Green Mountain Coffee Roasters (GMCR)

Growth Strategy

In recent years, the primary growth in the coffee industry has come from the specialty coffee category, including demand for single-cup specialty coffee. This growth has been driven by the wider availability of high-quality

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coffee, the emergence of upscale coffee shops throughout the country, and the general level of consumer knowledge of, and appreciation for, coffee quality. The Company has been benefiting from the overall market trend plus what we believe to be carefully developed and distinctive advantages over our competitors.

Our coffee is available in many different distribution channels and customer categories, as best seen in our primary geographic market, the Eastern United States. This multi-channel strategy provides widespread exposure to the brand in a variety of settings, ease of access to the products, and many tasting opportunities for consumer trial. Our coffee is widely available throughout the day: at home in the morning, in hotels, travel destinations and entertainment venues, at convenience stores on the way to work, at the office, in restaurants, in supermarkets, and at home again at the end of the day. Our Company also participates in many special event activities, providing sampling opportunities and increased visibility for the brand.

We believe that consumer trial of our products in AFH venues such as convenience stores, foodservice establishments and office coffee services is a significant advantage and a key component of our growth strategy. As brand equity is built in AFH venues, expansion typically continues through customer channels such as supermarkets and specialty food stores which, in turn, sell our coffee to be consumed at home. This expansion process capitalizes upon this AFH / AH interrelationship. This strategy is designed to further increase our market share in geographic areas in which we already operate in order to increase sales density and drive operational and brand-equity efficiencies.

We are focused on building our brand and profitably growing our business. We believe we can continue to grow sales by increasing market share in existing markets, expanding into new geographic markets, expanding sales in high-growth market segments such as single-cup coffee and tea, and selectively pursuing other opportunities, including strategic acquisitions.

Our growth strategy for Keurig involves developing and managing marketing programs to sell as many brewers as possible to generate ongoing demand for K-Cups. In addition, we are focused on partnering with other gourmet coffee roasters and tea packers with strong national/regional brands to create additional K-Cup products that will generate further royalty income. When used with the Keurig brewers, K-Cups are designed to provide brewed coffee, tea and hot cocoa that consistently deliver the taste profiles specified by gourmet roasters and tea packers, which we believe creates attractive opportunities for our roaster partners to expand their geographical presence and take advantage of new market opportunities in both the AFH and AH single-cup markets with minimal investment. Only roasters licensed by the Company may benefit from Keurig’s technology and distribution network.

In September 2008, we entered into an Asset Purchase Agreement with the Tully’s Coffee Corporation to acquire the Tully’s coffee brand and wholesale business. Tully’s wholesale business division distributes handcrafted coffees and related products via office coffee services, food service distributors, and over 5,000 supermarkets located primarily in the western states. The geographic region encompassed by the Tully’s brand creates an advantaged opportunity for the Company to accelerate growth in the west coast market by capitalizing on Tully’s brand recognition and the loyalty of their customer base. We anticipate this transaction will close in early fiscal 2009.

Growth Strategy

FACE="Times New Roman" SIZE="2">In recent years, the primary growth in the coffee industry has come from the specialty coffee category, including demand for single-cup specialty coffee. This growth has been driven by the wider availability of
high-quality

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coffee, the emergence of upscale coffee shops throughout the country, and the general level of consumer knowledge of, and appreciation for, coffee quality.
The Company has been benefiting from the overall market trend plus what we believe to be carefully developed and distinctive advantages over our competitors.

SIZE="2">Our coffee is available in many different distribution channels and customer categories, as best seen in our primary geographic market, the Eastern United States. This multi-channel strategy provides widespread exposure to the brand in a
variety of settings, ease of access to the products, and many tasting opportunities for consumer trial. Our coffee is widely available throughout the day: at home in the morning, in hotels, travel destinations and entertainment venues, at
convenience stores on the way to work, at the office, in restaurants, in supermarkets, and at home again at the end of the day. Our Company also participates in many special event activities, providing sampling opportunities and increased visibility
for the brand.

We believe that consumer trial of our products in AFH venues such as convenience stores, foodservice establishments and office coffee
services is a significant advantage and a key component of our growth strategy. As brand equity is built in AFH venues, expansion typically continues through customer channels such as supermarkets and specialty food stores which, in turn, sell our
coffee to be consumed at home. This expansion process capitalizes upon this AFH / AH interrelationship. This strategy is designed to further increase our market share in geographic areas in which we already operate in order to increase sales density
and drive operational and brand-equity efficiencies.

We are focused on building our brand and profitably growing our business. We believe we can continue
to grow sales by increasing market share in existing markets, expanding into new geographic markets, expanding sales in high-growth market segments such as single-cup coffee and tea, and selectively pursuing other opportunities, including strategic
acquisitions.

Our growth strategy for Keurig involves developing and managing marketing programs to sell as many brewers as possible to generate ongoing
demand for K-Cups. In addition, we are focused on partnering with other gourmet coffee roasters and tea packers with strong national/regional brands to create additional K-Cup products that will generate further royalty income. When used with the
Keurig brewers, K-Cups are designed to provide brewed coffee, tea and hot cocoa that consistently deliver the taste profiles specified by gourmet roasters and tea packers, which we believe creates attractive opportunities for our roaster partners to
expand their geographical presence and take advantage of new market opportunities in both the AFH and AH single-cup markets with minimal investment. Only roasters licensed by the Company may benefit from Keurig’s technology and distribution
network.

In September 2008, we entered into an Asset Purchase Agreement with the Tully’s Coffee Corporation to acquire the Tully’s coffee brand
and wholesale business. Tully’s wholesale business division distributes handcrafted coffees and related products via office coffee services, food service distributors, and over 5,000 supermarkets located primarily in the western states. The
geographic region encompassed by the Tully’s brand creates an advantaged opportunity for the Company to accelerate growth in the west coast market by capitalizing on Tully’s brand recognition and the loyalty of their customer base. We
anticipate this transaction will close in early fiscal 2009.

Growth Strategy

In recent years, the primary growth in the coffee industry has come from the specialty coffee category, driven by the wider availability of high-quality coffee, the emergence of upscale coffee shops throughout the country, and the general level of consumer knowledge of, and appreciation for, coffee quality. The Company has been benefiting from the overall market trend plus what we believe to be some carefully developed and distinctive advantages over our competitors.

We are focused on building our brand and profitably growing our business. We believe we can continue to grow sales by increasing market share in existing markets, expanding into new geographic markets, expanding sales in high-growth market segments such as single-cup coffee and tea, and selectively pursuing other opportunities, including strategic acquisitions. This statement is forward-looking and subject to the risks and uncertainties outlined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Our growth strategy for Keurig involves developing and managing marketing programs to sell as many brewers as possible to generate ongoing demand for K-Cups. In addition, we are focused on partnering with other gourmet coffee roasters and tea packers with strong national/regional brands to create additional K-Cup products that will generate further royalty income. When used with the Keurig brewers, K-Cups ensure that the brewed coffee, tea and hot cocoa consistently deliver the taste profiles specified by gourmet roasters and tea packers, which we believe creates attractive opportunities for our roaster partners to expand their geographical presence and take advantage of new market opportunities in both the AFH and AH single-cup markets with minimal investment. Only roasters licensed by the Company may produce and sell K-Cups and only these select roasters benefit from Keurig’s technology and distribution network.

Geographic and distribution expansion is also a key component to our growth strategy. Our coffee is available in many different distribution channels and customer categories, as best seen in our primary geographic market, the Eastern United States. This multi-channel strategy provides

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widespread exposure to the brand in a variety of settings, ease of access to the products, and many tasting opportunities for consumer trial. Our coffee is widely available throughout the day: at home in the morning, in hotels, travel destinations and entertainment venues, at convenience stores on the way to work, at the office, in restaurants, in supermarkets, and at home again at the end of the day. Our Company also participates in many special event activities, providing great sampling opportunities and visibility for the brand.

We believe that consumer trial of our products in away from home (AFH) venues such as convenience stores, foodservice establishments and office coffee services (“OCS”) is a significant advantage and a key component of our growth strategy. As brand equity is built in AFH venues, expansion typically continues through customer channels such as supermarkets and specialty food stores which, in turn, sell our coffee to be consumed at home (AH). This expansion process capitalizes upon this AFH / AH interrelationship. This strategy is designed to further increase our market share in geographic areas in which we already operate in order to increase sales density and drive operational and brand-equity efficiencies.

In addition to our efforts to boost sales in our core geographic markets in the Eastern United States, our Company also seeks to introduce our coffee in additional markets within the United States, leveraging distribution through either a select few or multiple classes of trade simultaneously, depending upon the market.

Growth Strategy

In recent years, the primary growth in the coffee industry has come from the specialty coffee category, driven by the wider availability of high quality coffee, the emergence of upscale coffee shops throughout the country, and the general level of consumer knowledge of, and appreciation for, coffee quality. Green Mountain Coffee has been benefiting from the overall market trend plus what we believe to be some carefully developed and distinctive advantages over our competitors.

We are focused on building our brand and profitably growing our business. We believe we can continue to grow sales by increasing market share in existing markets, expanding into new geographic markets, expanding into new, high-growth market segments such as single-cup coffee and tea, and selectively pursuing other opportunities, including opportunistic acquisitions. This statement is forward-looking and subject to the risks and uncertainties outlined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The acquisition of Keurig in this fiscal year is part of Green Mountain Coffee’s strategy to grow its sales and earnings over the long term. Keurig is a leading player in the rapidly growing North

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American gourmet single cup coffee market. Keurig has developed a patented and proprietary single cup coffee brewing system that consistently provides coffee drinkers with “coffee house taste” gourmet coffee on demand, one cup at a time. Single cup systems provide consumers consistent taste, convenience and speed with no mess or coffee waste. The Keurig gourmet single cup system is based on three fundamental elements: (i) A patented and proprietary portion pack system (“K-Cup”) using a specially designed filter, sealed in a low oxygen environment to ensure freshness and available in over 130 varieties of branded gourmet coffees and teas; (ii) Specially designed proprietary high speed packaging lines that manufacture K-Cups at the coffee roasters’ facilities using freshly roasted and ground coffee (or tea); (iii) Brewers that precisely control the amount, temperature and pressure of water to provide a consistently superior cup of coffee or tea in less than a minute when used with K-Cups.

Keurig develops and manages marketing programs to sell as many brewers as possible to generate ongoing demand for disposable K-Cups. Keurig licenses the right to manufacture and market K-Cups on a non-exclusive basis to gourmet coffee roasters and tea companies. In return, Keurig collects royalties from the roasters when they ship the K-Cups. Keurig’s unique roaster licensing system has enabled it to offer the industry’s largest selection of gourmet branded coffees and teas in a single cup format that minimizes any consumer concerns about buying into a proprietary system that might have limited selection or availability.

Keurig’s strategy has been to seek out and partner with gourmet coffee roasters and tea packers with strong national/regional brands. The Company’s K-Cups are a non-traditional form of packaging that, when used with the Company’s brewers, assures that the brewed coffee and tea consistently delivers the taste profiles specified by gourmet roasters and tea packers. With minimal investment in turnkey technology, Keurig’s roaster partners are easily able to expand their geographical presence as well as take advantage of new market opportunities in both the AFH and AH single cup markets. Only roasters licensed by the Company may produce and sell K-Cups and only these select roasters benefit from Keurig’s technology and distribution network.

Geographic and distribution expansion is also a key component to our growth strategy. Green Mountain coffee is available in many different distribution channels and customer categories, as best seen in our primary geographic market, the Eastern United States. This multi-channel strategy provides widespread exposure to the brand in a variety of settings, ease of access to the products, and many tasting opportunities for consumer trial. Green Mountain coffee is widely available throughout the day: at home in the morning, in hotels, travel destinations and entertainment venues, at convenience stores on the way to work, at the office, in restaurants, in supermarkets, and at home again at the end of the day. Our Company also participates in many special event activities, providing great sampling opportunities and visibility to the brand.

We believe that consumer trial of our products in convenience stores, foodservice establishments and office coffee services (“OCS”) is a significant advantage and a key component of our growth strategy. As brand awareness increases through trial by consumers of our coffee “by the cup,” demand for the Green Mountain coffee for home consumption also increases. As brand equity is built in “by the cup” venues, expansion typically continues through customer channels such as supermarkets and specialty food stores who, in turn, sell our “by the pound” coffee to consumers. This expansion process capitalizes upon this “by the cup” / “by the pound” interrelationship. This strategy is designed to further increase our market share in geographic areas in which we already operate in order to increase sales density and drive operational and brand-equity efficiencies. In addition to our efforts to boost sales in our core geographic markets in the Eastern United States, our Company also seeks to introduce Green Mountain coffee in additional markets within the United States, leveraging distribution through either a select few or multiple classes of trade simultaneously, depending upon the market.

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Our Consumer Direct channel provides us the opportunity to position Green Mountain Coffee Roasters as a lifestyle brand by informing consumers, building one-on-one relationships, and illuminating Green Mountain Coffee’s points of difference. We publish catalogs and maintain a website to market and sell over 100 coffees, coffee-related equipment and accessories, gift assortments, hand-crafted items from coffee-source countries and Vermont, and gourmet food items covering a wide range of price points. Both the website and catalog allow us to describe in greater detail each of our coffees, explaining their unique attributes and quality aspects. We encourage customers to become members of our “Café EXPRESS” service, a continuity program with customized standing orders for automatic re-shipment. Over the past couple of years, a large portion of our efforts in the consumer direct channel has been directed towards increasing traffic on our website (www.GreenMountainCoffee.com) and marketing of the Keurig^® Single-Cup Brewers. These efforts, along with the catalog and direct mail programs, are intended to build brand awareness nationwide and boost direct sales to consumers in our less mature geographic markets.

Keurig’s primary geographic market is the U.S. In the U.S. and Canada, Keurig operates in both the AFH and AH markets. In AFH, Keurig targets the office coffee market with a broad offering of single cup brewer systems which significantly upgrade the quality of the coffee served in the workplace. Keurig markets its AFH brewing system through a large, selective but non-exclusive network of AFH distributors in the U.S. and Canada ranging in size from local to regional to national. In AH, Keurig targets gourmet coffee drinkers who wish to enjoy the speed and convenience of single cup brewing but who do not want to compromise on taste. Keurig markets its AH brewing system through upscale specialty and department store retailers, select wholesale clubs, on its website (www.keurig.com) and through its licensed roasters and authorized AFH distributors.