This excerpt taken from the GMCR 10-K filed Dec 14, 2006.
Because Green Mountain Coffee relies heavily on common carriers to deliver our coffee and brewers any disruption in their services or increase in shipping costs could adversely affect our business.
Green Mountain Coffee relies on a number of common carriers to deliver coffee and brewers to our customers and distribution centers. We have no control over these common carriers and the services provided by them may be interrupted as a result of labor shortages, contract disputes or other factors. If we experience an interruption in these services, we may be unable to ship our coffee and brewers in a timely manner. A delay in shipping could:
Any significant increase in shipping costs could lower our profit margins or force us to raise prices, which could cause the Companys revenue and profits to suffer.
Because a substantial portion of our business is based in New England, a worsening of the regional New England economy, a decrease in consumer spending or a change in the competitive conditions in this market could substantially decrease Green Mountain Coffees revenue and could adversely impact our ability to implement our business strategy.
Coffee pounds shipped to customers in New England accounted for 45% of our total pounds shipped by GMCR in fiscal 2006. We expect that our New England operations will continue to generate a substantial portion of our revenue. In addition, our market share and visibility in New England provides us with a means for increasing brand awareness, building customer loyalty and strengthening our premium specialty coffee brand. As a result, an economic downturn or other decrease in consumer spending in New England may not only lead to a substantial decrease in revenue, but may also adversely impact our ability to market our brand, build customer loyalty, or otherwise implement our business strategy and further diversify the geographical concentration of our operations.