Consumer packaged goods are still a terrific business in terms of return on invested assets
OK, we’ll have one more question before we break. Jonathan?
Given the changes in consumer tastes in the food business, and Kraft Heinz’s already high margin structure, do you think the brands they own today, plus new product introductions, can together maintain or increase the current level of profits over the next ten years without the benefit of acquisitions? Is there anything in their portfolio besides ketchup that is enjoying growing demand?
Well, in effect, you’re asking me whether Kraft Heinz is a good buy. And we don’t… we don’t want to give information on marketable securities in that manner.
But… yeah, there are a number of items besides ketchup that enjoy growing demand. And some vary quite a bit by geography. There’s enormous differences in the penetration of various products in the portfolio.
Consumer packaged goods are still a terrific business in terms of return on invested assets.
And you know… but the population, worldwide, grows fairly smally (sic) and at… a fairly minor rate. And… people are going to eat about the same amount. And there is some more willingness to experiment, you know, or go for organic products of the sort.
It’s a very good business. And there are new products coming out constantly. It’s not one where you’re going to get terrific organic growth, but it never has been. And… you know, I like the business and we own 26 or so percent of it.
But there are a number of items within Kraft Heinz that enjoy pretty… fairly… healthy growth.
And I think you’d find that at most food companies. And I think you’d find very good returns on invested… on tangible net assets… at those businesses.
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