COMMENT: Green Mountain profits through charity
A US magazine has rated Green Mountain Coffee as the fifth best corporate citizen.
Green Mountain Coffee has been recognized for its longstanding reputation as a socially conscious company. Yet growing consumer demand for Fair Trade coffee has created increasing competition from larger companies. In order to maintain its niche position, Green Mountain must look for more inventive ways to strengthen its association with ethically responsible business practices.
Vermont-based Green Mountain Coffee deservedly prides itself on the range of charitable works it has undertaken over the last ten years. Now it has been ranked fifth on Business Ethics Magazine's list of Best Corporate Citizens. Central to its recognition as a socially responsible company is the extensive use of Fair Trade coffee beans.
With 42 of its 100 coffee varieties carrying the Fair Trade Certified label, Green Mountain's sales of Fair Trade coffees grew by 92% in the past year. According to Rick Peyser, spokesperson for Green Mountain Coffee, "customers want the human link."
Its partnership with organic food manufacturer Newman's Own has allowed the company to seek a wider audience and solidify its reputation as one of the first and strongest proponents of Fair Trade organizations. Green Mountain recently announced plans to sell its Newman's Own coffees in over 330 Stop & Shop stores and 776 Publix Supermarkets.
However, the growing demand for socially conscious coffees means that other companies are entering this niche market too. Sara Lee recently began offering Fair Trade certified beans, along with Procter and Gamble. Shaw's Supermarkets is introducing Fair Trade coffee to its shelves, and Dunkin' Donuts will begin rolling out a premium espresso line comprised entirely of Fair Trade blends. Ahold USA (which owns Stop & Shop) will stock over 1,200 of its supermarkets with its own brand of Fair Trade beans.
With just $123m in annual sales, Green Mountain needs to keep its foothold in the Fair Trade market and ensure that these larger companies do not beat it at its own game. With more monetary resources at their disposal, Green Mountain's rivals are in a position to squeeze it out of the ethical market through outspending and out-producing. To stay competitive, Green Mountain should seek to capitalize on its grassroots image, utilizing viral marketing strategies to permeate the $8.4 billion gourmet coffee market.
Sectors: Soft drinks
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