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Vermont’s Green Mountain Coffee Roasters: Selling Activism

3p Contributor | Monday August 31st, 2009 | 3 Comments

By Richard Seireeni

The following is an excerpt from The Gort Cloud: The Invisible Force Powering Today’s Most Visible Brands. It has been adapted for the web.

The Challenge

The birthplace for many of today’s green brands is the verdant hills and valleys of New England. This is where Tom’s of Maine, Ben & Jerry’s, Stonyfield Farm, Green Mountain Coffee Roasters, Burt’s Bees, and others were founded. These companies grew out of the counterculture backlash against corporate America and were bred on the philosophies of the Whole Earth Catalog, rural communes, food co-ops, and a belief that less is more, simple is smart. All of these companies believed in making healthy, earthfriendly products and that profits should serve a purpose higher than simply returning dividends to investors.

This chapter studies Ben & Jerry’s Homemade, Green Mountain Coffee Roasters, and Stonyfield Farm. Each shares a commitment to producing products that are natural and, in the case of Stonyfield Farm and Green Mountain Coffee, also organic. They share one other differentiating quality. Each is committed to social activism as a mechanism for grounding its culture, ennobling employees, raising awareness, and building customer loyalty.

Two of these companies were bought by multinationals that recognized their value and the growing demand for healthy and sustainable products. How they managed to escape mission dilution is explained here. All three have experienced rapid growth despite growing competition—both within their green foods category and from without, following the entry of mass retailers into the natural and organic marketplace.

So how did they get where they are, and how do they deal with a changing competitive landscape?

The Solution

Each of these businesses has been an eco-pioneer and built alliances within the natural foods and LOHAS consumer movement. It’s been a cooperative effort that has led to the growth of health and wellness retail channels, making their products more accessible and easier to buy.

Stonyfield Farm and Ben & Jerry’s have become adept at the shelf space dominance game, so crucial to survival in the highly competitive grocery store business. Both have been acquired by multinational food giants, presenting special challenges, but so far parent and acquired brand have both recognized the importance of maintaining integrity.

All three have aligned environmental and social issues with their individual corporate missions. Despite becoming mainstream brands today, they continue to use an anti–Madison Avenue marketing style.

The food industry is the birthplace of the sustainable market. This should come as no surprise: We put food in our bodies. The idea that some of the things that we eat could be toxic or otherwise detrimental to our health has spurred a multi-billion dollar industry in natural, organic, local, and/or additive-free foods. These health foods are not necessarily grown, packaged, and delivered sustainably, but most are less demanding of the earth’s resources than similar products from mega-farms and corporate food giants.

The health food movement has its origins in the hippie communes of the 1960s and the bulk food co-ops that became the trading posts of this culture. It grew slowly, getting a boost from the LOHAS (Lifestyles of Health and Sustainability) crowd with their “love the earth, heal my body” message. The LOHAS phenomenon grew at an 18 to 25 percent annual clip into a mainstream market segment that saw $13.8 billion in consumer sales in 2005, representing a 284.4 percent jump in eight years, according to CNN. The humble and sometimes funky food co-ops spawned Whole Foods, Wild Oats, and similar chains, while mass food marketers also began to take notice.

Organics, with the certified organics label, have become the preferred choice for natural foods because of mass marketers’ misuse of “all-natural” claims. With its higher margins and huge growth, all food retailers are scrambling for organic product, which has limited supply. Alongside Costco, Trader Joe’s, and many of the big supermarket chains, Wal-Mart now calls itself a distributor of “organics for everyone,” recently doubling its organic offerings at 374 stores nationwide. Food-sector giants such as General Mills and Kellogg’s have become players in the sector, and many veteran organic food makers have been purchased by multinationals.

In fact, the health food movement has had so much success that suppliers have become overwhelmed. Given the limited number of certified farms and ranches, demand is outstripping supply, with production going to the strongest players. This has made it increasingly difficult for the smaller health food makers to remain competitive and profitable.

Three brands that have ridden the health food wave and are synonymous with natural and sustainable are Ben & Jerry’s Homemade, Green Mountain Coffee Roasters, and Stonyfield Farm. All three have developed far-reaching environmental and social responsibility agendas and are now benefiting from the fact that “perceptions of environmental, ethical, and social stewardship are the fastest growing contributors to consumer brand value,” according to Z + Partners, a consumer research group.

These three are reacting to the growth and challenges in the health food industry in different ways. Two have been purchased by multinational conglomerates headquartered in Europe—Ben & Jerry’s by Unilever and Stonyfield Farm by Groupe Danone. Green Mountain Coffee remains independent.

——

Finding a corporate voice in a social mission.

The company’s founder and chairman, Bob Stiller, discovered Green Mountain Coffee Roasters, then a Waterbury coffeehouse, on a trip to Vermont in 1980. Impressed by the coffee’s great taste, he purchased the establishment a year later and spent the next twenty-six years growing the coffeehouse into an international coffee supplier. In May 2007, he stepped out of his role as CEO, but unlike Ben Greenfield and Jerry Cohen of Ben & Jerry’s, he did not sell to a conglomerate. Under present CEO Larry Blanford, the company continues to use social action as a platform from which to market its product.

GMCR donates 5 percent of pre-tax earnings toward its good works. “We are motivated to achieve success because the more profitable we are, the more good we can do in the world,” the company’s Web site states.

“The first part of our mission is to create an exceptional coffee experience from tree to cup, making sure that all of the stakeholders, from growers to consumers, benefit from that,” says Whalen. “The second part of the mission is about changing the way the world understands business. That’s something we take seriously. We’re trying to communicate to the consumer that these issues are part of who we are, and that as a consumer you have the power to do something about them.”

Coffee production presents unusually fertile ground in terms of opportunities to do good. First, coffee is the world’s second most heavily traded commodity, trailing only oil. As the Green Mountain Coffee Roasters Web site states, “With 25 million coffee farmers in the world and an estimated 100 million people working in the coffee industry in total, we have a remarkable opportunity to positively touch the lives of so many people through our work.”

The site also talks about the “Coffee Crisis” of 2002, when a collapse in coffee prices “drew attention to the ongoing plight of coffee farmers.” According to the site, “The Coffee Crisis threatened entire cultures and communities as well as the stability of long-term supplies of high quality, specialty coffees.” Things have grown better since ’02, but farming conditions remain poor and much technical assistance is still needed.

The Web site, which doesn’t spare any detail when it comes to reporting on the company’s socially responsible activities, goes on to say, “Millions of coffee-farming families continue to lack basic necessities such as healthcare, education, and food, forcing them to either reduce their investments in environmentally sound practices, abandon their land, gather more debt or switch to illegal agricultural crops.”

Green Mountain Coffee makes a case that the Coffee Crisis mirrors the global human rights and environmental crises and cites the following statistics pulled from a variety of sources: “Every 14 seconds, 5 children younger than 5 years of age die of hunger and other preventable causes . . . Nearly 3 billion people live on less than $2 per day . . . Nearly 852 million people worldwide are undernourished . . . About 1.2 billion people worldwide—400 million of them children—do not have access to clean water.”

Many of these points are touched on at the company’s visitor center, housed in Waterbury’s Amtrak train depot, just adjacent to Green Mountain Coffee Roasters’ headquarters. A multimedia presentation about the company’s connection with indigenous coffee producers around the world is projected on the ceiling as well as on seven screens placed around the room. It is a powerful piece that takes the viewer around the coffee-growing world to such places as the Huatusco Cooperative in Mexico, the Koakaka Cooperative in Africa, and the Gayo Organic Coffee Farmers Association in Indonesia.

The company’s consumer education initiatives also involve a great deal of instruction on the nature of coffee production. Extensive Web site sections are devoted to the history of coffee as well as the company’s manufacturing processes. The unique nature of Green Mountain Coffee’s methods is emphasized, including a description of Appropriate Roast—the trademarked name of the company’s roasting technique.

The challenge of communicating to disparate stakeholders.

Michael Dupee is one of the Green Mountain Coffee Roasters execs at the rally this morning. “You do these [social and environmental action initiatives] because it’s the right thing to do,” he says. “You do the programs, hopefully you get results, hopefully you know what those results are, and then you’ve got to talk about them. You need to share them with people in a way that doesn’t oversell it, doesn’t undersell it . . . but is communicated in a way that people hear you and are able to connect it with their own experience.”

Telling this story is complicated “because there are so many stakeholders,” he notes. “You’ve got to connect with your community, you’ve got to connect with your customers—with that business or that restaurant selling your coffee—and you’ve got to connect with the consumer who goes into the bagel shop and says, ‘I want that coffee.’ You’ve got to connect with your supply chain, you want to connect with your employees. That’s a lot of people to tell a complicated story to, and it’s a real challenge.”

“Any company that’s doing this kind of stuff will tell you they don’t tell their story well enough,” Dupee continues. “We’re not sharing enough of what we do in enough ways. And that’s really the frustration, that’s the tension. For example, two years ago we made the decision to align our social responsibility work with our Millennium Development goals, which is great, but where do we go with that? How do you tell that story? Even after you figure out how to put it into five hundred words or less, there are a very small number of people who are going to want to hear that. And there’s probably some way to say it in eight seconds, ten seconds, twelve seconds, but we haven’t figured that out yet.”

Building markets or serving trends?

Dupee believes that too many companies today are jumping onto the sustainability bandwagon with skin-deep credentials. “It’s people using code words and buzzwords to try to communicate some level of virtue that may or may not be true. It doesn’t do justice to the kinds of things that we’re all working on here.”

“I think if you really want to be engaged and if you’re really interested in creating a forward-looking vision and realizing it, surfing market waves and waiting for consumers to tell you what to do is not the way to do it,” he continues. “That’s not where the real thinkers are. That’s not where real progress is. That’s not where true inspiration is.”

“Business is the most potentially powerful agent for change in the world,” he continues. “It used to be community, and then it was religion, and now it’s business. That’s what we need to use as the tool.”

Creating a direct relationship with the consumer.

“We don’t do a lot of traditional media,” says Whalen of the company’s marketing priorities. “What we do a lot of is grassroots events and sampling—our coffee is served in tens, if not hundreds of thousands, of individual locations.”

The company also communicates with consumers through direct mail, catalogs, and brochures, as well as its Web site. Like Ben & Jerry’s, it places socially and environmentally responsible messages on its cups and bags of coffee.

“We change the message on our cup about every three or four months, and we probably have a dozen different messages at any given time,” explains Whalen, holding a cup that details the company’s efforts to be carbon-neutral, including its Gort Cloud connections with other New England companies and the connection to the Sioux Nation NativeEnergy project.

“Through our communication effort, we hope that people will begin to understand these messages, internalize them, and frankly do something about them,” Whalen says.

Connecting products to causes.

Again like Ben & Jerry’s, Green Mountain Coffee connects products to specific causes, hence its Rain Forest Nut selection and its Gombe Reserve coffee, which was developed in collaboration with the Jane Goodall Institute. Other socially conscious products include National Wildlife Blend, introduced in cooperation with the National Wildlife Federation to help support Fair Trade and organically certified family owned farms in Central and South America that raise shade-grown coffees while providing habitat for migratory songbirds.

The success in promoting the positive connections made between Green Mountain Coffee and its indigenous suppliers has inspired the company to expand its product offerings. At the visitor center in Waterbury, you can purchase everything from Indonesian masks to Kenyan beads to pottery from Peru and Colombia. At the Web site and through the catalog, other food and beverage products such as Fair Trade Organic Cocoa, Mexican Vanilla, and Tanzania Chocolate Sauce are also available, as are Vermont-based products such as Maple Butter and Woodstock Cranberry and Maple Walnut Granola.

Media-shy or media-savvy?

“We have a long history of instances where we’ve tried to raise the bar a little,” Comey says about environmental and social initiatives. “Some people would come in, see what we’re doing, want to write a story, and we’d say no, because next thing you know people will accuse you of greenwashing.”

“We don’t say, ‘Look at us, we’re green.’ We are green, and then we tell the story. There’s a subtle difference,” explains T. J. Whalen. “Successful green marketing comes from the inside and works out.”

Sustainability increases sales.

Whalen says there is a definite link between Green Mountain Coffee Roasters’ rising coffee sales and its image as a company concerned about sustainability issues. “We track it through consumer surveys, which measure and monitor what consumers think of us and what they think of our competitors,” he says. “The coffee market is a big complex game, and we try to play it with as much information as we can.”

The research is “telling us we’re on the right track,” he continues. “Increasingly, consumers understand and value the message of sustainability.”

An infectious culture of environmental respect.

As Green Mountain Coffee Roasters’ VP of environmental affairs, Paul Comey is leading the way toward sustainability and is responsible for originating the rally today.

“There’s a level of environmentalism in the company that kind of wells up from within,” he says of the people who work here. “You have an obligation to society to act responsibly.” Comey points to Don Ostler, a GMCR route supervisor who has been part of the biodiesel truck introduction today. “He’s been such a champion of it, he’s made it work. That’s the kind of employee base that makes the company great,” says Comey.

Todd Jones has been in charge of Green Mountain Coffee’s anti-idling program, which instructs the company’s truck drivers to cut off their engines during delivery stops. “I was one of the skeptical people at first,” Jones says. “But unless it gets down to fifteen below,” it’s doable. “It’s truly astounding how much fuel is wasted. If everyone just stopped their unnecessary idling, there’d be a huge impact.”

Growing more productive employees.

Whalen says that most environmental and social initiatives at the company, which are ultimately what the marketing department uses to promote the products, “come from bottom up, as opposed to top down.” “You’re encouraged to make a positive difference,” he notes of the Green Mountain Coffee Roasters company culture. Referencing Comey’s transition from facility VP into VP of environmental affairs, “It can take you into a different role, but that is encouraged.”

“Bob Stiller believes that when an individual is allowed to follow his own passion, it will work better,” Whalen continues, hence the extensive continuous learning and development seminars offered by the company. “At Green Mountain Coffee, it’s about what you’re passionate about. And when that’s sincerely carried out, it leads to great business results . . .” and ideas, apparently.

Rick Peyser, the company’s former director of public relations, “cultivated a passion for helping coffee growers,” Whalen says. “So he was able to move into a role where that was his full-time focus.” Elected board president of the Specialty Coffee Association, Peyser was responsible for bringing a guest speaker to the organization’s convention. “He realized there had never been a woman speaker, so he brought in Jane Goodall,” explains Whalen. “She gave a rousing presentation about the relationship between chimpanzee habitats and coffee around her preserve in Africa. Many of the area farmers were engaging in negative impact practices, leading to deforestation and reducing chimp habitat.”

As a consequence, Lindsey Bolger, Green Mountain Coffee’s director of coffee sourcing and relationships, traveled to Tanzania to forge a partnership that would create a new market for the coffee grown in the region, improve the livelihoods of area farmers, and preserve chimp habitat. The result was Green Mountain Coffee’s Tanzanian Gombe Reserve coffee, made from beans grown by members of the Kalinzi Cooperative, a group of twenty-seven hundred small-scale farmers who live near Gombe National Park, the home of Goodall’s chimpanzee study site. The company clearly benefited from the press attention received thanks to the Goodall connection when the flavor was launched.


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  • Pingback: Green Mountain Coffee: Selling Activism? : Chelsea Green

  • K. Tavares

    In “Vermont’s Green Mountain Coffee Roasters: Selling Activism,Finding a corporate voice in a social mission”

    Bob Stiller did the same thing B&J’s did, stepped down and hired a CEO. B&J’s wasn’t taken over by Unilever until years later. Ben and Jerry fought to keep the company but were forced to sell.

    Hopefully this never happens to GMCR.

  • http://www.hevlacoffeeco.com/ Low Acid Coffee

    Great article!

  • http://www.hevlacoffeeco.com/ Low Acid Coffee

    Great article!

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