Operations Report: Green Mountain Coffee Roasters' Business Strategies

This report provides an in-depth analysis of Green Mountain Coffee Roasters (GMCR), examining their business operations, sustainability initiatives, and competitive strategies within the coffee industry. The essay details GMCR's efforts to maintain sustainable practices, including the incorporation of Vue technology and their focus on single-cup coffee production. It explores how GMCR achieved high profitability through the sale of single-cup coffee and addresses the competitive challenges posed by Starbucks' entry into the single-cup market. The report covers GMCR's collaborations, product developments, and marketing strategies, highlighting their expansion into various markets and their commitment to fair trade and environmental protection. The analysis also focuses on the impact of K-cups, GMCR's response to environmental concerns, and their strategic responses to patent expirations and competition, including licensing agreements with major brands. Overall, the report provides a comprehensive overview of GMCR's business practices and their evolution in a competitive market.

Running Head: OPERATIONS 1
Operations
Name:
Green Mountain Coffee Roasters

OPERATIONS 2
Abstract
This essay offers details about the Green Mountain Coffee Roasters attempts to maintain
the sustainable business practices by incorporating the Vue technology in manufacture of their
brewing systems. It also provides and analysis of how the GMCR maintained high profitability
by supplying single-cup coffee. Finally, it addresses the issue of Green Mountain’s Coffee
Roasters main competitor Starbucks which announced that they would also start selling single-
cup coffee machines.
Q1.
In two thousand and two, GMCR introduced sales of the Newman’s Own Organics coffee
inform of k-cups. This advance gave GMCR access to the Sam’s club, Costco and BJ’s. The
collaboration with Newman’s Own Organics gave GMCR a chance to make Fair Trade Certified
organic coffee accessible to all consumers. This made the green mountain the leader in the
organic coffee market and consequently Newman’s Own Organic made it to the top of the list as
one of the largest and fast-growing national brand for coffee in the united states. In the years
2007, GMCR gained access to the Midwestern market by signing an agreement that licensed
them to sell Caribou Coffee. In the years 2009, green mountain was able to obtain the Tully’s
Coffee, a brand and a wholesale business which was well respected and operated in the
Northwest of the Pacific. Also in the same year, Green Mountain was able to obtain the brand
Timothy’s World Coffee which was positioned in Toronto, Canada. This acquisition
incorporated the Timothy’s World Coffee, Kahlua Original brands and Emeril’s. This step
opened the company’s door into the international market. Green Mountain using its new products
development and marketing strategies, expanded nationally their college, supermarket and
university food service accounts. At the end of this years, 2009, Green Mountain has acquired
eight thousand five hundred supermarkets, two hundred and forty colleges and also university
accounts. The Gombe Reserve coffee found in Tanzania owned by GMCR was the one branded
first with the Goodall’s seal that implied, GMCR did not only advocate for better pay for all
coffee farmers but it was also dedicated to protecting the environment and the wildlife in the
planet as a whole. This is because, the Gombe national park is next to where Coffee is grown in
Tanzania and hence farmers have to live together with the chimpanzees. Therefore, GMCR’s
outreach program give the farmers the incentive to protect the forest while having a stable

OPERATIONS 3
economy (Tian, Freeman, Corey, German & Barile, 2018). By so doing, Green Mountain gains
access to the best region that can allow Quality-Arabic coffee to be grown. All these
collaborations lead to the success of GMCR and hence increased profits (Wasserman & Trosten-
Bloom, 2017).
Q2.
Green Mountain Coffee introduced the standard brewing method for Keurig Single-cup.
This is done by putting coffee and sealing it in plastic in a way that it is possible to burst out
neatly into a coffee marker for single-serve. These packages are petroleum based and are also
disposable. Twenty-seven percent of the coffee that is currently being shipped by Green
Mountain Coffee is fair trade certified and the figure is on the rise. GMC joined with Newman’s
Own Organics to so as to broaden the market for fair trade coffee. GMC claims that putting the
fair trade coffee in the K-cups, is a way to popularize the fair trade coffee and also help
communities that grow coffee. Other products from Green Mountain Coffee are packaged in
bags that are made from PLA, which is a corn-based bioplastic (Anthony, Riley & Keith-Lucas,
2018). This step led to the company cutting their solid waste by nineteen percent when they
composted the organic waste from their production procedures. GMC collaborates with
nonprofits organizations like Heifer International to provide grants that aid in poverty reduction.
K-cups used by GMC are made from plastic based on petroleum, combined with a coating of
polyethylene, an inside filter paper and topped with aluminum. This package maintains the
freshness of the coffee but in the process makes it difficult to reuse (Grabs & Ponte, 2019). GMC
reports that two and a half million cups are brewed every day and the formed around half of their
net sales last year. This means that the K-cups contribute greatly towards the success of GMC.
When it comes to sustainability of GMC products, the company identifies that they already
recognize the K-cups as their major challenge when it comes to environmental challenges. They
have therefore put in place a lifecycle analyst to help them compare drip brew to the K-cups. It is
highly unlikely for GMC to eliminate the use of K-cups since they have been associated with
half of their net sales (Caplan, Dutta & Marcinko, 2017).
Q3
Business practices that are viable economically, responsible socially and environmental
friendly can be termed as sustainable. Organizations achieve sustainable economic values by

OPERATIONS 4
employing environmental friendly policies incorporated with social responsible policies (Ortiz‐
de‐Mandojana & Bansal, 2016). The management of Green Mountain has involved many actions
in their packaging, design and use of energy in an attempt to eliminate the effect of Keurig
brewing system. The steps taken include introduction of nested packaging for the K-cup packs.
This step was intended to reduce the supply related to gas emissions from greenhouses by more
than twenty percent and also reduce the packing volume by thirty percent. They also established
two new plans in their Away From Home channel in an attempt to divert the K-cups from
landfills. In 2010 they a reusable filter assembly for the K-cups which could be refilled by
consumers. GMCR encompassed recycling codes in their brewer so as to ensure liable dumping
of all decomposable components of the domestic brewing system as well as make sure there is
agreement with the RoHS Directive, a convention of European principles developed to minimize
the consequence of electrical apparatus on disposal stream. Finally, they provided a considerable
energy saving strategy that uses Automatic turn off features for its domestic systems for brewing.
However, Green Mountain ca maintain its position in sustainable business practices despite the
fact that the K-cups are being attributed to many adverse effects. In anticipation for the patent
expiration of Green Mountain Coffee Roasters (GMCR) and Keurig brewer in 2012, GMCR
introduced new products and to reinforce that they pursued a license for the K-cup technology.
Licensing agreements were also established with Caribou, Dunkin’ Donuts, Folgers and
Starbucks (Albanese, 2015). However, the stock price for Green Mountain Coffee Roasters went
down by sixteen percent after Starbucks decided to sell their personal single-cup coffee
apparatuses.
Q4
From the 2008 GMCR’s corporate social responsibility report, indicated that their main
concern was focused on the challenge that was associated with the impact on environment that
their coffee wrapping material and preparation system was having. This issue was addressed by
launching a lifecycle analysis team that helped asses, comprehend and match single-cup brewing
versus the drip brewing. In 2009, the CRS report showed the results of the life cycle analysis.
This report indicated that the disposal of K-cups was only comprising of a small percentage of
the total environmental impacts that the GMCR products have on the environment. The most
significant environmental impacts of GMCR can be attributed to farming of coffee beans, how

OPERATIONS 5
they use the brewing systems as well as the material used to pack their products. One major area
of concern was the material used to manufacture the package for the K-cup pack which was
difficult to recycle. The k-Cup was composed of three major components which include; an
aluminum foil, a filter and the cup itself. All these components were necessary in order to
maintain the freshness of the coffee by preventing oxygen, moisture and light from degrading in
the coffee. So as to eliminate the ecological effect of these K-cups, GMCR launched new
environmental friendly brewers which were manufactured by the Vue brand. The kind of plastic
used by Vue is recyclable anywhere number five plastic or polypropylene plastic is acceptable.
The Vue system for brewing was considered as a major step towards eliminating the
environmental impact GMCR products was having. Taking this measure shows that Green
Mountain is attempting to address the issue of environmental impact (Hicks, 2018).
Q5
As mentioned earlier, Green Mountain Coffee Roasters introduced some new products in
the market and also obtained licenses for their K-Cup technology in readiness for the patent
expiration. Green Mountain Coffee Roasters also made licensing agreements with Caribou,
Folgers, Dunkin’ Donuts and Starbucks. The step that Starbucks took to start selling single-cup
coffee machines, was believed to reduce the demand Green Mountain’s Keurig machines
(Mason, Cole & Goza, 2017). In fact, the stock prices for Green Mountain Coffee Roasters went
down by sixteen percent when Starbucks announced their new plan while Starbucks shares went
up by three percent. Incorporation of Vue products, would help the Green Mountain Coffee
Roasters walk towards sustainable business practices. This was attributed to the fact that the Vue
technology used plastic that was disposable and hence meeting the environmental friendly
responsibility that is associated with sustainable business practices. By taking all these measures,
Green Market Coffee Roasters are able to continue distinguishing themselves from others by
their non-stop efforts towards maintaining sustainable business practices. This practices can also
be attributed to future profits and increase in the stock price despite their competitors making
aggressive attempts to pin down Green Mountain Coffee Roasters (Wasserman & Trosten-
Bloom, 2017).

OPERATIONS 6
References
Albanese, A. E. (2015). U.S. Patent No. 9,179,798. Washington, DC: U.S. Patent and Trademark
Office.
Anthony, J., Riley, J., & Keith-Lucas, D. (2018). U.S. Patent No. 10,028,615. Washington, DC:
U.S. Patent and Trademark Office.
Caplan, D. H., Dutta, S. K., & Marcinko, D. J. (2017). Tempest in a K-Cup: Red Flags on Green
Mountain. Issues in Accounting Education Teaching Notes, 32(1), 57-72.
Grabs, J., & Ponte, S. (2019). The evolution of power in the global coffee value chain and
production network. Journal of Economic Geography.
Hicks, A. L. (2018). Environmental Implications of consumer convenience: coffee as a case
study. Journal of Industrial Ecology, 22(1), 79-91.
Mason, A., Cole, T., & Goza, N. (2017). STARBUCKS: A CASE STUDY OF EFFECTIVE
MANAGEMENT IN THE COFFEE INDUSTRY. Journal of International Management
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Ortiz‐de‐Mandojana, N., & Bansal, P. (2016). The long‐term benefits of organizational resilience
through sustainable business practices. Strategic Management Journal, 37(8), 1615-1631.
Tian, T., Freeman, S., Corey, M., German, J. B., & Barile, D. (2018). Effect of Roasting on
Oligosaccharide Abundance in Arabica Coffee Beans. Journal of agricultural and food
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Wasserman, I., & Trosten-Bloom, A. (2017). Enhancing Profitability Through Business Process
Excellence: The Green Mountain Coffee Roaster's Story. AI Practitioner, 19(2).