Wednesday, April 29, 2015

Green Mountain Cofee and Creating Shared Value

This week’s HBS article on “Creating Shared Value” by Michael Porter and Mark Kramer led me to think of a company that I think could be doing a better job of creating shared value, Green Mountain Coffee. Green Mountain is actually known for to be socially responsible through its use of only fair trade coffee, volunteerism and innovation. But as the article mentions, corporate social value is very different from corporate shared value. The author poses the question that company needs to answer, which is, “Are my products good for my customer?” While the answer to whether or not coffee is healthy or not remains up to debate, there is no doubt that plastic is extremely detrimental to the environment. We all my know Green Mountain by its flagship product the Keurig K-Cup, but little do we ever consider the environmental harm that product is causing. In fact, the inventor of the Keurig, John Sylvan, regrets having ever invented the product at all. K-Cups are not recyclable and in 2014, the company sold just shy of 10 billion portion packs. In a viral YouTube video titled, “Kill the K-Cups”, it was stated that the number of K-cups sold in 2014 could circle the entire world over 10.5 times. The popularity of K-cups is only increasing but the company still refuses to look into other environmental friendly alternatives such as biodegradable material or simply easily recyclable pods. While the company argues that pods are in fact recyclable, not all recycling plants are capable of processing them. First they must remove the aluminum lid from the pod in order to remove the coffee grounds. Next, the pod is made of a blend of various plastics and is difficult to process. Green Mountain Coffee must consider the amount of pollution caused by their product. While it is understandable that they make incredible profits using the printer/ink-cartridge model to tie in their customers, the organization is at the point where they are capable of changing the way they produce their products. They do not have to be reusable as most of the company profits come from the cups, but simply creating a pod that has does not have a negative environmental impact. In the meantime, Green Mountain Coffee should be proactive in dealing with this issue. While we cannot expect Green Mountain Coffee to change over night, they should at least pledge to contribute monetarily to offset the pollution while it develops a more environmental sound solution. If the company cannot meet their environmental duties, I feel that government regulations should be put in place to encourage companies such as Green Mountain to pursue shared value.

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