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The Mad Men Finale Wasn’t a Paid Ad for Coke

"No money exchanged hands"

If you haven’t been hiding under a rock for the past day or so, you know that the AMC series Mad Men ended with the iconic “I’d like to buy the world a Coke” ad Sunday night. And it turns out Coke neither paid nor received any money for the inclusion in the show.

A Coke spokesman told People that “no money exchanged hands” as part of the show. While Coke did know that its brand would play into the finale, officials say they were not aware exactly how the show would end.

Read more at People.

TIME Brands

These Are the 10 Most Purchased Brands in the World Right Now

Coca-Cola Buys North American Bottling Operations Of Coca-Cola Enterprises Inc. For $12.3 Billion
Bloomberg—Bloomberg via Getty Images Coca-Cola can and bottle images appear on the side of a trailer outside the Coca-Cola Enterprises Inc. bottling facility in Niles, Illinois, U.S., on Thursday, Feb. 25, 2010.

Some sweet news for soda

Coca-Cola held onto its crown as the most-purchased brand in the world last year in spite of a push for healthier fare.

Coke came out on top of the latest annual Brand Footprint study from U.K. market research firm Kantar Group, which analyzed and ranked 11,000 global brands, Business Insider reports. Kantar awarded the Coca-Cola Company brand a score of 5.7 million “consumer reach points” (CRP) — a metric that tracks the number of households buying a product and the frequency of those purchases.

Coca-Cola easily beat out its closest competitors: Colgate came in second with 3.9 million CRP, while Nestlé-owned Maggi scored 2.8 million.

Dove, which is owned by Unilever, was the fastest-growing brand in the top 10, moving up three spots to No. 9 on Kantar’s ranking. Dove, which actually sparked a bit of a backlash with its recent “Choose Beautiful” ad campaign, sells personal care products that include soaps, moisturizers and deodorants.

The rest of the top 10 brands included another Unilever property, soap brand Lifebuoy, at No. 4. That was followed by instant-coffee brand Nescafé, PepsiCo brands Pepsi and Lay’s, and dried foods brand Knorr, respectively. Procter & Gambles’ Tide detergent brand rounded out the ranking.

MONEY Advertising

Jon Hamm Just Predicted Don Draper’s Future After the Mad Men Finale

Film Independent At LACMA Special Screening Of "Mad Men"
Amanda Edwards—WireImage Actor Jon Hamm on May 17, 2015 in Los Angeles, California.

The actor offers some clarity on the ambiguous series finale ending.

After AMC’s hit show Mad Men took its final bow on Sunday, fans took to the Internet to debate the meaning of its ambiguous ending (caution: spoilers ahead).

The final scene shows ad man Don Draper smiling blissfully at a spiritual retreat in California before cutting to the iconic Coca-Cola “Hilltop” ad from 1971. Some commenters have argued that the ad signals Draper’s escape from the clutches of Madison Avenue—and his role as a “Mad Man”—just as the ad world has begun using countercultural emblems to help sell its wares. Others have taken a more cynical view: that Draper will mine the experience to create the iconic commercial.

Turns out that actor Jon Hamm, who played Draper during the series’ seven-season run, falls into the latter camp.

“The next day, he wakes up in this beautiful place, and has this serene moment of understanding, and realizes who he is. And who he is, is an advertising man,” Hamm told the New York Times. “And so, this thing comes to him. There’s a way to see it in a completely cynical way, and say, ‘Wow, that’s awful.’ But I think that for Don, it represents some kind of understanding and comfort in this incredibly unquiet, uncomfortable life that he has led.”

Whether you think that’s cynical or not, it certainly suggests that Hamm and show creator Matt Weiner took to heart the Coke ad‘s multilayered message:

“I’d like to teach the world to sing, in perfect harmony! I’d like to buy the world a Coke and keep it company.”

TIME Television

‘Buy the World a Coke’ Songwriter ‘Amazed’ to Hear it Ended Mad Men

Roger Greenaway says he only found out the morning after the finale

When “I’d Like to Buy the World a Coke” played out the final scene of Mad Men on Sunday night, it took social media by storm—but one of the tune’s songwriters, Roger Greenaway, had no idea it was even being used.

Greenaway, who admits he hasn’t watched Mad Men, tells TIME he woke up to an email about the news this morning, and says he was “amazed” to hear about it. As he recalls, the iconic jingle that first aired in 1971 might have never made it to primetime without a bit of luck.

The songwriter and a partner, Roger Cook, had come up with the melody while on vacation in Portugal, and later played it for McCann-Erickson employees on the Coca-Cola account. As has been widely reported, creative director Bill Backer got held up in Ireland due to bad weather on his way to meeting with the songwriters in London, and was inspired by the sight of fellow travelers chatting over bottles of Coke. That gave birth to the lyrics about buying the world a coke and keeping it company.

The song was at first only meant to be a commercial for radio, Greenaway says, not TV, and when it hit the airwaves in the U.S., he adds it was hardly a smash hit—there was “basically no good or bad response to it.”

Coca-Cola’s website states that Backer “put his creative team to work to come up with a visual concept” for the song, but as Greenaway recalls, it happened more organically.

As he remembers, another McCann employee, Harvey Gabor, came up with the idea of doing an ad that featured young men and women of different nationalities singing together on a hilltop with Coke bottles in their hands. According to Greenaway, Gabor told Backer: “I’m sure this will work, but I need something musically anthemic. Do you have anything in the musical library that would suit such an idea?” Backer suggested listening to the commercials they’d recorded for Coke in the last few years, some by Greenaway and Cook and some by other writers. After listening to for a few days, he picked “I’d Like to Buy the World a Coke.”

This time, when the song played on television, it was a huge success. Within a week, Greenaway says, thousands of people had sent letters to the Coca-Cola headquarters asking where they could find the music.

“Had it not been for Harvey Gabor and his idea with the kids on the hill, it would probably have never seen the light of day,” Greenaway says. “That’s what we in the business call luck.”

MONEY Warren Buffett

13 Priceless Warren Buffett and Charlie Munger Quotes From the 50th Anniversary Meeting

150512_INV_BuffettMunger
Nati Harnik—AP Berkshire Hathaway Chairman and CEO Warren Buffett, right, speaks alongside Vice Chairman Charlie Munger.

This year’s event offered numerous gems.

I made the trip to Omaha recently to glean investing wisdom from two of the greatest investors of all-time — Warren Buffett and his second-in-command, Charlie Munger — but I left with much more. Here are 13 of the most memorable life lessons from Berkshire Hathaway’s 2015 annual meeting.

1. On diets

Buffett said: “I am one-quarter Coca Cola. … if had eaten broccoli and brussel sprouts, I don’t think I would have lived as long.” Buffett added, “I don’t see a lot of smiles on the faces of people at Whole Foods.”

Both Buffett and Munger spent the majority of the meeting chowing down on See’s Candies and drinking Coke — though Buffett did mix in some pineapple juice for his voice. Say what you will about their diet — Buffett is 84, and Munger is 91. Maybe they cracked the code: Do what makes you happy.

2. On predicting the future

Buffett made it clear that Berkshire will “never made an acquisition based on macro factors.” This is because “we know we don’t know.”

Worrying about interest rates and the global economy is stressful, and you have no control over macroeconomic events. Just do as Buffett and Munger do: focus on what you can predict and control.

3. On taking risk

Buffett explained that he and Munger missed some opportunities early on and that they could have “pushed harder.” Munger replied: “It’s obviously true. If we’d used the leverage that some others did, Berkshire would have been much bigger … but we would have been sweating at night. It’s crazy to sweat at night.”

To which Buffett added slyly, “Over financial things.”

4. On finding the right people

When asked about Berkshire Hathaway’s investment managers Todd Combs and Ted Weschler, Munger said: “We want people where … every aspect about their personality makes you want to be around them. … Trust first, ability second.”

Surround yourself with people whom you want to be around and whom you can trust — sound advice.

5. On reputations

When asked how Berkshire Hathaway has built its culture, Munger suggested that it’s about “behaving well as you go through life.” Buffett added, “Over time, you get the reputation you deserve. … I believe the same is true for companies.”

6. On seeing a glass half-full

Munger was asked about insurance premiums for older adults. More precisely, it was a complaint that, even when healthy, elders have to pay more for insurance.

Munger replied: “You find you’re not deteriorating as fast as your contemporaries. You may be paying an unfair price for your auto insurance, but it’s a good tradeoff.”

Given the choice of either staying healthy or paying lower premiums, I’d take the first choice, too.

7. On selecting a spouse

“Look for someone with low expectations,” Munger said.

8. On being liked

The duo was asked by a young boy how they have gotten people to like them. Munger said, “Get very rich and generous.”

Buffett added, “People see all sorts of virtue when you’re writing a check.”

9. On philanthropy

When asked about his pledge to donate 99% of his wealth, Buffett said, “There’s no Forbes 400 in the graveyard.” He added that his equity holdings have “no utility to me, but have enormous utility around the world.”

Later, Buffett said that his goal was to figure out how he could “do the most good.” We may not all have billions of dollars to donate, but I think we can all appreciate the sentiment.

10. On how to succeed

“We’ve now watched a lot of other people get started. The ones who follow [Benjamin] Graham have done pretty well.” Munger continued, “Avoid being a perfect idiot.”

11. On continuing to learn

Munger was asked what matters to him most. He replied, “I think it’s dishonorable to stay stupider than you have to be.”

12. On preparing for opportunity

Buffett was asked why Berkshire Hathaway holds so much cash — never less than $20 billion — and he replied, “You never know when the phone will ring.”

Moral of the story: Make sure you’re ready when the stock market offers you an opportunity you can’t miss.

13. On big-picture thinking

When Buffett was asked whether today’s companies are too short-term-focused, he said, “We don’t ignore yearly earnings, but we don’t live by them.”

Buffett added that he is looking for businesses to be “widening their moat,” or improving their competitive advantage. Essentially, while earnings are important, he wants businesses to be constantly improving, and that doesn’t always immediately translate to bottom-line results.

Insert any personal goal or aspiration, and this applies.

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MONEY Warren Buffett

Warren Buffett Is Wrong About Whole Foods

Berkshire Hathaway CEO Warren Buffett enjoys a Dairy Queen ice cream bar prior to the Berkshire annual meeting in Omaha, Nebraska May 2, 2015. Dairy Queen is a Berkshire Hathaway company.
Rick Wilking—Reuters Berkshire Hathaway CEO Warren Buffett enjoys a Dairy Queen ice cream bar prior to the Berkshire annual meeting in Omaha, Nebraska May 2, 2015. Dairy Queen is a Berkshire Hathaway company.

Buffett’s recent dig at Whole Foods reveals misguided thinking.

[Editor’s note: This post originally appeared at Motley Fool.com; John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool’s board of directors.]

I think the world of Warren Buffett. That’s why I just travelled halfway across the country to soak up his wisdom at the 50th annual Berkshire Hathaway shareholders’ meeting. But despite his incredible track record, the Oracle of Omaha occasionally makes an investing mistake – and I believe he’s making one now with Whole Foods Market WHOLE FOODS MARKET INC. WFM -0.61% .

Let’s Go To The Videotape

Towards the beginning of the marathon Q&A session, The New York Times‘ Andrew Ross Sorkin asked Buffett if he was concerned that shifting consumer preferences toward healthier diets might endanger the economic moats of Coca-Cola COCA-COLA COMPANY KO -0.05% and Kraft Foods Group KRAFT FOODS GROUP INC. KRFT -0.87% . Here’s how Buffett responded:

I don’t think there will be anything revolutionary. Food and beverage companies will adjust to the expressed preferences of consumers. No company does well ignoring its consumers. I predict that 20 years from now more Coca-Cola cases will be consumed than today. Back in the late 1930s, Fortune magazine ran an article saying the growth of Coca Cola was over. When we bought stock in the 1980s, people were not enthused about [Coca-Cola’s] growth.

I am probably one-quarter Coca-Cola [big laugh from audience]…. If I had been having broccoli and brussel sprouts, I wouldn’t have lived as long. I would have approached every day like going to jail… Charlie [Munger] and I have enjoyed every meal we’ve ever had except when my grandfather made me eat those damn greens.

It’s amazing how durable [consumer brands are]. Berkshire Hathaway was the largest shareholder of General Foods from 1981 to 1984 – that’s 30-plus years ago. It was bought by Philip Morris and spun out as Kraft. Those same brands are popular today. Heinz goes back to 1869. The ketchup came out in the 1870s. Coca-Cola dates to 1886. It’s a pretty good bet that a lot of people will like the same things.

When I compare drinking Coca-Cola to something they would sell me at Whole Foods, I don’t see a lot of smiles on the faces of people at Whole Foods.

Right Answer, Wrong Approach

Buffett’s conclusions about the future of Coca-Cola and Kraft are probably correct. While consumer preferences have been shifting toward healthier fare, sugary and processed foods are still very popular and will likely remain so for the foreseeable future. And even if a wholesale change in consumer behavior does occur, Coca-Cola and Kraft are capable of adapting. Both companies have the scale advantages, distribution platforms, and marketing muscle to ensure their brands remain relevant for decades to come.

For me, the real issue was Buffett’s rationale. I sensed several behavioral biases that could be causing him to make a suboptimal investment decision.

Survivorship Bias

It’s true that Coca-Cola and Kraft successfully fought off challenges in the 1930s and 1980s. But so did Eastman Kodak, General Motors, and Woolworth’s. Competitive conditions are constantly evolving, and a company’s success several decades ago may not be a valid predictor of its ability to fend off competitors today. By focusing only on those companies that survived, Buffett may be overestimating Coca-Cola and Kraft’s odds of continued success.

Liking Bias

Buffett clearly enjoys Coca-Cola, both as a consumer and a shareholder. Furthermore, he is friends with many of the company’s executives, and his son Howard sits on Coca-Cola’s board of directors. These favorable feelings may make it challenging for Buffett to view the company objectively. We saw evidence of this phenomenon in action last year, when Buffett abstained from voting against an executive compensation program that he viewed as excessive.

Projection Bias

But for me, the biggest flaw in Buffett’s thinking concerned the parting shot he took at Whole Foods.

Because Buffett eats like an unsupervised six-year-old, he incorrectly assumes that most consumers share his eating preferences. This fallacy is probably supported by his choice of dining partners, including Munger, who plowed through an entire box of peanut brittle during the shareholder meeting. But I’ve been to the Omaha Whole Foods, and I saw a store full of happy customers buying premium-priced organic produce. Buffett’s bias against healthy eating is likely causing him to underestimate the appeal of Whole Foods’ brand.

So, Should Berkshire Buy Whole Foods?

There are legitimate reasons not to invest in Whole Foods. The grocery business is intensively competitive, with thin margins and no barriers to entry. Buffett knows this firsthand, as his grandfather owned a grocery store in Omaha where Buffett and Munger both worked as young men. Furthermore, Berkshire recently lost $444 million by investing in Tesco, the leading grocer in the U.K.

But Whole Foods is not your typical grocery store. As the largest retailer of natural and organic foods in the U.S., Whole Foods is commonly perceived by consumers as offering healthier and higher-quality fare. Thanks to its strong brand, Whole Foods can charge premium prices for its products, which enables the grocer to post atypically high sales per square foot, gross margins, and return on invested capital.

Whole Foods possesses many of the characteristics that Buffett loves to see when evaluating investments. It has strong and sustainable competitive advantages, a clean balance sheet, a dedicated and shareholder-friendly management team, and attractive growth prospects. With a P/E ratio of 30, shares don’t appear especially cheap at the moment, but this strikes me as a reasonable price for such a high-quality business. If Buffett could look past his hatred of healthy eating, I suspect he might agree.

TIME Food & Drink

Here’s What New Coke Tasted Like

Can of New Coke beverage. (Phot
Al Freni—The LIFE Images Collection/Getty Can of New Coke

Thirty years ago, Coca-Cola introduced what seemed like a fizzling new idea

It was, TIME declared, “like putting a miniskirt on the refurbished Statue of Liberty.”

Thirty years ago, on April 23, 1985, Coca-Cola announced that the company would take an unprecedented step in the ongoing cola wars: changing their formula. The secret formula for the classic soft drink would be locked away in a vault, forever, replaced that May with a sweeter pop designed to appeal to changing American tastes.

Prior to the roll-out, the company boasted that the new flavor beat out the classic (and also rival Pepsi) in taste tests. TIME’s food critic Mimi Sheraton weighed in on the taste too, deciding that the new soda wasn’t all that different:

New Coke seems to retain the essential character of the original version in that it, too, imparts faint cocoa-cinnamon overtones and has a balanced, smooth body with no sharpness or overpowering flavor. However, it is sweeter than the original formula and also has a body that could best be described as lighter. It tastes a little like classic Coca-Cola that has been diluted by melting ice. I have always preferred Coca-Cola to Pepsi, finding the latter much too sweet and thin. Most of all, I dislike the citrus-oil flavor I seem to detect in Pepsi. And though the new Coke approaches the sweetness and thinness of Pepsi, it does not have the lemony aftertaste. Therefore, I still prefer Coke. I suspect that those who have preferred Pepsi will continue to do so.

The change was billed as the first in nearly a century of Coke-making (not including the switch from sugar to high-fructose corn syrup, which wasn’t meant to affect the taste). And, as in natural when such a big change comes along, fans were nervous. Even before the New Coke went on sale, consumers told TIME they were nervous that the company would “ruin a good thing.”

Judging by the world’s reaction to the New Coke, those consumers were right: it was only three months before Coca-Cola gave in and brought back Coca-Cola Classic, bowing to pressure from people who were outraged that an American institution had been altered.

But, though the New Coke story has gone down in history as a business and marketing debacle — the president of Pepsi-Cola was quoted in TIME calling it “the Edsel of the ’80s” — that’s not the whole story.

In fact, New Coke wasn’t actually all bad for the company. Coca-Cola denied that New Coke was an elaborate marketing stunt, though that was a popular theory. Still, even accidentally, it worked. Coke’s stock soared when the classic formula came back and even in those anger-filled months between April and July, sales were good: “In May, Coke sales shot up a sparkling 8% over the same month in 1984, double the normal growth rate,” TIME reported. “Some of the increase included sales of old Coke still on store shelves, but most of it was the new drink.” The following year, when the company celebrated its hundredth birthday, it was with reports of sales that continued to climb.

Still, that didn’t keep New Coke (later called Coke II) from one last bit of infamy before it faded into the supermarket shelf sunset: the drink made it to TIME’s list of the 100 worst ideas of the 20th century — right alongside Crystal Pepsi.

Read more about the New Coke story, here in the TIME Vault: Coca-Cola’s Big Fizzle

TIME film

The Coca-Cola Bottle is Getting Its Own Documentary

Assorted Antique Bottle Caps
Blank Archives—Getty Images An assortment of American soda, juice, and beer bottle caps mostly from the 1950s and early 1960s. Some are flipped-over to show cork backing. (Photo by Blank Archives/Getty Images)

It's the bottle's 100th anniversary

A documentary about the classic Coca-Cola bottle? It’s about time.

Timed to its 100th anniversary, Matthew Miele will produce a documentary this year on the bottle’s history, according to the Hollywood Reporter. The film will focus on the bottle since its invention in 1915 and its influence on pop art, cinema and artists like Andy Warhol.

“When I can hold up a Coca-Cola bottle and ask, ‘is this art or is this commerce?’ and most commonly hear ‘it’s both,’ that sets the stage for an intriguing narrative,” said Miele, who intends to interview personalities and luminaries across various industries.

Coca-Cola has approved the project and will help pay for marketing.

[THR]

TIME faith

How Coca-Cola Became Kosher for Passover

Always Coca-Cola
Cincinnati Historical Society / Getty Images An inspector scrutinizes bottles of Coca-Cola as they pass in front of a piercing light, in Cincinnati, Ohio, in the 1940s

Thanks to the efforts of an Atlanta-based rabbi in the 1930s, Jews keeping kosher for Passover can still drink a Coke

Starting when Passover begins on Friday night, Jews who are keeping kosher for the holiday must forgo foods with wheat, corn and other grains for the eight-day festival, severely restricting their diet. But one luxury is not out of reach: Coca-Cola.

The Atlanta-based soda maker provides a kosher-for-Passover version of its mainstay cola, identifiable by its yellow cap. Unlike most commercial sodas in the U.S. that are sweetened with corn syrup, this concoction uses sugar, helping it pass muster for those avoiding grains—and making it popular among those who say they prefer the flavor.

Hipsters and observant Jews alike are largely indebted to the efforts of one Orthodox rabbi eight decades ago. Rabbi Tuvia Geffen, Lithuanian-born but residing in Coke’s Georgia hometown, noticed that, of all the dietary restrictions of Passover, staying away from the soda was proving particularly difficult for his congregants. Before the holiday rolled around in 1935, responding to popular demand, he investigated the ingredients of the soft drink.

“Because it has become an insurmountable problem to induce the great majority of Jews to refrain from partaking of this drink,” Rabbi Geffen wrote in his rabbinical ruling. “I have tried earnestly to find a method of permitting its usage. With the help of God, I have been able to uncover a pragmatic solution.”

The solution was, it turned out, relatively easy. This was before the use of corn syrup, but the ingredients still sometimes included grain sugars; so Coca-Cola assured Rabbi Geffen that they would exclusively use cane sugar during Passover as well as scrap one other minor ingredient that the rabbi deemed not to be kosher. And with that, Rabbi Geffen pronounced Coke to be kosher.

The dramatic development was announced in a letter to TIME published in the May 13, 1935, issue, sent by one Samuel Glick of Atlanta. Glick was following up on a TIME article about the Jewish Passover celebration that had been published the previous month:

In connection with your interesting article on the celebration of Passover (TIME, April 29), you may be interested to know that, for the first time. Atlanta orthodox Jews were allowed to drink Coca Cola during this solemn season. With the approval of Atlanta rabbis, special Coca Cola bottle caps were stamped with the Kosher symbol and signs denoting the same were displayed in soda fountains. The drink was not altered in any way.

Read the 1935 story about the Passover celebration: Passover and Easter

MONEY Warren Buffett

The One Thing Warren Buffett is Wrong About

Warren Buffett, CEO of Berkshire Hathaway
CNBC—NBCU Photo Bank via Getty Images Warren Buffett, CEO of Berkshire Hathaway

Buffett's personal bias seems to be interfering with his judgment in food stocks.

Warren Buffett cannonballed through the food industry once again this past week, orchestrating a merger of Heinz and Kraft Foods KRAFT FOODS GROUP INC. KRFT -0.87% to create the world’s third-largest food company.

Buffett’s Berkshire Hathaway conglomerate and partner 3G Capital, a Brazilian investment firm, will pay a special dividend to Kraft shareholders worth $10 billion, and Kraft shareholders will own 49% of the new company while Heinz, which was acquired by Buffett and 3G Capital in 2013, will hold 51%.

This is far from Buffett’s first foray into the food business, but the deal seems questionable at a time when more Americans are shunning the packaged processed foods that Kraft is known for such as Velveeta and Lunchables, and its sales have been flat in recent years. Still, Kraft is a typical Buffett target with its portfolio of well-known brands and easy-to-understand business model. Berkshire is also a major holder of Coca-Cola COCA-COLA COMPANY KO -0.05% , and owns Dairy Queen, after acquiring it in 1997.

Buffett is a big personal fan of these brands, and readily admits that he eats “like a six-year old.” He has said he’s a regular consumer of Heinz ketchup, and Dairy Queen. He drinks at least five Cokes a day, regularly munches on Potato Stix, and told Fortune he had a bowl of chocolate chip ice cream for breakfast the day of the interview. Perhaps the octogenarian’s tastes may be clouding his judgement when it comes to his investments in the food world.

Coca-Cola COCA-COLA COMPANY KO -0.05% , for example, was one of the best performing stocks of the 20th century, but as soda consumption has fallen in the last decade, the stock has languished in recent years. Over the last five years, it’s returned 44%, against the S&P 500’s 74%, while in the last two years Coke is down 1%, compared to a 32% gain for the broad-market index. As long as people are turning away from soda, Coke’s prospects look poor.

In 1997, Buffett bought Dairy Queen for $585 million. At the time, it had 6,200 restaurants under its banner. Nearly 20 years later in 2014, it has only grown to about 6,500. As a minor subsidiary, Berkshire doesn’t break down Dairy Queen’s financial performance, but its average sales per store was just $659,000 in 2013, below most major fast-food competitors. Growth in individual stores has also significantly trailed the industry. In that time, McDonald’s, for example, has grown from about 23,000 restaurants worldwide to over 35,000. Fast casual chains have boomed as Chipotle Mexican Grill went from a handful of stores in 1997 to a valuation north of $20 billion today. Buffett may have gotten a good price for Dairy Queen, but the business is past its prime.

Heinz has only been under Buffett’s auspices for less than two years, but sales have been falling recently.

Like the recent Duracell deal, Kraft is yet another low-growth company with a strong brand. 3G has shown a knack with such businesses before, applying its playbook of cost-cutting and international expansion to ramp up profits. It worked with Anheuser Busch-InBev, and Heinz managed to grow profits last year. The group is now trying to pull the same trick with Restaurant Brands International, the result of the merger of Burger King and Tim Horton’s.

That may be the saving grace in the deal for Kraft, but the $10 billion dividend still seems like a generous gift for a company with flat sales that was valued at $35 billion before the deal was announced. If 3G can wring more profits out of Kraft, then perhaps the deal will pay off, but the business itself — with its products losing shelf space to organic competitors — looks weak. For a master of the deal like Buffett, the merger may pay off, but a Heinz-Kraft stock looks unappetizing for the average investor.

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