Warren Buffett, known for his investing acumen and unabashed love of junk food, once said, “I’m one-quarter Coca-Cola.” This whimsical statement was more than just a humorous joke; it underlined his investment philosophy of putting money into what he loves.
At Berkshire Hathaway’s 2015 annual shareholder meeting, Buffett elaborated on his long-term commitment to high-sugar companies and addressed changing consumer behavior regarding sugar consumption.
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For the past 50 years, Berkshire Hathaway has effectively taken a long position in sugar consumption, investing in companies like See’s Candies and Dairy Queen and publicly traded stocks like Coca-Cola and Kraft Heinz. Buffett recognized that society’s growing awareness of the health costs associated with high sugar intake was leading to declining volumes of carbonated soft drinks and organic growth challenges for consumer packaged goods companies.
In response to a shareholder question about the possible narrowing of the moat for Coca-Cola and similar companies, Buffett confidently stated, “I think it’s a very wide moat.” He acknowledged the trends, but emphasized the continued popularity of Coca-Cola products, predicting: “In 20 years, more cases of Coca-Cola will be consumed by far than today.”
Reflecting on historical skepticism, Buffett recalled an article from the late 1930s that doubted Coca-Cola’s growth potential and noted the lukewarm reception when Berkshire bought Coca-Cola shares in 1988. Still, Buffett’s personal experience and preference for the brand haven’t changed. “If I’d eaten broccoli and Brussels sprouts all my life, I don’t think I’d live this long,” he joked, highlighting his dietary choices and the joy he finds in his favorite foods.
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Buffett and his longtime business partner, the late Charlie Munger, who also shared a penchant for sugary foods, took a lighthearted view of their consumption habits. Buffett pointed out that Munger, then 91, followed similar dietary patterns, which Buffett humorously suggested would help prevent “premature softening of the arteries.” He downplayed the potential health risks, joking, “If I die a little early, I’ll just avoid a few months of slobbering in a nursing home.”
Despite shifts in consumer preferences, Buffett remains optimistic about the sustainability of brands like Coca-Cola and Heinz. He spoke about Berkshire’s history as the largest shareholder in General Foods and the longevity of such brands through various corporate transformations.
“It’s a good bet that a lot of people will like the same thing,” he concluded, contrasting the joy of drinking Coca-Cola with the more frugal offerings at health-oriented stores like Whole Foods. He said, “I don’t see smiles on the faces of the people at Whole Foods…I love the brands we buy.”
Buffett firmly believes in the enduring value of popular brands, even as consumer trends evolve. His investment strategy, focused on personal preferences and long-term value, continues to shape Berkshire Hathaway’s portfolio.
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This article Warren Buffett Swears By His Junk Food Diet: ‘If I Ate Broccoli and Brussels Sprouts All My Life, I Don’t Think I’d Live This Long’ originally appeared on Benzinga.com
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