SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ X ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).
Yes [ ]  No [X]

The aggregate market value of the voting stock of the registrant held by non-affiliates of the registrant on April 12, 2003 was approximately $49,166,000 based upon the closing price of such stock on that date.

As of December 12, 2003, 7,015,317 shares of common stock of the registrant were outstanding. See "Market for the Registrant's Common Equity and Related Stockholder Matters."

 Portions of the registrant's definitive Proxy Statement for the 2004 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Form 10-K, are incorporated by reference in Part III, Items 10-14 of this Form 10-K.

 This Form 10-K includes statements that constitute "forward-looking statements" within the meaning of federal securities regulations. For more detail regarding "forward-looking statements" see item 7 of Part II of this Form 10-K.

The majority of Green Mountain's revenue is derived from over 7,000 wholesale customer accounts located primarily in the eastern United States. The wholesale operation serves supermarket, specialty food store, convenience store, food service, hotel, restaurant, university, travel and office coffee service customers. Wholesale customers resell the coffee in whole bean or ground form for home consumption and/or brew and sell coffee beverages at their place of business.

The Company is a Delaware corporation formed in July 1993. Until January 1, 2003, it was a holding company whose only asset was the stock of a Vermont corporation named Green Mountain Coffee Roasters, Inc. On January 1, 2003, the Vermont company was merged with and into the Company. At the same time, the Company changed its name from Green Mountain Coffee, Inc., to Green Mountain Coffee Roasters, Inc., which is the name under which the Company has always operated. The purpose of this merger was primarily to simplify tax reporting.

The Company's fiscal year ends on the last Saturday in September. The Company's fiscal year normally consists of 13 four-week periods with the first, second, and third "quarters" ending 16 weeks, 28 weeks and 40 weeks, respectively, into the fiscal year. As used herein, unless the context otherwise requires, references to "fiscal 2003," "fiscal 2002" and "fiscal 2001" represent the 52-week periods ended September 27, 2003, September 28, 2002 and September 29, 2001, respectively.

The Company's corporate offices are located at 33 Coffee Lane, Waterbury, Vermont 05676. The Company's telephone number is (802) 244-5621, its fax number is (802) 244-5436, and its e-mail address for investor information is investor.services@gmcr.com. The address of the Company's website is www.GreenMountainCoffee.com.

Green Mountain roasts high-quality arabica coffees and offers over 100 coffee selections including single-origins, estates, certified organics, Fair Trade, proprietary blends, and flavored coffees that it sells under the Green Mountain Coffee Roasters^® and Newman's Own^® Organics brands. The Company carefully selects its coffee beans and then appropriately roasts the coffees to maximize their taste and flavor differences.

The Company roasts its coffee in batches to ensure consistency. Green Mountain varies both the degree of roast and the roasting profile (i.e., roast time and temperature) to maximize a particular coffee's taste characteristics. The Company utilizes state-of-the-art roasting software which enables it to more exactly duplicate specific roasts, ensuring Green Mountain's ability to offer consistent taste profiles.

Green Mountain's roasting process is designed to maximize the flavors inherent in the coffee itself, without letting the flavor of roasting overshadow the subtleties of a particular coffee's taste. The Company believes that its distinctive roasting methods enable it to provide the same coffees at different roasting degrees to maximize their flavors and thereby satisfy varying consumer preferences.

The Company uses convection air roasters, which it believes offer a higher degree of flexibility than other commercially available roasters. In addition, the Company has developed specific roasting profiles for each bean type and degree of roast to establish a Green Mountain "signature" for that bean type, which the Company calls its appropriate roast^®. The Company believes that this roasting process distinguishes it from other specialty coffee companies and has resulted in strong customer-brand loyalty.

Green Mountain, unlike some of its competitors, also offers flavored coffees. The Company believes that flavoring its coffee during the production process, rather than providing flavor additives after brewing, provides its customers with taste consistency, convenience and economy.

The Company nitrogen flushes its packaged coffee and employs one-way valve technology in many of its packages that provides a minimum shelf life of six months for the Company's coffees. This technology enables the Company to expand its distribution while maintaining its high standards for quality and freshness.

Green Mountain coffee comes in a variety of packages including whole bean, fractional packages, and single-cup Keurig^® portions. The packaging equipment for Keurig K-Cup^® portion packs is owned by Green Mountain. Green Mountain pays a royalty to Keurig, Incorporated for each K-Cup sold.

Green Mountain's objective is to be the leading specialty coffee company by providing the highest quality coffee and having the largest market share in its targeted markets while maximizing Company value. The Company intends to achieve this objective by differentiating and reinforcing the Green Mountain brand and engendering a high degree of customer and consumer loyalty. Essential elements of this unique approach include:

High Quality Coffee. Green Mountain buys some of the highest quality arabica beans available from the world's coffee-producing regions and uses a roasting process that maximizes each coffee's individual taste and aroma. Green Mountain has a passion for coffee and believes that its coffees are among the highest quality coffees sold in the world.

Outstanding Customer Service. Green Mountain seeks to create customers for life. The Company believes that coffee is a convenience purchase and utilizes its multi-channel distribution network of wholesale customers to make its coffee widely and easily available to consumers for home or away-from-home consumption.

To ensure a high level of responsiveness to customer needs, the Company has established regional distribution centers to supply coffee to its wholesale customers from which customer service calls are dispatched. Green Mountain has also established relationships with some of its vendors to drop ship items directly from the vendor to the customer, thereby significantly decreasing shipping times and costs.

The Company has an online inventory system for its central and regional distribution centers which helps to better serve the Company's customers and to improve the Company's direct-store-delivery process and capability. Green Mountain attempts to maintain at all times adequate levels of inventory to satisfy customer demand. The Company's online ordering application on its website (www.GreenMountainCoffee.com) is fully integrated with the Company's PeopleSoft^® Enterprise Resource Planning ("ERP") system and customers receive instantaneous, electronic shipping confirmations for all online orders.

Customer Coffee Education. The Company offers its wholesale customers, employees and vendor partners educational experiences about the origin and preparation of coffee. A series of training programs, tours and manuals, which feature both classroom and hands-on learning experiences is known as "Coffee College." This intensive training covers all aspects of the coffee experience from tree to cup. In fiscal 2003, over 470 employees of Green Mountain's customers attended Coffee College either on site at the Company's Java University located in Waterbury, Vermont or at a customer location in a program known as "Java U to You."

The Company's consumer direct catalog and website provide an overview of the unique qualities of the different coffees from around the world. Both also provide updates on the current coffee crisis and its impact on coffee-farming communities. The Company believes that educational initiatives create an appreciation for Green Mountain coffee and a loyal consumer base.

Individual Employee Development. Green Mountain Coffee Roasters strives to be a highly inclusive and collaborative work environment that stimulates employees' individual growth and personal awareness. Success for the Company comes from employees' personal contribution and willingness to add value to our process and products. The Company offers programs that provide employees the expertise to offer the very best quality in service, fostering long-term relationships. Green Mountain Coffee Roasters believes that dedication to employee training and development is vital to attracting and retaining the most highly performing, qualified, and motivated employees.

The Company has adopted the Appreciative Inquiry (AI) process as one method of business analysis. AI incorporates a highly positive, inclusive and people-centered way of pursuing business development. In 2003, Green Mountain Coffee Roasters held a Summit with approximately 160 employees and 30 external stakeholders. More than 15 teams of employees are exploring ways to positively change the organization. In 2004, more employees will participate in a second Summit to continue this important work.

Green Mountain Coffee Roasters offers an Educational Assistance Plan that provides financial support to employees who are continuing their education. The Company also offers numerous educational workshops and professional seminars, a leadership development program, a series of coffee knowledge classes and many other opportunities including David Allen's Getting Things Doneâ and personal financial planning. Green Mountain Coffee Roasters supports individual self-awareness through a variety of activities including meditation training.

In connection with the introduction of its Employee Stock Ownership Plan in 1998, Green Mountain initiated a series of business literacy training sessions for its employee owners. The first three sessions concentrated on learning fundamental business concepts. It expands and focuses on the coffee business from tree to cup. The Company also rolled out Committed Engaged Owners "CEO" training to its managers and supervisors. This program focuses on more advanced financial literacy.

Socially Responsible Business Practices. As the worldwide coffee crisis extended into its fourth year, Green Mountain continued to focus attention on supporting its coffee producer partners and the non-profit organizations that work with them. In fiscal year 2003, the Company donated over $180,000 to social and environmental programs in Mexico, Guatemala, Peru, Indonesia, and other coffee-growing countries. Examples of projects include environmental improvements on farms in Mexico and Guatemala with Rainforest Alliance, improvements in coffee milling operations in the war-torn Indonesian region of Aceh, and a new customer-based initiative with Wild Oats Markets, Inc. to construct organic vegetable gardens for coffee-growers in rural Mexico.

In an effort to enhance its impact in coffee source countries, Green Mountain partnered with the U.S. Agency for International Development (USAID) and Ecologic Enterprise Ventures, Inc. ("EEV"), a non-profit organization, to develop a new pre-harvest financing mechanism for sustainable coffee producers. The $1 million award from USAID to EEV will help coffee producers address cash flow needs throughout the year. Green Mountain also expanded partnerships with Heifer International, Inc., and Newman's Ownâ Organics, and started a new effort with the National Wildlife Federation to use proceeds from the sale of Green Mountain coffee to support social and environmental causes.

Green Mountain also continued to seek ways to improve its environmental performance as it endeavored to create a long-term sustainable business model. In fiscal year 2003, the Company focused its attention on global climate change. Green Mountain produces more than 7,000 tons of greenhouse gases (GHGs) annually. The Company is working to reduce its GHG emissions, however the nature of Green Mountain's business results in emissions even after reduction measures are implemented. One way to address these emissions is to offset them. In fiscal year 2003, the Company worked with Vermont-based Native Energy, LLC to support the construction of a wind turbine on the Rosebud Sioux Reservation in South Dakota to offset one-third of the Company's 2003 emissions and provide employment opportunities on the Sioux reservation where incomes are low and opportunities are limited. Another way to offset GHG emissions is to plant trees to "sequester" the carbon dioxide the Company generates. In fiscal year 2003 Green Mountain collaborated with the National Arbor Day Foundation to support the planting of 25,000 trees in national forest areas burnt-over by recent wildfires in Colorado and Arizona.

Compliance with federal, state and local environmental laws and regulations does not materially impact capital expenditures, earnings or the competitive position of the Company.

Green Mountain is focused on building its brand and profitably growing its business. At present, management believes it can continue to grow sales over the next few years at a rate similar to its historical five-year average growth rate (in the range of 15 to 20 percent), by increasing market share in existing markets, expanding into new geographic markets, 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," and under the heading, "Forward-looking information."

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 has been benefiting from the overall market trend plus some carefully developed and distinctive advantages over its competitors.

Green Mountain coffee is available in many different distribution channels and customer categories, as best seen in its 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, on airplanes and trains, at convenience stores on the way to work, at the office, in restaurants, in supermarkets, at the movie theatre, and at home again at the end of the day. The Company also participates in many special event activities, providing great sampling opportunities and visibility to the brand.

The Company believes that its coffees' convenient availability for consumer trial through convenience stores, office coffee services (OCS) and food service establishments is a significant advantage and a key component of its growth strategy. As brand awareness increases through trial by consumers of the Company's coffee "by the cup," demand for the Company's coffee for home consumption also increases. As brand equity is built in "by the cup" venues, expansion typically continues through customers such as supermarkets and specialty food stores who, in turn, sell the Company's "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 Green Mountain's market share in geographic areas in which it already operates in order to increase sales density and drive operational and brand-equity efficiencies. In addition to its efforts to boost sales in its core geographic markets in the Eastern United States, the 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.

In the consumer direct area, the Company focuses solicitations on catalog customers who buy regularly from the Company, including members of the Company's "Coffee Club," a continuity program with customized standing orders for automatic re-shipment. A large portion of the Company's efforts in the consumer direct channel have been directed towards increasing traffic on its website (www.GreenMountainCoffee.com). That, along with the catalog, is intended to build brand awareness nationwide and boost direct sales to consumers in the Company's less mature geographic markets.

The Keurig Investment. In fiscal 2002, Green Mountain acquired a 42% ownership interest in Keurig, Incorporated ("Keurig") by acquiring shares from early investors in Keurig for a price of approximately $15 million. Keurig manufactures brewing equipment that allows users to brew high-quality specialty coffee one cup at a time. Green Mountain has been involved with Keurig since 1994 supporting the development of a single-cup brewing system and as an early investor. Green Mountain was also the first licensed roaster/ distributor partner with Keurig. Keurig seeks to license office coffee service ("OCS") distributors to sell and distribute K-Cups^® and brewers to offices both nationally and internationally. Green Mountain is one of four coffee roasters that manufacture and distribute the K-Cups used to brew coffee by the cup in the Keurig system throughout North America, and continues to sell more K-Cups than all other domestic licensed coffee roasters combined.

Through the purchase, Green Mountain has established a stronger relationship with Keurig and its management team. Both Keurig and the Company started to market and sell the Keurig^® Single-Cup Brewer for the home market in November of 2003. The Company's launch of the home brewer is being effected through its consumer direct channel, through catalog sales as well as on the website (www.GMCR.com). The Company is also supporting sales to the home through OCS distributors that wish to participate in the fulfillment of the needs of the home market. Keurig's launch of the home machine is primarily through its own website and sales to OCS distributors.

Keurig is effectively controlled by MD Co. (controlled by MDT Advisers, an institutional investment company) which owns approximately 23% of Keurig's capital stock. As a result of contractual limitations and restrictions agreed to by the Company and certain other stockholders of Keurig, MD Co. has the ability to elect a majority of Keurig's Board of Directors, cause certain types of amendments to Keurig's Certificate of Incorporation, and approve or reject a sale of Keurig's business.

New Products. In October 2002, Green Mountain Coffee Roasters signed a licensing agreement with Newman's Own Organics, Inc. Under the agreement, Green Mountain has launched a line of six co-branded Newman's Own^® Organics coffees under the Newman's Own^® Organics and Green Mountain Coffee Roasters^® brand names. These products were launched successfully in 2003 with several large supermarket customers, and more are expected to follow in 2004. In the past year, the Newman's Own Organics product line, as well as Green Mountain's organic and Fair Trade product line, have enabled the Company to grow at a faster rate outside its core geographic market through the acquisition of new supermarket accounts.

In January 2003, Green Mountain Coffee Roasters completed a licensing agreement with the Hain Celestial Group, Inc. to produce and distribute a line of six teas in K-Cupsâ under the Celestial Seasoningsâ brand. These products are currently being sold to office coffee distributors as well as through the Company's Consumer Direct channel.

Customers. The Company continued to experience solid growth in its wholesale business in fiscal 2003. During the year, it acquired and/or deepened relationships with several large customers.

In the convenience store channel, the Company's pounds shipped increased by over 14%. While the total number of locations serving the Company's coffee increased by about 5% over the prior year (to 3,300 at the close of fiscal 2003), the majority of the growth in this channel was driven by improved business with current customers. The Company's relationship with Exxon Mobil Corporation ("ExxonMobil") continues to be a strong driver for growth in this convenience store channel.

The supermarket channel experienced over 24% growth in coffee pounds shipped over the prior year. This growth was driven largely by new distribution, since the beginning of fiscal 2003, to two very large customers: Wild Oats Markets, Inc., a leading chain in the rapidly growing natural foods category; and Costco Wholesale Corporation, a leading buyer's club retailer. The Company is the exclusive supplier of bulk certified Fair Trade and organic coffee for all Wild Oats locations. Growth in the supermarket channel continued throughout the year, with the addition of several others chains, including D'Agostino Supermarkets, Harris Teeter, and Wegmans Food Markets. In November 2003, after the close of its fiscal 2003, the Company began selling to Publix Super Markets as well.

Coffee pounds shipped in the OCS channel grew by 13% over the prior year. Three key factors contributed to sales growth in this channel. First, the Company successfully converted most of Procter & Gamble's Millstone customers when this competitor exited the K-Cupâ business in the summer of 2003. Second, Green Mountain began selling to over 50 branches of ARAMARK Corporation during the year. The third factor contributing to the OCS channel growth was the introduction of Celestial Seasoningsâ Teas in K-Cups.

Coffee pounds shipped in various food service venues grew at an aggregate rate of 17% in fiscal 2003 compared to the prior fiscal year. The most significant source of growth was driven by the Company's deeper relationship with Sodexho (a provider of food service products and services to business and industry, universities and health care facilities). This relationship facilitated new distribution for Green Mountain's Fair Trade and organic coffees at dozens of colleges, hospitals and business locations in 2003, and more are expected in fiscal 2004. The Company has also developed a new relationship with Xanterra (a food service provider for many of the U.S. National Parks) in fiscal 2003, which has enabled Green Mountain to gain access to thousands of visitors in places such as Yellowstone and the Grand Canyon. Furthermore, the Company broadened its relationship with AMTRAK Corporation, which now serves Green Mountain Coffee on-board their trains throughout the United States (the previous relationship limited exposure primarily to the eastern corridor routes).

Coffee pounds shipped in fiscal 2003 and fiscal 2002, broken down by sales channel, are as follows:

Coffee pounds by geographic region are as follows:

Note: The allocation by region of coffee pounds shipped to certain McLane Company, Inc. warehouses for distribution to ExxonMobil convenience stores has been estimated. Since the second quarter of fiscal 2002, these estimates have been based on actual McLane's shipment patterns from each McLane warehouse to ExxonMobil convenience stores.

Wholesale operations are coordinated from the Company's headquarters in Waterbury, Vermont, and supplemented by regional distribution centers in geographic locations where the density of customer accounts so warrants. Regional distribution centers are located in Biddeford, Maine; Latham, New York; Woburn, Massachusetts; Southington, Connecticut; and Lakeland, Florida. Distribution facilities are located within a two-hour radius of most customers to expedite delivery. The Company uses third party carriers, primarily Federal Express, for shipping to customers not supported by a regional distribution center.

The wholesale operation primarily uses in-house sales people. However, in certain sales channels, such as the OCS and food service sectors, the Company utilizes the services of independent distributors who purchase coffee from the Company for resale to wholesale customers. The Company believes that the use of such distributors provides access to certain wholesale customers whose size or geographic location makes it economically inefficient for the Company to service directly.

The Company generally provides wholesale customers with brewing, grinding and related equipment and product displays ("loaner equipment") at no charge, which are usually installed on the customer's premises by Company personnel or contracted service personnel. A customer also is assigned a service technician who services, repairs and provides preventive maintenance and emergency service on such equipment. Additionally, for supermarket customers, Green Mountain employs a team of merchandisers who ensure that supermarket displays are clean, appropriately stocked, and have promotional items to maximize sales. The Company believes most competitors of Green Mountain in the wholesale segment do not provide such high levels of sales and equipment service support.

Consumer direct represents Green Mountain Coffee at its best, helping to position the brand as a lifestyle brand. It offers the opportunity to inform consumers, build one-on-one relationships, and illuminate the Company's point of difference. The Company publishes catalogs and maintains a website to market over 75 coffees, and coffee-related equipment and accessories, as well as gift assortments and gourmet food items covering a wide range of price points. Green Mountain's Customer Care Representatives provide coffee consultations and education on the various attributes of the Company's coffee selections as they process a consumer's order.

In the consumer direct channel, coffee pounds shipped grew by 12% in fiscal 2003 over the prior year. This growth resulted from K-Cupsâ sold during the Company's single cup at-home testing initiatives as well as improved targeting techniques used to generate orders from the Company's catalog and e-commerce website. Consumer direct sales accounted for approximately 6%, 5%, and 4% of total sales in fiscal 2003, 2002, and 2001, respectively.

The specialty coffee market is highly competitive, and Green Mountain competes against all sellers of specialty coffee. In the OCS, convenience store and food service arenas, Sara Lee, Kraft, Procter & Gamble and New England Coffee are competitors. In addition, specialty coffee includes retailers such as Starbucks, and Dunkin' Donuts (a subsidiary of Allied Domecq). Green Mountain Coffee was the first roaster to sell its coffee in Keurig's innovative single-cup brewing system, used primarily in the office coffee service market, and the Company has established a dominant position in the sale of single-cup Keurig portions. The Company does, however, now compete for Keurig sales with three other North American roasters: Diedrich Coffee, Timothy's and Van Houtte, a vertically integrated roaster and office coffee service distributor operating in Canada and the United States.

FLAVIAâ Beverage Systems, an affiliate company of Masterfoods USA (part of Mars, Incorporated), is the manufacturer of a single-cup machine that also competes in the OCS market.

In the fall of 2003, Salton, the manufacturer of the One:One single-cup machine has entered the market with coffee being supplied by Mellita. This machine is positioned for use in the home market and is currently being offered by mass-market retailers as well as through various direct mail catalogs.

In the supermarket channel, Starbucks, a leading independent specialty coffee retailer, has a significant presence nationwide. Starbucks has a distribution agreement with Kraft Foods to place Starbucks coffee in supermarkets along with Kraft's Maxwell House® coffee. Additionally, the Company also competes with "commercial" coffee roasters, to the extent that it is also trying to "upsell" consumers to the specialty coffee segment. A number of large consumer goods multinationals have divisions or subsidiaries selling specialty coffees, a significant portion of them having been developed through the acquisition of independent brands. For example, Procter & Gamble distributes the premium coffee products Millstone® and Brothers in many supermarkets nationwide, which compete with Green Mountain's coffee.

In the consumer direct channel, the Company competes with established suppliers such as Gevalia®, a division of Kraft Foods, as well as with other direct mail companies.

The Company expects intense competition, both within its primary geographic territory, the Eastern United States, and in other regions of the United States, as it expands from its current territories. The specialty coffee market is expected to become even more competitive as regional companies expand and attempt to build brand awareness in new markets.

Green Mountain competes primarily by providing high quality coffee, easy access to its products and superior customer service. The Company believes that its ability to provide a convenient network of outlets from which to purchase coffee is an important factor in its ability to compete. Through its multi-channel distribution network of wholesale and consumer direct operations and its "by the cup"/ "by the pound" strategy, the Company believes it differentiates itself from many of its larger competitors, who specialize in one primary channel of distribution. The Company also believes that one of the distinctive features of its business is that it is one of the few coffee companies that roasts its coffees individually prior to blending, varying both the degree and timing of the roast to maximize a coffee's particular taste characteristics. The Company also seeks to differentiate itself by being socially and environmentally responsible. Finally, the Company believes that being an independent roaster allows it to be better focused and in tune with its wholesale customers' needs than its larger, multi-product competitors. While the Company believes it currently competes favorably with respect to these factors, there can be no assurance that it will be able to compete successfully in the future.

The Company utilizes a combination of outside brokers and direct relationships with farms, estates, cooperatives and cooperative groups for its supply of green coffees. Outside brokers provide the largest supply of green coffee to the Company. Coffee is the world's second largest traded commodity and its supply and price are subject to high volatility. Although most coffee trades in the commodity market, coffee of the quality sought by the Company tends to trade on a negotiated basis at a substantial premium or "differential" above commodity coffee pricing, depending upon the supply and demand at the time of purchase. Supply and price can be affected by multiple factors, such as weather, politics and economics in the producing countries.

Cyclical swings in commodity markets, based upon supply and demand, are common and it is expected that coffee prices and differentials will remain volatile in the coming years. In addition, a number of factors, such as pest damage and weather-related crop failure could cause coffee prices to climb. In recent years, green coffee prices have been under considerable downward pressures due to oversupply, driven largely by the production of medium to low-grade coffee. While production of commercial grade coffee is on the rise, many industry experts anticipate a drop in production of top grade specialty coffees. This situation is likely to persist in the short-term although the Company anticipates somewhat higher prices than the record lows set earlier in 2002. The low coffee price ranges generally experienced in recent years are not considered high enough to support proper farming and processing practices, impacting the overall supply of top grade coffees. With the growth of the specialty coffee segment, it is important that prices remain high enough to support world consumption of the top grades of coffees.

For coffees that Green Mountain continues to purchase with differentials against the commodity market, the Company generally fixes the price of its coffee contracts two to six months prior to delivery so that it can adjust its sales prices to the market. Green Mountain believes this approach is the best way to provide its customers with a fair price for its coffee. Approximately 52% of the Company's estimated coffee requirements through September 26, 2004, the end of its 2004 fiscal year, had been contracted for as of September 27, 2003. Some of the fixed coffee purchase commitments entered into recently extend through several fiscal years, as the Company made a decision to enter into long-term contracts with specific coffee sources to ensure a consistent supply of high quality coffee. In addition, the Company does from time to time purchase coffee futures contracts and coffee options to provide additional protection when it is not able to enter into coffee purchase commitments or when the price of a significant portion of committed contracts has not been fixed.

The Company generally tries to pass on coffee price increases and decreases to its customers. Since coffee has come down from its 1997 highs, the Company has decreased its prices several times. In general, there can be no assurance that the Company will be successful in passing on green coffee price increases to customers without losses in sales volume or gross margin. Similarly, rapid, sharp decreases in the cost of green coffee could also force the Company to lower sales prices before realizing cost reductions in its green coffee inventory and purchase commitments. Green Mountain roasts over 40 different types of green coffee beans to produce its more than 100 coffee selections. If one type of green coffee bean were to become unavailable or prohibitively expensive, management believes Green Mountain could substitute another type of coffee of equal or better quality meeting a similar taste profile. However, a worldwide supply shortage of the high-quality arabica coffees the Company purchases could have an adverse impact on the Company.

In fiscal 2001, Green Mountain purchased approximately 25% of its coffee from specifically identified farms, estates, cooperatives and cooperative groups. In fiscal 2002, that number grew to 34%, and to approximately 42% in fiscal 2003. The Company projects that close to 50% of coffee purchased during fiscal 2004 will be from identified sources. The Company believes its "farm identified" strategy will continue to result in improved product quality, product differentiation, long-term supply and pricing stability. In addition, the Company believes that its efforts will have a positive impact on the living and working environment of farm workers and their families.

The Company is the owner of certain United States trademark and service mark registrations, including Green Mountain Coffee®, Green Mountain Filters®, Green Mountain Coffee Roasters®, Nantucket Blend®, Rain Forest Nut®, Stewardship®, Green Mountain Coffee Roasters and Design®, Vermont Country Blend®, Café Vermont®, Mocha Almond Chiller®, You're Following the Leader®, Tapestry Blend Dark®, Appropriate Roast®, Autumn Harvest Blend®, Fresh From the Roaster®, Lake & Lodge®, La Esperanza®, Monté Verdé®, It's a Jungle Out There - Let's keep it that way® and Organic Black Parrot Blend®. The Company anticipates maintaining the United States registrations above with the United States Patent and Trademark Office. The Company is also the owner of other trademarks and service marks, including The Taste of a Better World^TM, Great Coffee Made Easy^TM, Sip and Relax, You're on Green Mountain Time^TM, PartnerFarm^TM, Quick-Cup^TM, Café Verdé^TM, Dark Magic^TM, Better World Hot Cocoa^TM and The Ultimate Office Coffee^TM.

The Company has registered the mark "Green Mountain Coffee Roasters" in the United Kingdom, the European Union, in South Korea and in Taiwan. In Canada, the Company has registered the marks "Green Mountain Coffee" and "Green Mountain Coffee Roasters." The Company expects to maintain these registrations. Other foreign trademark and service mark applications are also pending.

The Company has an irrevocable, perpetual royalty-free license to use the mark "Earth-Friendly Coffee Filters" in connection with coffee filters. The Company also has a limited license to use the marks "Kona Mountain Coffee" and "Kona Mountain Estate" in connection with its Kona coffee worldwide (excluding Hawaii), all subject to the terms of the agreements under which these licenses are granted. In connection with the sale and distribution of Green Mountain K-Cups^® and the Keurig^® Single-Cup Brewing system, the Company has a limited, non-exclusive license to use the mark "Keurig^®" and other marks owned by Keurig, Incorporated, subject to the terms of the agreement under which the licenses are granted. The Company has a limited, royalty-free license to reproduce a painting by artist Corliss Blakely on its labels and marketing materials.

The Company believes these trademarks, service marks and licenses will continue to be important to its success. The Company does not hold any patents.

As of September 27, 2003, the Company had 512 full-time employees and 61 part-time employees. The Company supplements its workforce with temporary workers from time to time, especially in the first quarter of each fiscal year to service increased customer and consumer demand during the peak November-December holiday season. The Company believes that it maintains excellent relations with its employees.

The Company leases one principal manufacturing, warehousing and distribution facility located at Pilgrim Park in Waterbury, Vermont. The facility has in total approximately 96,000 square feet of usable space which includes a 28,800 square foot mezzanine area. The lease on this building expires in 2014. The Company's other facilities, all of which are leased, are as follows:

Except for the warehousing and distribution space at its Vermont location, the Company believes that its facilities are generally adequate for its current needs and that suitable additional production and administrative space will be available as needed for the remainder of fiscal 2004.

On November 5, 2003, the Company announced that it was expanding its Waterbury, Vermont manufacturing and distribution facility by constructing a new 52,000 square foot facility designated solely for warehousing and distribution. The Company plans to lease the underlying land from Pilgrim Partnership, LLC. This new warehousing and distribution building will incorporate material handling automation to improve the Company's distribution efficiencies, which the Company anticipates, will result in lower overall distribution costs relative to sales over the long-term. The additional warehouse space will also allow for more product diversity and the elimination of outside storage expenses. The Company expects this expansion project to cost approximately $8,400,000 and anticipates utilizing a combination of long-term debt and lease financing.

The Company is not currently party to any material pending legal proceeding.

No matters were submitted to a vote of security holders during the fiscal quarter ended September 27, 2003.

Certain biographical information regarding each executive officer of the Company is set forth below:

Kathryn S. Brooks has served as Vice President of Human Resources and Organization Development since April 2001. From April 1998 to April 2001, Ms. Brooks was Senior Vice President of Human Resources at Webster Bank, a financial services company. From May 1997 to April 1998, Ms. Brooks was President of Human Resources Professional Services, a management consulting company. From May 1992 to May 1997, Ms. Brooks served as Vice President of Human Resources at Bombardier Capital.

Paul Comey has served as Vice President of Facilities and Process Engineering of Green Mountain since June 1993. From March 1986 to May 1993, Mr. Comey was the owner and principal consultant of Baseline Solutions, a company engaged in providing consulting services to the coffee industry, including the Company.

Daniel R. Martin has served as Vice President of Sales and Marketing of Green Mountain since December, 2002. From September 2002 to December 2002, Mr. Martin was Vice President, Marketing Services at the Great Atlantic & Pacific Tea Company (A&P). Prior to this position, Mr. Martin was the General Manager for A&P's Eight O'Clock Coffee Company division from February 2001 until August 2002. Prior to his years at A&P, Mr. Martin worked at Kraft Foods from July 1988 to February 2001, where he held roles of increasing responsibility in sales and brand management, including positions in the Maxwell House and Gevalia coffee divisions.

James K. Prevo has served as Chief Information Officer of Green Mountain since March 1993. Mr. Prevo worked for Digital Equipment Corporation from November 1979 through March 1993. There he held positions as a Software Engineer, Project Manager (New Product Introduction), Program Manager (Computer Products Manufacturing and VAXcluster Systems Engineering) and Business Manager (Systems Integration Services). On May 1, 2000, ComputerWorld magazine recognized Mr. Prevo as one of the "Premier 100 IT Leaders for the Year 2000."

Frances G. Rathke has served as Chief Financial Officer of Green Mountain since October 2003, and as Interim Chief Financial Officer of the Company since April 2003. Prior to that, Ms. Rathke worked as a financial consultant with various food manufacturers and food retailers from July 2001 to April 2003. One of these consulting assignments included the position of Interim Chief Financial Officer for Wild Oats Markets, Inc., a supermarket chain, from July 2001 to December 2001. Prior to this, Ms. Rathke served as Chief Financial Officer for Ben & Jerry's Homemade, Inc., an ice cream manufacturer, from April 1989 to August 2000. From September 1982 to March 1989, Ms. Rathke practiced public accounting and auditing with Coopers & Lybrand LLC, and is a certified public accountant.

Stephen J. Sabol has served as Vice President of Development of Green Mountain since October 2001. Mr. Sabol was Vice President of Sales of the Company from September 1996 to September 2001. Prior to that, Mr. Sabol served as Vice President of Branded Sales of the Company from August 1992 to September 1996. From September 1986 to August 1992, Mr. Sabol was the General Manager of Roasters responsible for overall performance of the wholesale division in Maine and New Hampshire.

Robert P. Stiller, founder of Green Mountain, has served as its President and Chief Executive Officer since its inception in July 1981. In September 1971, Mr. Stiller co-founded Robert Burton Associates, a company engaged in the development and sale of E-Z Wider products and served as its President and director until June 1980, when Robert Burton Associates was sold.

Jonathan C. Wettstein has served as Vice President of Operations of Green Mountain since April 1993. From June 1974 to April 1993, Mr. Wettstein was employed by Digital Equipment Corporation in a variety of positions including Plant Manager, Marketing Manager, Business and Materials Manager and Product Line Controller.

The Company has never paid a cash dividend on its common stock and anticipates that for the foreseeable future any earnings will be retained for use in its business and, accordingly, does not anticipate the payment of cash dividends.

On October 22, 2002, Green Mountain's Board of Directors approved a stock repurchase program authorizing the repurchase, up to an aggregate of $3,000,000, of the Company's common stock. The repurchases are made from time to time on the open market at prevailing prices, in negotiated transactions. The Company repurchased 19,281 shares for an aggregate repurchase price of approximately $286,000 during the first quarter of fiscal 2003.

4. Securities Authorized for Issuance Under Equity Compensation Plans