Green Mountain Coffee: A Modern Lesson In Sucking Up

I've been waiting to write about Green Mountain Coffee (GMCR) for a while, but my insider wanted me to wait a while.  Just got the green flag, so Boogitie Boogitie Boogitie!

There has been some growing discontent with the stock market writers, investors, and others.  Seems a bit of it has spilled into court too.  This relates only slightly to all that.

Happy GMCR workers

My source was working in the Knoxville, TN plant and mentioned something that struck me as odd.  The company had one of those Town Hall type meetings where the whole shift was herded into one room and shown a video of what a bang-up job all the workers were doing and what a fantastic job management was doing.

What both I and my source found odd was how the overflowing warehouses were addressed.  Some corporate bigshot (source could not remember precisely) spoke of warehouse workers complaining that aisles were full of stock.  The explanation given was that they had a lot of sales, so the employees should expect that they have a lot of stock.  Source thought that was odd, I thought it was total BS.

A GMCR warehouse.

If you have loads of orders and are outstripping your production, then your warehouses should be going empty, not filling up.  That is unless you have a shortage of warehouse space to begin with, then the warehouse workers would be used to overfilled warehouses.

Some "Fair Trade" propaganda.

I will not give away too much detail, least source get in trouble, but another big item was the drop in overtime accompanied by letting-go of temps after the overflowing warehouse information was set wild.

Green Mountain tries to cultivate an aroma of environmentalism, community, and being the "really nice" coffee company.  Of course, the people who fall for this crap are willing to pay $100 - $180 for a coffee maker that only makes one cup at a time vs. a $20 coffee press that can do the same thing better.  Plus, the Green Mountain K-Cup packaged coffee costs a lot more than regular coffee.

GMCR's K-Cup

Another item I just discovered, GMCR's K-Cup (proprietary single-serve coffee containers) patent is set to expire in September, 2012.  From my amateur observation, those cups and filters can be replicated quite easily.  My source says the packaging machines have gone through several evolutions in the Knoxville plant.

My analysis is nothing new, Green Mountain was the early adopter and endured the high cost curve that early adopters usually take.  Remember your friend who bought the $800 home CD player in the early 1980s?  Same effect.  Soon competitors can move in, buy better equipment, man a plant with experienced former GMCR temps and clean up.

Clean up if this fad of single-serve plastic coffee packs continues, which seems improbable.  The "green" of Green Mountain has the markings of an illusion, a fad, for people to have the 'cool looking' coffee maker in the kitchen next to the recycle bin for all of the little plastic and aluminum cups.  The same folks with the Leaf in the driveway and neon light-bulbs throughout the house.

You know who else was big on greenness, don't you?

Examinees

What does this have to do with Socialism?  Another thin link, probably nothing to be alarmed about.  The new mayor of Knoxville crowed during her campaign that Green Mountain located in Knoxville, TN partly because the unemployment center gave the Career Readiness Certification Exam, from the American College Test folks.  Every new machine operator and quality control tech. (the mayor said 300 to open the plant) needed that certification and there was a government office in Knoxville handing out the paper.  Why couldn't Green Mountain have ACT show up and give the tests to their candidates?  The typical rent-seeker answer is, 'why should we do it when the government can do it for us.'

Green Mountain Coffee Roasters is shaping up to be the Solyndra of the brewed beverage industry, with a cheaper bill to the tax payers.

The 1st Amendment As A Vehicle For Socialism?

New York Judge Lucy Billings: ACLU activist

Those #Occupy clowns and their ACLU allies have "discovered" that the 1st Amendment to the US Constitution applies to private property.  Who knew?

Well, this nonsense goes beyond that. Mayor Bloomberg is quoted saying:

“The First Amendment protects speech,” Bloomberg said in a press conference at City Hall . “It doesn’t protect the use of tents and sleeping bags to take over a public space. Protesters have had two months to occupy the park with tents and sleeping bags. Now they will have to occupy the space with the power of their arguments.”

No, little man, the First Amendment prohibits the government from restricting certain forms of free speech, especially political speech.  It does not give anybody the right to take over private property at all, even to make speeches that the government cannot prohibit in a public square.  Easement law and some other crazy bits of British Common Law that still float around like landmines in American real property law might apply, but the 1st Amendment don't.

Bloomberg made another statement, probably by accident, that gets to the core of the problem:

The mayor, at his news conference, read a statement he had issued around 6 a.m. explaining the reasoning behind the sweep. “The law that created Zuccotti Park required that it be open for the public to enjoy for passive recreation 24 hours a day,” the mayor said in the statement. “Ever since the occupation began, that law has not been complied with” because the protesters had taken over the park, “making it unavailable to anyone else.”

Zuccotti Park

What law could possibly be in effect to force a private property owner to make their property available for any delinquent or Nazi who wants to hang out there?  Sounds like some sort of Socialism from on high, which it is.  It is called "Privately Owned Public Space" which is a short name for an element of National Socialism where private property owners are forced to provide services that the government would/should provide if the government would just buy property for public use.

The 1961 Zoning Resolution inaugurated the incentive zoning program in New York City. The program encouraged private developers to provide spaces for the public within or outside their buildings by allowing them greater density in certain high-density districts. Since its inception, the program has produced more than 3.5 million square feet of public space in exchange for additional building area or other considerations such as relief from certain height and setback restrictions.

Of course, a heavy helping of rent-seeking is at play for owners of enough property to make some "public space" in return for privileged zoning rules just for them.

Here is a thought: if government wants public parks, let them buy the land on the free market (or use donated land) and build them, taking public responsibility for them, and let the private property owners do what they will with their own property?  Of course, that is too simple.

Steve Jobs Has Died

I was never a big fan of Jobs, mostly because I was never a big fan of his expensive products.  Perhaps if I were more of a graphic artist I would appreciate them, and the price tag more.  Don't get me wrong, I loved using them when someone else was buying them, like my employer or school.  When it came down to outfitting my home and office, I always bought Toshiba.  It is all about the price/utility tradeoff.  I do use an iPhone and complaints about it could fill another post.

Part of my attitude was influenced by Steve Wozniak, who never spoke ill of Jobs, I just did not like how he described the way Jobs behaved.  I am a big fan of Woz and have met him in person, for a couple of hours.  It was more of a valued opinion sort of thing.  Woz can say anything and I tend to believe it.

Perhaps it was my lack of knowledge about how he ran Apple.  I never studied it, never went out of my way anyway.  I appreciate him more now that I know he really ran Apple computer.  From what I thought I knew in the past, I had the impression that Jobs kept wrecking the company and everybody else around him shored it up.  Not true, not even close.  However, when the press begins heaping praise on Jobs for inventions and engineering, because that was Woz, not Jobs.

I see that there are already comparison wars erupting, comparing Jobs to Edison.  Jobs was no Edison, he was no Wozniak either.  He was a fantastic marketer and knew good ways to package products.

Rush Limbaugh was always touting Apple products, reportedly without any compensation, just because he liked their stuff.  Perhaps if I were not as frugal as I am on certain things, I would be in the same Apple camp as Rush.  His show tomorrow should be interesting.

What does this have to do with How Many Borders Would You Like With That Socialism?  Nothing really.  Not much, really.  I recall in the 1980s(?) Jobs did a big computer "giveaway" to any schools that wanted to buy Apple products at cost.  As I recall, it was an effort to keep the company open during an economic slump.  This deserves more research and could be relevant to my current project.  It was like a reverse of rent-seeking, with Apple marketing and selling to government without seeking a government enforced monopoly.

On the surface, it is similar to the story of tobacco companies giving cigarettes to the US government for Soldiers in WWI.  I am still researching that one, but the story goes on that the returning Soldiers, of all walks of life, retained the habit and introduced cigarette smoking to sectors of society that had shunned the habit in the past.

The Apple giveaway, from memory, placed Apple computers as the introductory platform for school children of all ages for decades.  In college, it was my preferred platform and where I learned to use MS Word and Excel when MS Windows was not yet ready for prime time.  As this group grew older, a significant portion of them continued to purchase and use Apple products.  IIRC, the recent boom in Apple sales did not start until they began producing non-computer products, like the iPod and iPhone.

One of the critical mistakes they made in the early days of Apple was their insistence on making the Apple Graphic User Interface operating system incompatible with other platforms.  Unix, then Microsoft owned the government and business markets.  Apple acted like their hardware platform was superior and it would become obvious to everybody "any day now."  That event never happened and Microsoft expanded their rule over the non-academic computing market.

Eventually Apple did make their computing platforms compatible with Microsoft, but it was too little, too late.  Even today, non-Apple users cite Apple incompatibility with their favorite programs, which has been false for over a decade.

I need to do more research into the Apple federal lobbying efforts over the years.  Apparently, they never lobbied to get their platforms into the federal government.  If they did, it was a colossal waste of money, however I have never heard a hint of that.  Microsoft had problems because they began, and won, the business and government desktop war on the coattails of IBM.  They retain that position today, after being bullied by the federal court system into playing the crony capitalism game and positioning lobbyists to shower money on government officials in DC.

In retrospect, Steve Jobs is more of a great marketer to the masses, rather than a technological innovator, who knew what people wanted before they did, a little more like George Gilder.