From The Hustle:
The story of See’s Candies reminds us that a company’s true value can’t always be quantified on a balance sheet — and that, sometimes, consistency and quality can trump rapid growth.
If investing were a video game, you might suspect Warren Buffett of using some kind of cheat code.
His holding company, Berkshire Hathaway, boasts a portfolio that is worth $240B+ and controls $700B in assets. He owns companies in dozens of industries, ranging from insurance (Geico) to underwear (Fruit of the Loom), and holds sizeable stakes in some of the country’s biggest corporations:
But Buffett’s favorite investment isn’t on any Fortune 500 list — it’s a small candy chain that he bought 47 years ago.
- 925m shares of Bank of America
- 400m shares of Coca-Cola
- 325m shares of Kraft Heinz
- 323m shares of Wells Fargo
- 245m shares of Apple
With ~$430m in annual sales (2018), See’s Candy represents less than 0.2% of Berkshire Hathaway’s holdings. Yet, Buffett has called the 99-year-old chocolate chain his “prototype of a dream business.” He frequently brings up the company in interviews and even keeps a box of the candymaker’s peanut brittle on hand at annual shareholder meetings.
In an era that prizes metrics and hockey-stick growth, the story of See’s reminds us that a company’s true value can’t always be quantified on a balance sheet.
The little chocolatier that could
Mary See’s journey to chocolate stardom began in the backwoods of Ontario, Canada.
Born in 1854, Mary married at 20, had 3 children, and settled into a domestic but industrious life co-managing a hotel with her husband. Over the decades, she spent countless hours in the kitchen inventing and perfecting her own candy recipes.
When her son, Charles, relocated to California in 1919, Mary — by then, a 65-year-old widow — decided to join him.
Mary See (far left) with Charles See (far right) and family in
1920s California
(via “See’s Famous Old Time Candies: A Sweet Story;”
See’s Candies)
A druggist by trade, Charles had lost his chain of pharmacies to a forest fire and, for a brief time, worked as a confections salesman. In Los Angeles, he decided to focus on the highest-quality product he could think of: His mother’s homemade chocolates.....MUCH MORE, the good stuff. Not kidding, this is first rate.
In November of 1921, Mary and Charles opened their first See’s Candies shop, offering a variety of chocolates made with fresh ingredients.
From the beginning, See’s chose to build a brand around small-batch quality. It invested in the highest-caliber ingredients (California almonds, Ozarkian walnuts, African chocolate), put Mary’s face on the cover of every $0.85 box, and adopted the slogan “Quality without compromise.” By the 1920s, See’s had expanded to 12 shops.
“The superiority of [Mary’s] product,” wrote one Hollywood newspaper, “is the sole reason for her fame and fortune.”....
See also:
Living La Vida Cocoa: Warren Buffett, Berkshire Hathaway and the Chocolate Wars (BRK.A; BRK.B; CBY; KFT; HSY)
And dozens more but few compare with The Hustle.
Maybe this one as well because it's mainly Warren:
Berkshire Hathaway 2007 Annual Report and Warren Buffet's 2007 Letter to Shareholders (BRK.A)
So that makes two.
