Green Mountain Coffee Roasters (GMCR)

Our increasing reliance on a limited number of specialty farms could impair our ability to maintain or expand our business.

Because an increasing amount of our supply of Arabica coffee beans comes from specifically identified specialty farms, estates, cooperatives, we are more dependent upon a limited amount of suppliers. In fiscal 2008, 40% of green coffee purchases were “farm-identified”. The timing of these purchases is dictated by when the coffee becomes available (after the annual crop), which does not always coincide with the period we need green coffee to fulfill customer demand. This can lead to higher and more variable inventory levels. Any deterioration of our relationship with these suppliers could lead to inventory shortages. In such case, we may not be able to fulfill the demand of existing customers, supply new customers or expand other channels of distribution. A raw material shortage could result in decreased revenue or could impair our ability to maintain or expand our business.

Our increasing reliance
on a limited number of specialty farms could impair our ability to maintain or expand our business.

Because an increasing amount of our supply of
Arabica coffee beans comes from specifically identified specialty farms, estates, cooperatives, we are more dependent upon a limited amount of suppliers. In fiscal 2008, 40% of green coffee purchases were “farm-identified”. The timing of
these purchases is dictated by when the coffee becomes available (after the annual crop), which does not always coincide with the period we need green coffee to fulfill customer demand. This can lead to higher and more variable inventory levels. Any
deterioration of our relationship with these suppliers could lead to inventory shortages. In such case, we may not be able to fulfill the demand of existing customers, supply new customers or expand other channels of distribution. A raw material
shortage could result in decreased revenue or could impair our ability to maintain or expand our business.