Can Green Mountain's Leadership Help Brew Growth?
Matthew is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Green Mountain Coffee (NASDAQ: GMCR) put out a press release Tuesday morning announcing several changes to the company’s Board of Directors. If you are like most investors, you probably didn’t even notice. While these types of announcements rarely move a stock, it doesn’t mean that they don’t have value for investors.
The changes to the board found in the announcement included the election of Norman Wesley to the role of Chairman of the Board and the appointment of A.D. “David” Mackay as an independent Director. The company also announced that Michael Mardy, the interim Chairman, was stepping down from that role but was continuing his role as Audit Committee Chair. These changes are important for several reasons.
First, David Mackey is a very important addition to the board. He’s the former CEO of Kellogg (NYSE: K). In the press release the company noted that his experience at Kellogg is about more than just his “rich consumer product background.” He brings significant international experience to the board, as his previous roles at Kellogg included several international stops. As international growth becomes an important next step at Green Mountain, the experiences of Mr. Mackey will prove to be invaluable to his fellow board members.
One other important note about Mr. Mackay is that he’s currently the Non-Executive Chairman of Beam and serves on the board of Fortune Brands Home & Security (NYSE: FBHS). He also formerly served on the board at Fortune Brands (the former parent of both companies), a company where new Green Mountain Chairman Norman Wesley was Chairman and CEO. Further, both men currently serve on the board of Fortune Brands Home & Security. That relationship is likely the reason Green Mountain was able to recruit a person of Mr. Mackey’s background to the company’s board.
The former Fortune Brands was, among other things, a consumer facing seller of addictive beverages. While there are obvious differences between Jim Beam and coffee, there are a lot of commonalities in how to market them to consumers and cross sell other brands in the portfolio. Having that company’s former CEO as the Chairman of the Board will benefit Green Mountain.
That’s not a slight against Mr. Mardy, who’s stepping back into his role as Audit and Finance Committee Chair. His skill set is more on the financial side of things. He’s currently the CFO of Tumi (NYSE: TUMI), which is a premium travel, business and lifestyle products brand. He’s been Tumi’s CFO for nearly a decade and brings extensive financial and accounting experience. That’s of course on top of his experience in a consumer facing luxury and lifestyle products company which has always been a focus of Green Mountain.
These changes to Green Mountain’s board appear on the surface to be very positive for the future of the company. Not only is the board adding a quality former Chief Executive, but its newly elected Chairman has a great background for the role. Finally, the interim Chairman shifts back to a position of strength. While the company still needs to sell coffee, the enhanced board has all the right ingredients to brew some healthy growth.
latimerburned owns shares of and has a bear put spread on Green Mountain Coffee Roasters. The Motley Fool has the following options: long DEC 2012 $16.00 puts on Green Mountain Coffee Roasters. Motley Fool newsletter services recommend Beam and Green Mountain Coffee Roasters. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!