Green Mountain Coffee: The Dr. Jekyll and Mr. Hyde of Socially Responsible Investing

D Lombardo profile picture
D Lombardo

Like Robert Louis Stevenson's 1886 novella entitled the The Strange Case of Dr. Jekyll and Mr. Hyde, Green Mountain Coffee Roasters (NASDAQ:GMCR) has a split-personality.

Company Description:

Green Mountain Coffee Roasters is a specialty coffee company based in Waterbury, Vermont. The company roasts 100% Arabica coffees and offers over 100 different coffee selections, including certified organic, Fair Trade Certified, estate, and flavored coffees that sell under the company's and Newman’s Own Organics brands. In 2006, the company acquired Keurig, a manufacturer of single-cup ("K-Cups") brewing systems.

Green Mountain Coffee Roasters is considered a benchmark for what a Socially Responsible company's supposed to look like - a gentleman to society. It is often highly ranked, sometimes #1 (2006, 2007) as a company with the most Corporate Social Responsibility (Source: CRO Magazine, 2006-2010)

What we have here appears to be two entirely different companies. How can one justify an investment without being able to describe it! Consequently, we are no longer recommending investing in GMCR.

Looking at GMCR's website, one sees how transparent the company is - the outstanding corporate citizen of Dr. Jekyll. There is a detailed Code of Ethics and Mission Statement. Corporate Governance information is clearly displayed and committees are fully disclosed to show that their members are independent (see below). In fact, CSR is so important to the company, they've elevated it to a Committee headed by Chairman Bob Stiller.

The company's stock has risen 1,340% plus during the last 5 years and earnings growth has been great. GMCR 5Y stock chart.

However, there's a creepy, opaque face - the other side of the Green Mountain into the Black Forest, where the company's financials have yet to see the light of day. In fact, the forest is darkening. Beginning 1Q'11, management said it was no longer supplying K-cup shipments. And this begins my outline of several issues I

This article was written by

D Lombardo profile picture
Dom received his MBA in Management and Finance.He supports all Crypto with the exception of Shtcoins.Areas of expertise are: Exponential Age (i.e, Cathie Wood) names and Blockchain.

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