by Tim McQuiston, Vermont Business Magazine As the story goes, and how legend now has it, Bob Stiller was enjoying a cup of coffee after coming off the slopes at Sugarbush in 1981 when he had a "eureka" moment. The coffee was so good he decided to buy the company. He recently had sold his rolling paper business and had money. The coffee company, of course, became Green Mountain Coffee Roasters based in Waterbury. It is the state's largest business, with a market cap of $12.07 billion and annual revenues near $4 billion. And Stiller's story with it has now come full circle. Yesterday he stepped down from the board, the final shoe to drop in what has been a tumultuous 18 months for both him and GMCR.
A Q&A VBM did with Stiller from January 2002 is below.
Robert Stiller, far right, and family. Courtesy Stiller Family Foundation.
Green Mountain Coffee Roasters, Inc (NASDAQ: GMCR) announced June 19 that Stiller and former CEO Lawrence Blanford had retired from the board and that three new directors had been appointed: John D Hayes, Executive Vice President and Chief Marketing Officer of American Express; Susan Saltzbart Kilsby, Senior Advisor to Credit Suisse AG; and Robert A Steele, former Vice Chairman, Healthcare Strategy for The Proctor & Gamble Company. Stiller now becomes Chairman Emeritus following his retirement.
In a statement, GMCR’s Chairman of the Board of Directors Norm Wesley said, ‘John, Susan and Rob are terrific individual leaders with prestigious careers and significant global experience. Each will be a tremendous asset to GMCR as we continue to drive single-serve beverage category expansion and pursue growth opportunities leveraging the strength of our Keurig ® brewing technology.’
Wesley continued, ‘Bob Stiller’s vision for GMCR has been unwavering and as a result of his foresight, GMCR experienced unprecedented growth as it successfully transitioned from a regionally recognized specialty coffee roaster to a leader in the emerging single-serve beverage category in North America. On behalf of many GMCR stakeholders, including our Board and our executive leadership and all our employees, we express our gratitude to Bob and we are very pleased that he will assume the newly created role of Chairman Emeritus.’
Stiller stated, ‘I believe the time is right to retire from the Board and pursue a variety of personal interests. I am confident that GMCR’s culture of innovation, the breadth and depth of our Board and leadership team, the determination of our employees and the incredible consumer enthusiasm for our brands will continue to drive value for all GMCR stakeholders. It has been the highlight of my business career to serve GMCR and I am enthusiastic to continue to do so in this new role.’
And perhaps Stiller should be confident of the company's future as it stock surges beyond what anyone would have thought reasonable just a year ago. It was trading over $80 as of the close of business June 19, but it was only last July that the stock had plummeted to $17.11, less than a year after it had been over $100 per share.
Between September 2011 and July 2012, the stock cratered twice, once in November 2011 after a Wall Street "short" investor said the company was over-valued. David Einhorn of hedge fund Greenlight Capital said, among other things, that GMCR had corporate governance problems and, more importantly, that the company would lose its Keurig single-cup brewer patents in September 2012, which would subject GMCR to low -cost competition and a loss of market share. The stock also fell after release GMCR's second quarter financial report in May 2012, in which neither revenue nor earnings met analyst expectations.
The second quarter report was particularly damaging to Stiller. He had used his prodigious holdings in the company as collateral against what turned out to be bad investments, including in donut maker Krispy Kreme. In a margin call, Stiller was forced to sell 5 million shares worth $125 million in GMCR stock, which contributed to the fall in stock price.
Stiller, who was board chairman at the time, was removed as chairman less than a week after the Q2 report came out and another board member, William Davis, was forced to step down for also using the stock to cover outside investments and having to sell millions of shares at such a critical moment in the company's history (Davis sold 608,000 shares in May 2012).
Stiller was kept on the board at a lower level. And then things got better.
GMCR weathered the uncertainty of the loss of the Keurig patents; the company continued to grow in both revenues and profits; it signed another big agreement with sometimes-bitter rival Starbucks; its presence in the single-cup market expanded not contracted; it found a new CEO from Coca Cola before the end of 2012; and now is a Wall Street darling, again.
As of March 2013, Stiller still owned 8.3 million shares, which at $80 per share would be valued at about $664 million.
GMCR President and CEO, Brian P. Kelley said, ‘GMCR has a bright future with growth opportunities in new channels and with new brewer technologies that take the power of Keurig ® to new beverages in large part thanks to the solid foundation and building blocks that Larry Blanford and the GMCR team put in place. Personally, I am grateful for Larry’s guidance during my initial days as GMCR’s CEO and on behalf of the Board, our employees, partners, customers and many other GMCR stakeholders, I thank him for his unwavering dedication to the Company.’
Steele’s appointment is effective June 20, 2013 and Hayes and Kilsby’s appointments will be effective July 1, 2013. Stiller’s retirement was effective June 19, 2013. Blanford’s retirement will be effective June 21, 2013. Upon Hayes and Kilsby’s appointments, GMCR’s Board of Directors will consist of 11 members, 10 of whom are independent.
In connection with Stiller’s retirement, Stiller and the Company entered into a letter agreement, dated June 19, 2013, pursuant to which Stiller will make himself available for a period of one year following his retirement to provide advisory services and general advice to GMCR relating to its corporate social responsibility mission and business innovation strategy. Similarly, in connection with Mr. Blanford’s retirement, Blanford and the Company entered into a letter agreement, dated June 19, 2013, pursuant to which Blanford will make himself available until December 31, 2013 to provide general advisory services to GMCR.
John D. Hayes , 58, has been Executive Vice President since May 1995 and Chief Marketing Officer of American Express since August 2003. Prior to joining American Express, Hayes spent over 20 years in the brand and advertising industry. He was President of Lowe & Partners and worked with clients including The Coca-Cola Company. He also has held senior positions at Geer DuBois Inc., Ammirati & Puris and Saatchi & Saatchi Compton. In addition, he has led the development of product position and global campaigns for Citibank, Aetna , Proctor and Gamble, Prudential Insurance, RJR Nabisco, Mercedes-Benz and Reebok.
Mr. Hayes is a Member of the Board of Yahoo! Inc., Board of Trustees of Save the Children and Board of Regents Seton Hall University. He was a previous Board Member of Fairfield Communities Inc., the Association of National Advertisers and The Tiger Woods Foundation. He received a B.A. in Communications from Seton Hall University.
Susan Saltzbart Kilsby , 54, has served as a part-time Senior Advisor to Credit Suisse Group AG since 2009. During her more than 30 years at Credit Suisse, she served as Chairman of Mergers and Acquisitions, EMEA and Vice Chairman of the European Investment Banking Committee, and also led the European Consumer, Retail & Services Investment Banking Group. Her career in global investment banking also includes senior positions with Barclays de Zoete Wedd, Bankers Trust and The First Boston Corporation.
Ms. Kilsby is currently a Member of the Boards of BBA Aviation PLC, Coca-Cola HBC AG and Shire PLC. She serves as the International Regional Chair of the Committee of 200 and was a founding Member of the Competitor Diversity Forum. She is a Visiting Fellow of the Cass Business School and is Chariman of the M+A Research Centre at Cass. Ms. Kilsby also serves on the Advisory Board of the Yale School of Management and is a Member of the Business Leadership Council of Wellesley College. She previously served on the Board of Directors of L’Occitane S.A. She holds a B.A. in Economics from Wellesley College and an M.B.A. from the Yale School of Management.
Robert A. Steele , 57, is the former Vice Chairman, Healthcare Strategy for The Proctor & Gamble Company. In his 35 years at the company he held several leadership positions including Vice Chairman, Global Health and Well-Being, with responsibility for oral care, feminine care, personal health care, pet care and snack brands; Group President, Household Care; Group President, North America; President, North America; and Vice President, North American Market Development Organization. He began his career in sales before moving to brand management.
Mr. Steele is a Member of the Board of Directors of Beam, Inc. and is an Adviser to CVC Capital Partners Ltd. He previously served on the Board of Directors of the Kellogg Company. He holds a B.A. from College of Wooster and an M.B.A. from Cleveland State University.
Lawrence J. Blanford , 59, served as GMCR’s President, Chief Executive Officer of the Company from May 2007 to December 2012, and will serve as Director until June 21, 2013. Mr. Blanford previously was Chief Executive Officer at Royal Group Technologies Ltd., and President of Strategic Value Consulting, LLC, a consultancy firm. His prior experience included various management positions with Royal Philips Electronics (North America), Maytag Corporation, Johns Manville Corporation, PPG Industries and The Procter & Gamble Company. Mr. Blanford is a member of the Board of Directors of Steelcase Inc . He holds a B.S. degree in Chemical Engineering from the University of Cincinnati and an MBA from Xavier University in Cincinnati.
Robert P. Stiller , 69, founded GMCR in 1981 and served as its President and Chief Executive Officer through May of 2007. He also served as Chairman of the Board from May 2007 through May 2012 and as a Director until June 19, 2013.
Q&A: Robert Stiller
Published by Vermont Business Magazine: January 1, 2002
Robert Stiller, the founder and CEO of Green Mountain Coffee Roasters, has created a reputation as a man with a considerable knack for innovation. From ideas on how to improve his father’s electric stove heating coil manufacturing process when he was in high school, to ways to improve his cigarette rolling paper business in the 1970s, to how to make gourmet coffee an experience you could enjoy at the local gas station, Stiller’s ideas have often paid off big time. In October, Forbes magazine named the 58-year-old Stiller their Entrepreneur of the Year, complete with cover photo and a full page inside photo of still meditating on a pallet of coffee bean bags to illustrate his unusual approach to business. During the interview he joked that he was a little worried that he would be on the Forbes’ cover.
He shouldn’t have been too concerned though, and for good reason. His often spiritual approach to business may be unusual, but it’s certainly been successful. According to Forbes, Stiller made over $3 million when he sold his first company in 1980, and earnings on GMCR have jumped an average of 24 percent a year for the past five years, earnings per share have grown at 43 percent, and the company is ranked 16th on Forbes 200 Best Small Companies. Stiller’s 48.5 percent share of his company is worth an estimated $89 million.
A year ago GMCR signed a five-year contract with ExxonMobil to supply some 1,600 convenience stores, guaranteeing the company’s dominance in this facet of the industry for some years to come. They beat out 11 other coffee companies to seal the deal.
Stiller lives in Burlington with his wife, daughter and two sons. While enjoying a delicious cup of freshly brewed Colombian coffee, Robert Smith interviewed Stiller at the company offices in downtown Waterbury, which are located over by the town liquor store and across the street from the fire station, just a few miles from the manufacturing and shipping plants.
VBM:How you ended up here in Vermont with a gourmet coffee company is a rather unique story. Could you fill us in? Did you bring the idea to Vermont or come up with it here?
Stiller: Well, I had sold another business in 1980.
VBM: Which business was that?
Stiller: E-Z Wider, the cigarette paper company. So I was looking for something to invest in. I used to come up to Vermont to ski, had been coming up here for years. So when I sold the business I was spending more time here.
I wasn’t really much of a coffee drinker at the time, but I had this great cup of coffee in a restaurant. I got to know the owners of the shop that had just opened in Waitsfield. I used to play racquetball with them. They wanted to expand their business, and to me it was a great concept. Like I said, I wasn’t much of a coffee drinker, but this was such a different beverage it was like day and night. It was good coffee, and so much better than the quality of coffee people were used to, especially 20 years ago. The quality of coffee has improved considerably since then.
So I formed another company to expand that concept, though I wasn’t planning on becoming as active as I eventually became. I brought in another person to run it, and we lost a fair amount of money over the first couple of years. I bought one of the partners out, another had an opportunity to move to Florida, and I ended up owning 100 percent of the business. I spent a lot of time getting things on track.
VBM: This business started in 1981, and you took over running it when?
Stiller: After about three years, and I’d say that we’d lost over $1 million in those three years. I turned the company around and grew the business steadily and profitably until 1993, when we went public. We had five retail stores at the time I went public. We’d invested in the plant, we advertised for mail-order. We really tried to shift our growth.
You were interested in why we went public and it was basically because Starbucks was growing quickly and we saw other coffee companies growing quickly and we felt we had to shift our growth rate if we were going to maintain our presence in the marketplace.
They were more focused in the retail area. We did open up a number of retail shops after we went public. But the retail space was really hard to come by and it was such a different part of the business that we eventually sold off our retail stores in 1998 to just focus on the wholesale business. We were much more successful at helping other companies present great coffee.
We work with a very broad, diverse customer base from the finest restaurants to convenience stores and supermarkets. Planes, boats, trains! It’s much more than just supplying coffee, it’s really supplying the program, the training. Getting the staff at these locations to care about the product and present coffee right. Because if it’s not brewed right it can be ruined, and if it stays on the burner it can be ruined.
So it’s a lot more than just good coffee, but there is a lot of service and support that goes on behind the scenes to make good coffee. We are one of the leaders, if not the leader, in the country in doing that.
VBM: The machine that brewed this cup of your coffee, Keurig, do you find that is catching on? (The machine brews a fresh cup in seconds using pressurized hot water and a small, sealed cup of GMCR coffee.)
Stiller: They’ve sold around 20,000 machines in the last couple of years, and we sell a million of those cups a month, I believe.
VBM: GMCR had $84 million in total sales for the 2000 fiscal year, do you have the figures for 2001?
Stiller: In 2001 we had $95,576,000 in sales.
VBM: What do you see as far as immediate plans for the company, and what do you see five and 10 years down the road?
Stiller: Well, in our last conference call we threw out that we could be at the billion dollar mark in sales 11 or 12 years from now if we maintain our growth. It was an optimistic, aggressive forecast, but it’s not ridiculous. The potential is there for someone to capture a significant part of the coffee market by providing the best coffees available. We’re partnering with a lot of farmers in the coffee producing countries, so we have great relationships. They’re producing superior product and value for us because of that relationship.
Coffee prices are much lower today than the cost of production, so they had cut a lot of corners in the production so that the quality of the coffee wasn’t there. We have begun to partner with a number of farms for multiple years to produce coffee with certain quality standards. So now they know that they can put the work in and have someone to sell it to. That will be a problem going forward for companies that haven’t done that.
We’re grateful to be at a size where we can do that. We sell a lot of fair trade coffee, which guarantees a minimum price to the farmer. They work together in a co-op and sell coffee direct, which is wonderful. We sell more organic and fair trade coffee than probably any company in the United States.
VBM: I’m familiar with Equal Exchange, the coffee company. They spoke recently in Brattleboro at the Vermont Businesses for Social Responsibility conference, and they were talking about fair trade coffee.
Stiller: That’s all they sell. We feel that we have to offer a variety of coffees for the consumer and let them choose. I’d certainly love to educate people on the importance of fair trade because it’s so significant.
Coffee is the second largest commodity in the world. Oil is number one and coffee is number two. But unlike oil, coffee is a product of the people. There are 25 million people involved in coffee production, and 75 percent of them are small farmers, and they need to live. If they can’t grow coffee, what are they going to grow?
Stiller: In some cases, yes. And then we’re willing to spend billions fighting the drug trade. As far as the stability of governments go, people are not happy if they can’t earn a livable wage, and then they want a better system of government and then there’s complete unrest. Coffee could really provide stability in the world if these people can have the economic substance to live. It changes the globe. There are some people who feel that you could really change the world through coffee because it is the only product that reaches so many people in so many lands.
VBM: Expound on that some more.
Stiller: It’s a big thing for us. We started doing this at least 10 years ago, trying to improve our sustainability when it comes to coffee. When fair trade certification came along, all of our organic farms that we were dealing with were certified as fair trade as they already met those standards.
VBM: Where are these farms located?
Stiller: Mexico, Sumatra, Peru, Columbia, Costa Rica. We look upon it as good business, because if you don’t have great product and you don’t have the relationships with your growers, where are you? The whole fair trade idea was started with funding from the Ford Foundation. They funded TransFair, which is the certifying organization. The Ford Foundation really funded that to promote more democracy in the world. If there is financial stability, then there is a more stable government. A lot of people don’t realize that. They think: "Fair trade, great, the farmer gets more money. So what?" But the ramifications are very far reaching.
We started an organic co-op in Sumatra three years ago with $15,000 in start up capital to another firm that’s in the Brattleboro area, ForestTrade. It’s a fascinating story because they really did this. I think they were able to raise $700,000 or $800,000 to get this co-op thing going, and it was the most successful intervention they’ve ever done in Indonesia. The director went back to Jakarta and did another one.
What was fascinating was that this was a really diverse cultural and economic group doing this. But because they had a common interest together, they worked together to help each other grow coffee. When all the fighting was happening there, this area was insulated from all those uprisings, because the people there had a job and they had money and they were OK. It really shows the impact of a program like that.
VBM: One of the things I’ve seen is that a company’s reputation for social responsibility is becoming increasingly important. Have you found that is true for GMCR?
Stiller: I think it has helped us, and in ways that a lot of people don’t realize. Everybody looks at the socially responsible sort of things as a marketing positioning, where I think it is much more impactful to a business from a motivational point of view and from a good business point of view.
A lot of workers will go much further to make a difference in the world as opposed to just making a company profitable. And they understand that they are not going to make a difference in the world if the company is not profitable.
They will feel so much better about themselves, be much more motivated, and I think the organization will have a lot more energy to be successful. If your employees focus their environmental/social issues along their supply chain or selling chain, and it is impactful in those areas, they’ll only help the business do better. It’s not like we just get a lot of money and at the end of the year we give it out haphazardly.
We help the farmers grow better coffee, we help the local environment which also helps our product. We help the community. If we have a stronger community with more services it will help our employees as well as others. We’ve given out coffee for various causes. We have to go out and buy that coffee, but people get to sample our product and we build relationships that way. It’s a very synergistic type of relationship, it’s not haphazard.
A lot of these larger organizations are thinking: "How can we cut employees or how can we cut benefits?" It’s like them against the employees, as opposed to really supporting their workers. The biggest asset of any company is its employees. Why the hell wouldn’t you do everything you could to make their work situation better and support them in life?
VBM: What is the size of your company now? How many employees?
Stiller: We have a little over 500.
VBM: But that’s not all in Vermont?
Stiller: No, we have about 350 in Vermont.
VBM: So your headquarters and roasting facilities are here in Waterbury?
Stiller: Our roasting, packing and warehousing are here. We have about 110,000 square feet here now. We have about five buildings here and we have five other regional warehouses in Maine, Massachusetts, Connecticut, New York and Florida, so that we can distribute to and support our customers. We call those regional operations centers where we do delivery to about half of our customers directly. We try to make the coffee conveniently available to our consumers. At the end of the day it is the consumer who drinks our coffee, and for that consumer to have it available wherever they would like it is our goal.
A lot of organizations will just focus on one or two channels, whereas we will be in the offices, the community stores, the restaurants, the supermarkets. If you like our product, we’ll have it available for you.
VBM: And you have a mail order part of the business?
Stiller: Yes, and a website.
VBM: How big is the mail order portion?
Stiller: It’s around three or four million. Not a huge percentage, but a percentage that we will look to grow over the next year. We’ve made some investment in the computer area that we’ve been waiting for, and now we’ll be able to expand our mail-order business.
VBM: Do you feel that the Internet has been important for your growth and success?
Stiller: No. I think it will be more so, and it has been successful for what it is, but it has been such a small percentage of our overall business. I believe though, that it will grow because it is a very convenient way to order coffee. And we can offer other products that are specialized, but that might not be supported through other channels because there’s not that much demand. We can provide a lot of brewing and coffee information on the web that you might not be able to get from other sources. So I think it has a very valuable place. But in the grand scheme of things the company is successful because of what we’ve done in other areas.
I really feel that, as good as our coffee is, the key to our success is our ability to execute. A lot of other companies can copy what we do, but our ability to work together as a team to do what we’ve got to do really sets us apart in the marketplace. Other companies can promise that they can do this and that for you, but when we promise something, we really try to do better than we’ve promised.
VBM: Has that been easier to do or harder to do as you’ve grown?
Stiller: I think we go through both stages. Right now it’s somewhat easier because of understanding the dynamic and the process of how it’s done. It’s really empowering the people and giving them the tools to make it happen. I think we have a very engaged and involved workforce that is interested in where we are going and what we are doing. We’ve developed an ESOP program over the last few years so that the company is becoming more employee owned, even though it’s a small percentage. We’ve given stock to employees and options. We’re very involved with them.
VBM: Are you involved in an expansion right now?
Stiller: Yes. We’ve added some storage place to the plants.
VBM: Is that completed?
Stiller: No. The exterior is done. We’ve been able to get our hands on a couple of large roasters that we’re setting up right now. We got them from another company in Boston that had to move because of the Big Dig there. We had to increase the plant size to get them, but it will shift our roasting capacity to about 40 million pounds a year, and we’re at about 16 or 17 million right now.
VBM: So this will more than double your capacity?
Stiller: Oh yes. These things are huge, And not only are they big, but the technology is really superior. You can customize your roasting profile to exactly where you need it. It is a much more sophisticated machine to bring out the coffee flavor during the roasting process.
VBM: Will you increase employees as well when the expansion is completed?
Stiller: Not in any huge way.
VBM: So doubling capacity is not going to mean doubling employees?
Stiller: No. Our growth is steady and we hire accordingly.
VBM: For a worker here do you feel you pay average or above average wages for the area?
Stiller: I don’t have a clue. I think we’ve tried to pay a little above average wages, but our benefits are way, way above what a typical benefit’s program is. Probably in the top 98th percent. Then we try to give employees options to share in the appreciation of the value of the company, so it might be stock appreciation as opposed to high wages.
But I can tell you that we’re known as a good place to work. I know a lot of people who have joined the organization, and then will get their brother or their spouse to join. Everybody is very excited to be here. We have a new employee tour every couple of weeks, and somebody I knew who worked in the post office here for years was in the tour a couple of weeks ago as she’d just started working here. Her husband and sister had worked here for years.
VBM: What do you offer as products?
Stiller: Well, we’re about 85 percent or more coffee. Our business is coffee. We provide a full range of full coffee flavors. We have dark roast, light roast, mixed roast, different types of decaf, fair trade, organic, what we feel are the better flavored coffees ‘the whole spectrum of what’s available out there.
Coffee is a very personal type of experience. There is no "best." What is best is what you like, and we really help people find that and enjoy it. Other coffee companies, like Starbucks, have mostly dark roasts, they don’t have flavored or other types. Like Equal Exchange will have fair trade coffee, but that’s it. We really try to offer everything that’s available out there.
Then we have other products that enhance the coffee experience like mugs or coffee makers, but it’s a small percentage of what we do. Our focus is the coffee. If we can enhance that with other products, we’ll do that. Like in the convenience stores we have hot chocolate and a frozen product so that the store can deal with us from a beverage point of view and they don’t have to go to several different people to get stuff. They can get sugar, cups, stirrers from us so that we can be more of a one stop shop and make that relationship with the customer just that much more effective.
VBM: Do you see the recession or the events of September 11 affecting your business?
Stiller: I don’t feel it is in a significant way at all. Certainly what has happened in New York City was devastating, and we had offices affected. But in the grand scheme of the economy, people are going to drink coffee. We might see a decline in the office coffee segment, but at the same time see an increase in the supermarket coffee segment.
The coffee experience and caffeine is supposed to be energizing, but I think it is also a very relaxing and didactic type of experience, and I think people might spend more time looking for solutions, planning and reflecting on things over a cup of coffee in more difficult times.
You might also have a cup of coffee to keep things going. It’s a nice ritual. I think better coffees are certainly more expensive, yet it’s relatively very inexpensive. To be able to have the best for that amount of money is another pleasure one can savor and enjoy. In the grand scheme of things, we’re much, much more recession-proof than a lot of other businesses.
VBM: Can you explain what the Exxon/Mobil contract is, how you received it, and what it means to your company?
Stiller: I think our first Mobil customer was about 10 years ago. One of our sales people was trying to get one of the convenience stores in Maine, and the customer said if you feel you can increase sales, go ahead. I think that first store was across the street from Dunkin’ Donuts. We increased his sales there, and in all his stores, at least four or five times what they were.
That got us recognition from the local Mobil representative. They could see that quality products in the store could bring in more customers to the station. They want to sell gas, and if they can sell other things there that bring in more people, they can sell more gas, and if they can sell more gas they can sell it cheaper and bring in more people. It all goes into making the station a destination place, so they wanted to have the best products.
A nice store with good service is a place people will go to get their coffee. Mobil actually built a unit in a warehouse and tested us against every other coffee. They wanted the best and they found that we did better than the other coffee companies and supported them better. We got the contract up here, then in Florida, Arizona , California ‘we jumped around the country with them.
When Mobil was acquired with the Exxon deal we were very concerned because Exxon had also developed their specialty program and usually the acquirer can just do things as they want, whether it’s the best way or not. You hear these horrific stories. But our program was just so much more successful than theirs that they stuck with it. It’s based on results and consumer appreciation of the product. It’s very important to us, because the more people that see our product and drink it and develop that taste for it and like it, well that’s our advertising.
The Maxwell House coffees of the world just go into a supermarket and advertise and advertise. Everything that can be said about coffee has been said. But at the end of the day, it boils down to what does it taste like? If we can match you with what you like and help you have that great coffee experience, well that’s where it’s at. No advertising can do that. You’ve got to sample the product, which is really the most effective advertising.
So we’ve always been out there. Cup business creates the brand because people can see what it tastes like. Maxwell House says it has the finest gourmet beans, and they go out and pick them and they do this and this and this ‘and there are some people who love it because that’s all they’re used to. But I really feel that if people would explore the possibilities with better coffee, that we would get them.
VBM: How do you feel about operating here in Vermont? Do you think your association with the Green Mountains and the Vermont name helps your product? I know Vermont is trying to market the idea of the quality of the state.
Stiller: I think that when people know Vermont, it works. From the New England states Vermont does have the best image as far as work quality and ethics. But how far away does that work? It certainly has helped us in the New England area. But I remember we did some research years ago in Boston, some focus groups, about whether we should call ourselves Green Mountain Coffee, Green Mountain Coffee Roasters, whatever, and what should the name mean and so forth. I was shocked that people didn’t know where the Green Mountains were. They didn’t know they we’re in Vermont, and these were upscale consumers.
But the name Green Mountain brings up some nice imagery. It’s an image of purity and integrity, and even aside from Vermont it’s a great name. And when people know Vermont, there’s an even better connection.
VBM: Do you feel that the business environment and state government here in Vermont has been helpful to you? Could they do better?
Stiller: From the state point of view they’ve been very supportive to us. We’ve had interactions with a number of divisions over the years and I would say that everyone intends to work with you and it’s not an adversarial relationship. We’ve worked with VOSHA doing trainings with other companies around the state to explain the benefits of working with VOSHA. If you have fewer accidents in your company you’re going to make more money and you’re going to keep your insurance costs down. A lot of this stuff makes business sense.
In expanding and keeping us in the state, they have been very responsive over the years. Governor Dean has been just great. People here want to do a great job and the employee base is very good. You’re away from a huge choice in some of the more skilled areas. A lot of people don’t come up here to further their career, it’s more of a lifestyle and work balance issue. It’s a choice that we support because if you’re not balanced you’re not going to be happy. Your life has got to work for you, and your employment is a big part of that life. I think that we’ve done well with that.
VBM: The lack of skilled workers is listed by many as the number one problem with the Vermont labor force.
Stiller: But people here want to learn and grow, and we’ve seen a lot of participation in training programs here. What I would like to see more support from is the banking sector. When I was starting, that was the most difficult are to find help in. I eventually went to Boston. I did try to come back to Vermont banks once, but they just didn’t get it.
VBM: Are there other areas that you are concerned with?
Stiller: Not as far as the state is concerned. One of the things that I always try to get across to other business people is to involve their employees and workers in what they are doing. It’s a real partnership. If they take care of their people and work all together, the business is going to be a lot more successful. But that’s an area where a lot of companies try to cut corners.
Another area that I try to get into is a spiritual area, not in the sense of religion, but in the sense of one’s self, your intuitive self, who you are and being who you are. Just as that is true for the individual, it’s also true for the organization. For an organization to be all together and understand who everybody is, it becomes like a person and it’s a lot stronger that way. From an effectiveness point of view, to be more in touch with oneself is a more creative thing. It’s easy here because you can go out for a walk in the mountains, and being in touch with nature can be a spiritual experience. Meditation gets you to that same place as well.
We’ve often encouraged our people to explore those types of reality because it furthers their development and I think it adds to the success of people and the business.
VBM: I was deeply involved in a religion for about 35 years, and now I’m essentially an atheist. But while I’ve left the religion part behind in my life, the idea of spirituality, what you’re discussing, is still definitely a huge factor for me.
Stiller: You see that more and more today. I’m talking about that spirituality that’s common to all religions, how we are all connected. This is sort of an aside, but our perception of how we see things is our reality, and we only see what we want to see to reinforce our beliefs. There is a lot of interesting research that has dealt with that.
So for people to get in touch with that bias and then observe that, they’ll be less reactive and more able to make decisions based on what is actually going on. They’ll be able to understand what the dynamics are and chose to respond with a little more freewill.
VBM: That’s exactly my own experience with what was basically a fundamentalist religion. You were taught a conditioned response to see events in a certain way. But when you leave that behind you realize that so much of what you saw in the world was through the lens of what the religion told you to see and it’s not necessarily connected to reality.
Stiller: It’s the same with business. If you think it’s a lousy day, you’ll see things that will confirm that it’s a lousy day. If you’re going to a meeting and think - these meetings stink - you’ll make sure that that meeting stinks. You need to be aware that you’re creating that and then step forward to make it different. You need to really look forward to what you want to achieve. We will do different things to make things happen, and we’ll get into that loop. Gee, I want this so I’ll do that. It’s when you realize where you really want to be, what you want your life to be and have that imagery, then you can change that cycle for the better.
And you can apply a lot of these principles to business. We always try to start a meeting, even before we get to the agenda, by asking: "If this meeting meets everyone’s expectations, then what will it accomplish?" We create that vision first. Talk about where you want to go. Anytime you get together, talk about what is the ideal that you want to have happen. We call this appreciative inquiry. It keeps your attention going toward what you want to achieve. Appreciative inquiry is a way of bringing people together and focusing them on the positive, building on what works, and you can use it anywhere.
It’s true in any sport. You want to focus on what works, and you don’t keep thinking: "Well I don’t want to do this and I don’t want to do that." In golf, if you’re focusing on - "Oh, I don’t want to hit this shot into the woods!" - you usually end up hitting it into the woods. So you can create your reality by focusing on the positive and we try to build on what works in the organization. As opposed to focusing on "that doesn’t work or that doesn’t work," well, if it’s no good, what does it look like if it works well and how can we get there? Again, it’s creating that vision.
I’ve had employees interview all of their people, and often I have people interview those people they don’t know very well because it creates that community.
VBM: All here in the company?
Stiller: Yes. We always assume things, and then when you get to talk to someone you’re like, "Oh my god, you’ve got the same issues and concerns that I have." People don’t always realize that while we may be in the same place generally, we have had things happen to us that make us approach things differently, and we need to understand that and use it to our advantage. I truly believe that most people want to do things well and make a difference.
VBM: Do you have a spiritual practice of your own?
Stiller: I try to meditate twice a day, for maybe a half hour. I think there’s a balance between a contemplative practice and getting things done. It’s not a question of going off to meditate for weeks at a time, its also dealing with the day-to-day reality of things. I did have the experience of going off for a week and meditating with Deepak Chopra in a Seduction of the Spirit retreat. I pursued that and I’m an instructor of his Primordial Sound Meditation. But I haven’t really exposed my employees to that. Other trainings we have done here include the Silva Method. It takes only a few days, but it awakens people to their intuitiveness.
There’s a lot of stuff out there that I find fascinating. What is the nature of reality that makes a lot of this stuff work? Certainly after the week of meditation with Deepak Chopra, I was clearly in another place. There was like an instant connection, a compassion, with everyone. I think more and more people are tapping into this, which is good to see . I really feel it has a place in business, because it’s a real source of creativity.
VBM: I did have a final question. First, congratulations on being named Forbes’Entrepreneur of the Year. How has that impacted your life?
Stiller: Well, I’ve heard from a few people that I haven’t seen in years! But mainly it’s really given me the opportunity to speak more. I was invited to some commencements, and I also got invited out to speak at Case Western Reserve University in Cleveland which was an honor for me in particular, because that’s where David Cooperrider came from. He’s the main originator of appreciative inquiry, and I’ll probably be working with him to speak to more business people. So this type of recognition has helped open doors for me and I’d love to be able to speak more to the embracing of the social and environmental issues as a pathway to success and not an afterthought for when you get there. I’d also like to encourage more personal development and see people explore some of the meditative practices, be more mindful about who they are.
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Additional information from Green Mountain Coffee Roasters, Inc, June 20, 2013