Green Mountain Coffee sold in cups

Can coffee have a different model from Starbucks? Green Mountain Coffee (Green Mountain Coffee Roasters), a coffee company founded in Vermont in 1981, has seen its share price rise in recent years, far surpassing Starbucks. Its coffee is of high quality but low price, and it doesn't make money by selling coffee, but it can sell 1 billion K cups a year, which is the real source of profit. Through the dialogue between two Chinese and American coffee lovers, we can understand how Green Mountain Coffee affects consumers.

Christina is a typical company worker in Seattle in the eastern United States. Early in the morning, she drove to work on the wide highway. While refueling at the ExxonMobil gas station, she routinely made a K cup of coffee called Green Mountain Coffee in front of a single cup coffee machine called Krieger. This cup of coffee costs $1, while a cup of coffee of the same quality often costs $6 at Starbucks. By comparison, consumers like Christina naturally choose Green Mountain Coffee, which is cheap and tastes so good that customers don't have to go to coffee shops-Green Mountain Coffee doesn't have its own store. You can enjoy it anytime, anywhere at a roadside gas station or at a convenience store at the corner of the street.

Christina's company also has a branch in Shanghai, China, where young Li Xiao works. She hurried to work in Lujiazui early in the morning. as soon as she stepped out of the subway station, she stepped into Starbucks on the ground floor of the office building and stood in line for 20 minutes to buy a latte for 28 yuan. A cup of coffee worth 28 yuan is not cheap, but Li Xiaoyi always stands in line to buy coffee. I don't know why, it may be attracted by the white-collar culture touted by Starbucks, or the taste of freshly ground hot coffee is irresistible. It was not until Christina went to Shanghai on business that Li Xiao knew that there was a kind of coffee called Green Mountain Coffee and a kind of cup called K Cup on the other side of the ocean. As a result, Green Mountain Coffee led to a conversation between Chinese and foreign coffee lovers.

K cup?!

On Christina's first day at the company, Li Xiao met her in the tea room looking for something.

"what's the matter? Can I help you? " As a landlord, Li Xiao is very enthusiastic.

"I'd like some coffee." Christina said.

"that's not easy. I'll make a pot." Li Xiao immediately replied that he was also a coffee addict.

"A pot of coffee? Oh, NO! " Christina waved her hand hurriedly. "it's a big pot, and all I have to do is drink a cup of fresh coffee, and over time, the aroma of the remaining coffee will go away and the taste will not be so good."

That's very picky. Li Xiao muttered to himself. You think this is at Starbucks, this is in the office.

"do you have a K-cup? I'm looking for a K cup of Green Mountain Coffee. "

"what? K cup?" Li Xiao suspected that he had heard it wrong. "I only know how to sing, not the K Cup."

There was no more choice in the office, so Li Xiao had to make a cup of instant coffee for himself and Christina, drinking and talking in a corner of the rest area.

"how could you not know about the K Cup?" Christina is weird, too. You know, in the United States, especially in the east, thousands of offices and homes have K cups of Green Mountain Coffee. The predecessor of Green Mountain Coffee is the Green Mountain Coffee Roaster, which was founded in 1981 and is headquartered in Waterbury, Vermont, producing more than 70 kinds of Arabica coffee. Green Mountain Coffee does not have its own stores, and its main downstream customers are more than 6700 wholesalers, such as grocery stores, convenience stores, gas stations and resorts. In addition, it also operates the office delivery business. Green Mountain Coffee doesn't make money selling coffee, but the single-cup coffee machine and a matching cup called Krieger (containing coffee or tea) account for 3/4 of annual income.

"the K-cup is a patented design that maximizes the aroma of coffee. It looks like a paper cup and has a smaller paper cup-shaped penetration device that can only penetrate liquid. It is filled with coffee powder and sealed with an aluminum foil cover to ensure that the aroma of the coffee is not emitted. Put the K cup into the single cup coffee machine of Green Mountain Coffee, press the button, and the pressurized injection pipe will break through the aluminum foil cover into the filter cup and inject hot water. Within a minute, a cup of strong coffee appeared. " Christina said and drew with her fingers.

"is it disposable?" Li Xiao is a little curious.

"Yes, one at a time. The K-cup is worthless after one use, because the cup is broken and the contents are consumed. In short, a K-cup is a big cup and a small cup, and a large cup covers a small cup. The small cup is the filter cup, which contains the ground powder of roasted coffee beans. as soon as the water rushes, the liquid is filtered into the cup outside, and we drink this cup of coffee outside. The top of the K cup is completely sealed to ensure that the aroma of coffee stays in the entire cup. "

"how expensive is it to use one at a time?" Li Xiao asked.

"can you guess the price?" Christina winked playfully.

"it should be expensive, at least as much as Starbucks, right? Listening to you, I feel that you have a high demand for coffee. You think highly of Green Mountain Coffee. This K-cup is naturally expensive. "

"Oh, wrong answer." Christina smiled heartily. "in the United States, a 24-cup K-cup usually costs only $12, or $0.50 per cup, while the same cup of coffee costs $6 at Starbucks." Now that the economy is in the doldrums, many Americans have turned to the K-cup of Green Mountain Coffee because it is cost-effective. "

"Oh, Americans are planning to make a living now," Li Xiao asked. "the K cup of Green Mountain Coffee is so cheap, so its own coffee maker must be very expensive. Wool comes from sheep."

"in the United States, it costs only $100 each."

"Ah?" Li Xiao suspected that he had heard wrong again. As a senior friend, he knows the price of a coffee machine at least and once intended to buy one. "won't it lose money?"

"there is no loss, and of course there is no profit at all. It is sold at cost."

Razor-blade mode?!

"how does Green Mountain Coffee make money?" After doing it for a long time, it turned out to be selling at a loss, Li Xiaoxiang thought.

"K-Cup, of course. Homes and offices in North America consume more than 3 million K-cups a day. This is a huge figure. I remember that one year, the annual report of Green Mountain Coffee revealed that 3/4 of the annual sales revenue came from coffee makers and K-cups. "

"therefore, Green Mountain Coffee sells a single-cup coffee machine and a K-cup with coffee, and the main profit growth point is on the K-cup coffee." Li Xiao thought about it carefully. After studying economics for several years, I also summed it up: "isn't that the razor-blade model? at the end of the 19th century, Gillette was the first to try the razor-blade business model. Razors are cheap, but blades need to be constantly replaced. Gillette sells a major product at a cheap price (or free of charge) and makes money by selling corresponding consumables. "

"it's kind of like that. We need to go further." Colleagues who both majored in economics and are also coffee lovers began to think.

"what's the difference between that and Nestle coffee bags? we have plenty on our side." Li Xiao shook the coffee cup in his hand, and the Nestle coffee inside looked good.

"No, of course there's a difference." Christina waved. "first of all, the taste is different. Nestl é offers similar products, authorizing electronics manufacturers to make coffee machines for it, but the coffee used can only be coffee bags made by Nestl é. Green Mountain's business model goes a step further. Other coffee makers, tea or hot cocoa producers can also use "K-cup" packaging for use on Green Mountain coffee machines, but they have to pay Green Mountain a royalty of 6 cents per cup. I remember in 2008, Green Mountain Coffee sold 1 billion K cups a year. And Green Mountain Coffee's single cup coffee machine and K cup are a perfect match. The single cup coffee machine precisely controls the amount of water, water temperature and pressure, which are all designed to maximize the aroma of coffee. "

"A simple calculation, 6 cents per K cup, 1 billion cups, that is more than 60 million US dollars." Li Xiao was moved by this number. He did not expect that the small K-cup had such a huge sales scale. "are there many kinds of K-cup now?"

"of course it's a lot. As I said, Green Mountain Coffee allows other coffee or beverage manufacturers to use "K-cup" packaging, and there are now hundreds of coffee, tea and hot cocoa from more than a dozen brands. For example, in 2007, Carreb, a well-known American coffee brand, joined the K-Cup brand portfolio through a concession agreement. In the United States, Green Mountain's innovative technologies for K cups, packaging lines and coffee machines have applied for 32 patents, compared with a total of 69 patents worldwide. "

Little stature? Broad-minded!

"if every industry can grow into a leader, Starbucks is undoubtedly a giant in the coffee industry, but under the aura of Starbucks, small business Green Mountain Coffee also has its own great wisdom. And its performance is better than the industry leader, has more stamina, and brings us more surprises. With the price advantage, I think more and more Americans will choose Green Mountain Coffee. " Christina talks about Green Mountain Coffee. She consumes so many K cups, drinks it on the way to work, drinks at the office, and buys a cup at the convenience store. She can be regarded as a senior customer of Green Mountain Coffee.

"by the way, I remember the news that in March 2011, Starbucks signed a strategic cooperation agreement with Green Mountain Coffee, and Starbucks joined hands with Green Mountain's single-cup coffee machine to hit the retail market of whole-bean packaged coffee products. At that time, I wondered where this Green Mountain coffee came from. " Li Xiao sighed, "it turns out that small enterprises can also talk to large enterprises on the same platform."

"not only that, Green Mountain Coffee is a small business, but it also has a big mind."

"Why did you say that?" After hearing Christina explain so much, Li Xiao felt that the profit model of Green Mountain Coffee was clear, but he didn't know where to start.

"what is coffee?" Christina took a turn.

"you're asking the right person. I've been drinking coffee for many years, and of course coffee is a good thing. You see, in the middle of winter, drinking a cup of coffee is very warm, and then, of course, it wakes up. "

Green Mountain Coffee thinks: Coffee is more than just something to drink. It connects us to each other, and to the rest of the world. " Christina said solemnly.

"Coffee is not just a drink. It connects us to each other and connects us to the world. " Li Xiao immediately understood the meaning.

"from the whole coffee manufacturing process, in the planting process, the purpose of Green Mountain Coffee is to protect the environment. In 1989, Green Mountain established an employee Environment Committee, which hopes to explore ways to achieve the company's environmental goals in business practice. In the process of acquisition, Green Mountain has always insisted on protecting the interests of farmers. In the production process, Green Mountain strives to reduce emissions and pollution. There are specific examples of these. You can check the information yourself later. "

"you have said so much, in fact, it is all about social responsibility, but Green Mountain Coffee will eventually rise to the commercial demand."

"Yes, that's why Green Mountain Coffee is smart. This concept of environmental protection and the delicious and healthy Green Mountain Coffee itself have been perfectly integrated and become one of the selling points of Green Mountain Coffee. You think that the coffee, from the source planting, acquisition to the final production, is strictly in accordance with the green concept, and in the end, the K cup we enjoy is naturally healthy and green. This is a good explanation of what is really cheap and good quality ah. "

"Yes, corporate social responsibility seems to be a very empty thing, but as long as it can be transformed into a kind of commercial value, it will be very real." Li Xiao agreed.

Li Xiao listens carefully and remembers carefully, thinking that when he goes to America one day, he should also have a good taste of this Green Mountain coffee and carefully study this small K-cup. Oh, it's not only small stature, but also great wisdom.