A little less than a year ago I reported in on our experience with Green Mountain Coffee Roasters'
In a way, we're famous. Turn to page F-32 and you'll find us among a crowd of K-Cup drinkers responsible for fast-growing warranty reserve on Green Mountain's balance sheet:
|Metric||Fiscal 2011||Fiscal 2010|
|Keurig division sales||$1,261.5 million||$727.8 million|
|Warranty reserve balance (year end)||$14.728 million||$6.694 million|
|Warranty reserve as a % of division sales||1.17%||0.92%|
Sources: SEC filings.
Our experience has been both good and bad.
You already know the bad: The experience of owning a faulty brewer gets tiring and more than a little frustrating. With our fourth, I spent months unclogging the system till every third cup created a blockage. Nothing helped, not even de-scaling -- a deep-cleaning process involving vinegar.
The good? Green Mountain has done everything it should to keep us happy. I'd have given up long ago if Keurig not spent hours helping first diagnose and solve issues and then replacing brewers when it became apparent we'd done all we could to repair what we had.
Yet for all the company's efforts, it's becoming harder to stick with Green Mountain. Making coffee has become too much like a bad Saturday Night Live skit in which I'm in full surgical gear -- defibrillator in hand -- trying to resuscitate the poor Keurig.
Only here, the audience (my wife) isn't laughing. She's grimacing, mad, and wondering when Green Mountain will make a brewer we can rely on. I'm wondering the same thing.
Neither of our frustrations are what matters to investors, though. What does? Partnerships. The Starbucks
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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's Web home, portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
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