Green Mountain Coffee
Green Mountain Coffee
Paying for Nothing. Literally
Monday, 5 March, 2012
I wasn’t initially angry with this purchase today, as a matter of fact I was thrilled. For a number of years I have loved our Keurig single cup serving machine and the width and depth of coffee selections that are available. And today, Starbucks finally had their K-cup available for sale in Canada (Caffe Verona, if you are interested) at the local Costco. My neighbour picked up a box for me and dropped it off, not long afterwards I ripped it open to give it a try.
Here is what I saw:
For over 13 years I worked with a company that was absolutely fanatical about finding efficiencies in the supply chain; they basically invented flat pack packaging and for the past five years there as an even greater push for efficiencies in how stock was packaged and shipped around the globe.
Air, space, expanse; whatever you want to call it there was lots of it. I initially estimated that about half the box was actually empty. I was amazed that a company this big would allow something like this.
No big deal, I was a little shocked that they would ‘overpackage’ so much but my main focus was tasting the coffee. Later on it dawned on me; I paid for all that ‘air’ and that’s what really annoyed me. The extra cardboard, the extra fuel, the extra ink, the extra pallets, you get the picture. I/we/you paid for it, above and beyond the price of the coffee itself.
Anyway you have to remember, I spent years working for a company that despised this type of waste; and for good reason. It makes no business sense to ship empty space! It’s a waste of resources, it’s not environmentally friendly, and above all hurts the bottom line.
It was really bothering me, (maybe it was the extra caffeine boost from the coffee) so I did a test to see how many k-cups I could squeeze into the box stacking them neatly instead of ‘messy’. I stacked six rows of three, three pieces high. As it turns out, half the box (by volume) is empty and therefore in my mind wasted space. Green Mountain could either ship 108 per box (but at much higher price point) or reduce the size of the box by half. (Those of you with sharp eyes will notice that 3 are missing. I drank them...)
Naturally this would require some changes to the packaging line, such as a different sized box, and some kind of stacking machine, (or person, but I would really hate that job, it’s hard to keep them standing up...) but instead of a pallet holding 100 boxes (my best estimate) it could potentially hold 200. Transport costs per box would be cut in half, more stock would be available for customers, and there would be less refilling costs for the retailer, to mention just a few benefits. I don’t know if every “super pack” of k-cups from Green Mountain to Costco is packaged this way, but the savings could be substantial. Without knowing how many are sold and shipped around North America I wouldn’t hazard a guess, but from my own experience there is certainly a ton of unrealized potential (aka profit) sitting out there for GMCR...
And how was the coffee you ask? It was great, you have to enjoy strong coffee but it was just like a cup from the store for only $0.70 a serving. I just don’t know if I will enjoy paying for the empty space again...