Does a history of progressive social and environmental responsibility compensate for recent environmental abuse?
Green Mountain Coffee is staring into the face of this question now with criticism of its environmentally noxious single-use coffee pods that work with its Keurig brewing system. Last year, more than 80% of Green Mountain’s $803 million in sales came from the nonrecyclable, nonbiodegradable coffee pods. A New York Times article says this year the company “expects to sell nearly three billion K-Cups, the plastic and tinfoil pods that are made to be thrown away – filter, grounds and all – after one use.”
Since its founding in 1981, Green Mountain Coffee has practiced progressive sustainability. It offsets 100% of direct greenhouse gas emissions, contributes 5% of pre-tax profits to nonprofits, runs a biodiesel fueling station and developed a hot-beverage cup with a compostable lining. I regret that I didn’t cover this when I interviewed Mike Dupee, Green Mountain Coffee’s vice president of CSR because I think he would have given it a fair shake.
This brings up several questions:
- Does this discount Green Mountain Coffee’s other sustainability initiatives?
- What’s the proportion of impact to image?
- How should Green Mountain Coffee handle this?
- How does brand acquisition impact the parent brand’s sustainability image?
- Does this discount Green Mountain Coffee’s other sustainability initiatives?
Not at all. $2 million in support of supply-chain communities is still $2 million. But, conversely, the company’s history of social good doesn’t neutralize the environmental cost of its products. There isn’t a sustainability ledger that balances good actions against bad. - What’s the proportion of impact to image?
This is the ever-delicate balance of impact to image of impact. I argued that Microsoft’s and CVS’ social impacts outweigh the public’s perception of them. But more frequently, brands have a disproportionate focus on image over impact. Reputation is a benefit of corporate social responsibility, but it’s also an objective. Green Mountain Coffee’s sum image as a sustainable company is up for grabs because its sum impact is tilting toward the negative. So, while there’s not a Sustainability Ledger, there is an Image Ledger where good cancels bad and bad cancels good. - How should Green Mountain Coffee handle this?
Transparency and communication should come before the solution. Green Mountain Coffee should claim the problem rather than arguing that the K-Cups have an environmental benefit. The company’s chief executive Lawrence Blanford says brewing one cup at a time means less wasted coffee at the bottom of the pot, which reduces the overall environmental impact per cup of coffee. By claiming the issue and working publicly toward a solution, the company can take a leadership role in waste reduction against its single-use-coffee competitors and reclaim its identity as an environmentally aware–if not environmentally friendly–brand. One heretical suggestion is to educate consumers on the issue and poll their willingness to pay more for biodegradable packaging, switch to reusable coffee filters or recycle the pods through pre-paid mailers.
So far, Green Mountain Coffee is prototyping a pod made without plastic and aluminum foil and conducting a life-cycle analysis to understand the environmental cost of the pods. The analysis should be used to drive viable solutions rather than to downplay the K-Cups’ environmental cost. If Green Mountain Coffee uses the analysis to vindicate environmental claims rather than to guide sustainability, it loses. Levi’s is a good example of what to do. When a life-cycle analysis identified consumer behavior (washing and drying the denim) as the highest environmental cost, Levi’s didn’t smirk and say, “Whew, not our problem.” Instead, it launched Care to Air, an awareness campaign and contest to shift consumer behavior in favor of the environment. - How does brand acquisition impact the parent brand’s sustainability image?
Green Mountain Coffee pulled a reverse Coke-acquires-Honest Tea-to-polish-its-image when it purchased Keurig in 1996. I’m going to leave this topic for another post, but it’s an unexpected example of how brand acquisition significantly impacts the parent company’s sustainability image.
Green Mountain Coffee is still a progressive company that other companies can learn from, but it’s facing a serious challenge as it grapples with how to lower or neutralize the environmental cost of its biggest revenue generator. We can learn a lot from what happens next–let’s just hope it’s a story of What To Do Right.
I'm Olivia Khalili. I created Cause Capitalism to show you how to grow your business by incorporating a social mission. 
Third paragraph under “How should Green Mountain Coffee handle this?”…
“looses” should be “loses”. Spread the word. I see people making this mistake all the time!
Oh – other than that, good article.
Otto, fixed. Appreciate it! Glad you liked the article.
I’ve been aware of this since having Dean Cycon, founder and CEO of Dean’s Beans (an organic/fair trade roaster here in Massachusetts) on my radio show several years ago. He mentioned that Keurig had come to him to supply the coffee–and even though it would have been millions of dollars, he turned them down for just these sorts of environmental reasons.
In addition to being perhaps the most ethical business owner I’ve ever met, he’s also a good writer. His book, Javatrekker, is a great piece of travel writing about his adventures buying fair trade coffee in various out-of-the-way corners of the world.
–Shel Horowitz, primary author of Guerrilla Marketing Goes Green: Winning Strategies to Improve Your Profits and Your Planet
Shel,
Thanks for sharing this experience. We all talk about integrity and values, but it’s really important to hear these stories of business leaders who made tough decisions based on their business/life philosophy.
Thanks for the comment.
Is there anywhere that you have written more about this? Would be terrific to uncover out additional.
Georgann,
Thanks for your interest. This scenario represents a tension between a company’s product (and revenue) and sustainability intentions that’s not unique to GMC. I haven’t written about reconciling these two forces although I did do a really interesting interview with Mike Dupee, who heads Green Mountain’s CSR initiatives (whose work and conception of this space I respect).
Thanks again,
Olivia
Green Mountain is also one of those greedy corporations that helped create our current economic crisis. They have been fined by the SEC for intentionally falsifying financial statements and overstating profits, causing considerable losses not only to wealthy investors but also to pension and retirement funds.
GMC is another case of greenwash. I’d rather buy my coffee from a small local roaster.
May I note that a French Press (a type of coffee maker not a brand) makes a vastly better quick cup of coffee without all that waste, and you can buy freshly roasted, freshly ground coffee for it. A single cup dripping cone is only a little more work.
Thank you for bringing some sunshine to this issue. Every time I see those cups I can’t believe that GMC has allowed themselves to be so deluded as to think that it’s environmentally responsible. I remember when they were a small company with large environmental ambitions, and I’ve been confused and disappointed by this development.
Up to now I have felt alone in thinking this, but now I don’t. Thanks! I won’t be buying or drinking GMC in any form until they resolve this issue.
Cindy, in Vermont
Hi Cindy,
Thanks for your comment. I must say, I heard GMC speak about this issue last week and they are actively trying to work on different packaging and disposal means. The company does truly beneficial things that come from a sincere place. But this is a sticky issue.
Thanks for your thoughts–it’s great to hear from readers, consumers and carers.
Olivia
Hello there! Would you mind if I share your article with my twitter group? There’s a lot of people that I think would really enjoy your content. Please let me know. Many thanks!
Carl