR's operations are managed through two business units. The Specialty Coffee business unit produces coffee, tea and hot cocoa from its family of brands, including Tully's Coffee(R), Green Mountain Coffee(R) and Newman's Own(R) Organics coffee. The Keurig business unit is a pioneer and leading manufacturer of gourmet single-cup brewing systems. K-Cup(R) portion packs for Keurig(R) Single-Cup Brewers are produced by a variety of licensed roasters, including Green Mountain Coffee and Tully's Coffee. GMCR supports local and global communities by offsetting 100% of its direct greenhouse gas emissions, investing in Fair Trade Certified(TM) coffee, and donating at least five percent of its pre-tax profits to social and environmental projects. Visit www.GreenMountainCoffee.com and www.Keurig.com for more information.

For more information please contact:

Sandy Yusen, Director of Public Relations
Green Mountain Coffee
866-968-2739
www.GreenMountainCoffee.com

Monday, April 20, 2009

Green Mountain Coffee Responsible Energy Use; Going Solar!

Green Mountain Coffee Environmental Consciousnes
Green Mountain Coffee Environmentally Conscious

Waste reduction and responsible energy use have been two of Green Mountain Coffee Roasters top priorities from the beginning

Green Mountain Coffee Roasters is hoping to cut its electric bill with a major solar power installation set for spring.

The Green Mountain Coffee company plans to put 530 solar panels on top of its distribution center in a partnership with Green Mountain Power Corp., and groSolar.

Green Mountain Coffee Roasters' goal is to provide you with an extraordinary coffee experience that’s also environmentally sound, socially just, and completely sustainable. Each day, they take steps along that path.

Sunday, April 19, 2009

Beverage Industry Features Green Mountain Coffee Roasters


Green Mountain Coffee Roasters is featured in this month’s Beverage Industry magazine.

Michelle Stacy, President of Keurig Inc., Scott McCreary, Green Mountain Coffee Chief Operating Officer, and Larry Blanford, Green Mountain Coffee Roasters’ President and Chief Executive Officer are featured on the front cover while posing behind the counter at GMCR’s Visitor’s Center.

Beverage Industry focuses on trends, technology and products that shape the marketplace, discusses everything from Green Mountain's multi-channel strategy to brewing delicious Green Mountain Coffee.

This 10 page article is a great presentation of Green Mountain Coffee company’s growth and business strategy.

To read the complete Green Mountain Coffee story, go to Beverage Industry.

Friday, April 17, 2009

K-Cups Coffee Discount From Green Mountain Coffee Club

Green Mountain Coffee Club Discount K Cups

Green Mountain Coffee Club Saves You $2 On Every Box Of K-Cups!

Green Mountain Coffee Club Offers The Best Price For K-Cups Plus Free Shipping And An Offer For 48 Free K-Cups!

You Choose Which Coffees, How Much & How Often For Your Green Mountain Coffee Delivery.
Green Mountain Coffee Cafe Express Coffee Club Discount K-Cups
Café EXPRESS is Green Mountain Coffee's automatic delivery gourmet coffee club that rewards you with discounts, free gifts, and special perks and privileges that only Café EXPRESS membership brings.

There's no cost to join, no fees, and you never get unwanted shipments that you didn't order.

Green Mountain Coffee Club Cafe Express Benefits:

+ SPECIAL MEMBER'S DISCOUNTS:
$2 off every box of K-Cups & 10% off all other items
+ FREE Coffee Club GIFTS:
Choose from 2 boxes of K-Cups, 3 bags of coffees, or other great gifts -- just
for signing up! You can look forward to more FREE gifts and coffee samples
throughout the year.
+ FLEXIBLE, AUTOMATIC DELIVERY:
Choose every 1 to 12 weeks, based on your needs. You can change your order as
often as you like!
+ SPECIAL Cafe Express Coffee Club MEMBER PROMOTIONS
+ FREE Earth-Friendly filters for ground coffee

Save $2 on every box of K-Cups AND get 10% DISCOUNT on everything else that you buy from Green Mountain Coffee Roasters!


JOIN Green Mountain Coffee Club For Your Discount K-Cups!

Green Mountain Coffee Completes Tully's Coffee Acquisition

WATERBURY, Vt. (AP) -- Green Mountain Coffee Roasters Inc. said Monday that it completed its acquisition of the Tully's Coffee brand and wholesale coffee business from Tully's Coffee Corp. for $40.3 million.

The deal, originally announced in September, was completed after receiving shareholder approval and satisfaction of closing conditions. It was financed through Green Mountain's existing $225 million senior revolving credit facility.

Company officials said the addition of the Seattle-based Tully's brand will expand Green Mountain's presence on the West Coast.

Tully's retail locations will continue to operate under license and supply agreements with Green Mountain. The retail and international business will remain an independent company.

Green Mountain said it still expects the deal to have an either neutral or slightly positive effect on its earnings for the first year, and then boost earnings after that.

Wednesday, April 1, 2009

Green Mountain Coffee Roasters Increasing Tully's Coffee Wholesale Business

Green Mountain Coffee
Green Mountain looks for bigger space to roast coffee after Tully's deal Green Mountain Coffee Roasters is shopping for a bigger space for three roasting machines and about 85 employees who work at Tully's Coffee's wholesale business, which Green Mountain acquired Friday for $40.3 million.

By Melissa Allison

Seattle Times business reporter

Tully's CoffeeTully's founder and Chairman Tom O'Keefe speaks about how the company has sold its wholesale business to Green Mountain Coffee Roasters of Vermont.
Related

Archive | Tully's hopes to expand with licensed stores
Green Mountain Coffee Roasters is shopping for a bigger space for three roasting machines and about 85 employees who work at Tully's Coffee's wholesale business, which Green Mountain acquired Friday for $40.3 million.

The Vermont roaster wants to expand here and needs at least 120,000 square feet to roast Tully's, Green Mountain and Newman's Own brand coffees for distribution in the Western U.S., Green Mountain executives said at a press conference this morning.

The current Tully's building, which is more than a century old and sits next to I-5 south of downtown Seattle with a green neon "T" perched atop it, has about 80,000 square feet.

"It's a great, historic location. It's just not conducive to supporting the growth we need," Green Mountain CEO Larry Blanford said in an interview. He expects to complete the move by this fall.

Tully's remaining 45 employees will stay in the current building, overseeing its 165 retail stores and a fledgling international business, which in partnership with another company opened two stores in Singapore last year.

Tully's Chairman Tom O'Keefe reiterated the chain's plans to open 200 more shops in grocery stores and other locations during the next 12 to 18 months.

Green Mountain will begin roasting Tully's coffee at its two other facilities in Vermont and Tennessee, expanding the Seattle brand's reach east of its current distribution, which stops at grocery stores in Chicago.

The Vermont company, which unlike many roasters does not have its own chain of retail stores, also plans to expand distribution of the Green Mountain and Newman's Own coffee brands in the Western U.S.

It has a lighter roast profile than Tully's and currently distributes a co-branded Green Mountain/Newman's Own coffee to 650 McDonald's stores in the Northeast.

Green Mountain is looking at spaces between south Seattle and Olympia that would allow it to expand to 200,000 square feet over the next few years. It also expects to hire 40 to 80 more employees in that time, Chief Operating Officer Scott McCreary said during the press conference.

Green Mountain has been one of the best performing companies in the coffee industry and on Wall Street during the economic downturn. It had sales of $500 million last year, and its stock hit a new 52-week trading high of $50.49 last week.

O'Keefe said that Tully's has not decided how much of the $40.3 million it received from the sale will be distributed to shareholders. About $26 million went to repay Tully's debt, and another undisclosed amount will help rejuvenate and expand its retail business.