Warren E. Buffett speaks about virtually anything at Berkshire Hathaway‘s annual meeting in Omaha, and this past weekend proved no different. But surprisingly, he took a fair amount of time to praise some of his newest business partners.
Several times during a Q.&A. with investors, he talked up 3G Capital, the Brazilian-founded investment firm with whom he partnered to buy H. J. Heinz for $23 billion last year. And he said he would like to work with them on another big deal.
To learn more, the Berkshire chief recommended that investors read “Dream On,†a book about 3G written by Cristiane Correa, a Brazilian reporter who had followed the firm as it arranged ever-bigger acquisitions: Famously, its brewery rolled up numerous South American competitors, then Interbrew and finally, in 2008, Anheuser Busch for $52 billion.
Though “Dream On†was published last year in Portuguese (an edition that sold 200,000 copies in Brazil), it became available in an English-language version only last month. Primarily available via a Kindle version, the book was sold in the exhibition hall of the Berkshire meeting. And Mr. Buffett’s recommendation apparently carries great weight: Ms. Correa said that she had sold all 300 copies of the book on sale at the meeting.
“I nearly died,†she told DealBook. I wasn’t expecting that at all.â€
She spoke to DealBook about 3G Capital, its business approach and why one of its founders, the billionaire Jorge Paulo Lemann, gets along so well with the Oracle of Omaha. Here’s a transcript of the conversation, which has been condensed and edited for clarity.
How did the book come about?
I’m a business journalist who worked at Exame magazine, one of the largest business publications in Brazil. While I was working there, I wrote about many of the companies in which Lemann had invested.
In 2007, I talked to the for the first time about writing a book. They are very low-key and said no. I tried for four years and failed. Then I decided to go by myself and started writing a book without their cooperation. They didn’t put themselves in the way, but they didn’t cooperate either.
What are the main principles of the 3G way?
Meritocracy is one. It’s very common in America but not in Brazil. They are looking for the best people â€" that’s what people say all the time, but they really do.
Cost-cutting, that’s very important. No expense is too little that it can’t be cut.
Have they always had those principles?
They always had those principles. Some companies change their culture over the years. They never have.
It goes back to the ’70s at Garantia, where cost-cutting was not that important. But when they went to retail, they used Sam Walton and Walmart as an example.
They’re a really sophisticated machine.
Has their growth surprised you?
“They have said they would love to be number one in the world, as a brewery. They had been building it for 20 years.
They first started to consolidate Brazilian market, then buying regional breweries in South America and then Interbrew. When the Anheuser-Busch deal happened, everyone was surprised, but if you had been following them, it made sense.
I think the Heinz deal was more of a surprise. It was not a sector in which they were investing. But the partnership with Buffett put them on a whole other level.
Were you surprised by how much praise Buffett lavished upon them?
He is sort of in love with them. I talked to him two years ago, and he was impressed by how they had done the Anheuser-Busch deal. He didn’t realize they couldn’t find as much room for improvement as they did.
They have gotten closer and closer. He really likes what they’re doing.
What common threads are there between the two?
There aren’t that many things in common between 3G and Berkshire, but there are between Lemann and Buffett. Both are very modest, simple guys. They love what they do and are not in it for the money.
They’re both very rich and they just want to do big things. They also have a management style that is very similar. They trust in people and they let their teams work.
Mr. Lemann is 74 years old. Is he going to retire anytime soon?
I think he’ll do it as long as he can.
3G has a big team, and the companies it owns nowadays operate without Jorge Paulo Lemann. The C.E.O. of Heinz has been working with Lemann for 15 years. Carlos Brito [the chief executive of Anheuser-Busch InBev] has been with them almost 30 years. They operate the companies as Lemann would.
Lemann’s also letting his children occupy some place on the boards of those companies. He’s preparing companies for time that he won’t be around. But I don’t think he has plans to voluntarily stop working.
What’s next for 3G?
There’s been a lot of talk about Coke or Pepsi â€" in Brazil at least. The Heinz deal, no one expected that. I think they can come up with something no one’s thinking of.
They’re going to do another big deal. I would bet on that, that something big’s going to happen.
