> What are the economic characteristics that make Kraft a good business?
WB: Most big food businesses are good businesses in that they earn good returns on tangible assets. If you own important branded assets in this country, and you have good assets, it is not easy to take on those products. Just imagine Coca-Cola. They sell 1.5 billion servings every day. It has been in everyone’s mind since 1886—associated with good value, happiness and refreshment. It is virtually impossible to take it on in a huge way. It may not be the same with Kraft. Kool-Aid, but I’m not sure I want to take on Kool-Aid. To implant RC Cola in people’s minds globally is very, very difficult. A brand is a promise. Coca-Cola delivers something to you. Virgin Cola — an unusual promise in a product—tried and couldn’t figure it out. Whatever it was, it didn’t work. Don Keough would know. Who would buy a can for two-cents-a-can less than Coca-Cola? We feel pretty good about branded products if they’re leaders in their field. There is nothing unusual about Kraft that’s different from Kellogg. Some good factors are price. If you don’t pay too much, you will do okay. But you won’t get superrich, as the attributes [of a strong brand] are well recognized.<p>Source: BRK Annual Meeting 2008 Boodell Notes
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Time: 2008<p>He was very wrong on this. Kraft just wrote-down $15 billion. Their brands have lost their "cachet." Nobody wants them nor needs them -- you're either buying a gourmet, healthy version (i.e. real cheese instead of the plastic block Velveeta) or a store's private label.<p><a href="https://www.irishtimes.com/business/retail-and-services/warren-buffett-was-too-american-to-see-through-kraft-1.3808217" rel="nofollow">https://www.irishtimes.com/business/retail-and-services/warr...</a>