Fair Trade Coffee: the tortuous trajectory of an EIG stock investment

How Green Mountain Coffee Roasters went from EIG darling and super-performer to that pariah of environmentalists – producer of non-recyclable, non-compostable single-cup coffee pods (dramatized in the spoof sci-fi horror video Kill the K-Cup).  And how the story has taken a positive turn once again, albeit with public investment now precluded…


Green Mountain Coffee Roasters was a small Vermont coffee roaster, specializing in fair trade coffee, when it was approved for investment by EIG members in November 2003 and purchased a few months later.  In the 7 years following our initial purchase, its fortunes rose and we ultimately made a profit of almost US$27,000 (C$30,000) on it.  However, along with its growth came a change in business direction that EIG members were less happy about. Green Mountain acquired Keurig, producer of non-recyclable, non-compostable single-cup coffee pods, and increasingly its revenues came from this side of the business. The last straw was the announcement of an investigation by the US Securities and Exchange Commission (SEC) into accounting irregularities.  EIG’s Equities Trading Committee (ETC) sold off our entire holdings in October 2010.

But the story wasn’t over yet.  An internal investigation revealed accounting errors but no evidence of fraud.  The errors were corrected in a restatement of financials and the SEC did not pursue, indicating that it considered the company in the clear.  Green Mountain’s fortunes began to rise again, to the point where the ETC decided to go back to EIG members for a vote on potentially re-investing in the stock, given its strong environmental record in other areas and its continuing support of fair trade coffee.

However, the re-investment proposal was nixed and Keurig Green Mountain, as it is now called, was ultimately bought out by a private equity firm.  Since it’s no longer publicly traded, EIG’s interest in it is now only academic.  Nevertheless, it’s interesting to note the latest development….

Keurig is now offering recyclable K-cup pods and claims that 100% of its pods will be recyclable by the end of 2018.

Good news!