Marketing PlanGreen Mountain Coffee Roasters, Inc.
I. Executive Summary
Green Mountain Coffee Roasters currently has a revenue growth rate of 35.5% over the last 5 years. This company is growing right along side the fastest growing portion of the of the coffee industry, the high-end specialty coffee market. Green Mountain 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 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.
II. Description of Company
Green Mountain Coffee Roasters began in 1981 as a small caf? 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.
III. Description of the Industry
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 in equity do 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