GMCR: Green Mountain Coffee Roasters
Analysis and Audit Plan
University of Some State
Green Mountain Coffee Roasters has become a force to reckon with in the specialty coffee industry, with incredible growth in the last ten years, due in large part to its commitment to customers, employees, and social responsibility. This paper will concentrate on the financial records reviewed and will analyze (a) GMCR’s annual report and 10-K; (b) industry information, including key economic factors, life cycle, evaluation of factors for success, key business risks, accounting considerations, legal and regulatory concerns, and social concerns; (c) the company’s financial…show more content… (Form 10-K, 2009).
Industry Information Key economic factors Coffee consumption in the US and Europe equals approximately one-third of the tap water consumed annually, with annual production of approximately seven million tons estimated in 2010 (http://www.coffeefacts.com). Worldwide, nearly 25 million small producers derive their income from coffee; the economies of Africa, Indonesia, and South and Central America are especially dependent on coffee production. The majority of this production takes place in Brazil, where approximately five million people are involved in the cultivation and harvest of over 5 billion coffee plants without the aid of modern machinery. (Rice, 2003, p. 228). By 2003, the number of retail specialty coffee shops, cafes, kiosks, coffee carts, and roasters in the United States reached over 17,000, equating to nearly $9 billion in sales. According to the Specialty Coffee Association of America, 16 percent of adults in the United States drink coffee from one of these specialty outlets daily. (“Organo Gold”, 2008). The price of coffee is impacted by several factors. Meteorological events can affect the quality of a harvest or even wipe out entire plantations. The political and economic stability of the coffee-growing regions can have a profound effect on availability, and subsequently price per pound. Coffee is traded on the commodities exchanges