How Green Mountain Coffee Roasters Gets Greener Profitably

Not long ago, consumers easily could equate the coffee from Green Mountain Coffee Roasters to that sold at most gas stations and other “rust coffee”-like locales. Although plenty of gas stations still sell Green Mountain coffee, from an image standpoint those days are long gone. The manufacturer, distributor, cataloger and online marketer has taken extensive steps over the past few years to upgrade not only its coffee, but also its image.

Green Mountain broke through three years ago by acquiring the remaining 65 percent of single-cup coffeemaker manufacturer Keurig, which both created and killed a new category in one fell swoop for the now 11-year-old unique product. While cutting deals with other coffeemakers to provide single-serving K-Cups for the machines, Green Mountain struck licensing deals with the likes of McDonald’s and Newman’s Own.

It all added up to that rarest of rare stories in 2009: a Wall Street runaway success. This year alone, Green Mountain’s stock has jumped by more than 120 percent. The company has maximized its selling opportunities by supplying McDonald’s with its “premium” coffee. More recently, in April Green Mountain struck a deal to sell its Keurig coffeemakers and the little containers of coffee designed for them in more than 3,000 Wal-Mart stores.

Along the way, Green Mountain embarked on a growing list of sustainability projects. During a session at last week's Internet Retailer Conference & Exhibition in Boston, Green Mountain’s vice president of environmental affairs, Paul Comey, shared several ways Green Mountain not only practices sustainability in a profitable way, but also how it publicizes its green practices to consumers.

As Comey pointed out, Green Mountain’s green activities are categorized as “environmental ROI.” “We’re committed to actions consistent with an environmental conscience in all aspects of our business operations,” he said. “We consider the environmental impact of our operations in every decision.”

In its pollution prevention and reduction program, Green Mountain reuses and recycles wherever feasible by promoting and working toward the use and purchase of sustainable resources, and by meeting or exceeding requirements, Comey said. Here are some examples of how the company reduces, reuses, recycles and recovers — all with financial implications to its bottom line:

* Reduced the amount of nonrenewable materials in the coffee packaging of its Newman’s Own Colombian Special coffee. “We never would’ve had this relationship of co-branding [with Newman’s Own] if it weren’t for who we are and what we do,” Comey said.

* Reuses cardboard. In its plant, Green Mountain handles tons of cardboard. It used to just pay a company to take it away and dispose of it. But now it bands all cardboard up and ships it to a company that sells it to larger box stores that import from overseas. “Now we get paid to have it picked up,” Comey said.

As for the cardboard it doesn't ship out, Green Mountain shreds it and uses it for packaging. “This sends a great message to consumers that we’re reusing our materials,” Comey said.

* As for recycling, Green Mountain uses pallets made from 100 percent recycled material. Overall, the company has reduced its waste from 600 tons to 400 tons.

* Green Mountain also has an extensive energy recovery program. It’s increased the generator in its plant from 35 percent efficiency to 70 percent efficiency, Comey said. It also installed laser-jet printers that eliminate hazardous materials while producing cleaner printing jobs. “They burn off the top layer of ink when you do your own barcoding,” he pointed out.

Among other energy reduction measures, the company installed nitrogen generation, increasing its common footprint.

* In its fulfillment center, Green Mountain was able to increase natural lighting, making it a better place to work while cutting wattage 50 percent, saving $18,000 a year.

As for promoting its sustainability efforts, “customers like what we do,” Comey said. “We walk pretty softly about telling them, but have done more over the years. If you don’t say anything about it, you’ll never get the PR that lets people know what you are. We want people to think of our company as a business agent for change.”