I’ve watched in fascination over the past couple of years as German conglomerate Joh. A Benckiser has been quietly buying up the world’s leading coffee brands, acquiring Caribou Coffee for $340 million, Peet’s Coffee & Tea for $974 million, and my personal obsession, Douwe Egberts for $9.8 billion, among others. The firm is the personal holding company of one of the richest and most secretive families in Europe, the Reimanns. They still have a ways to go – Starbucks, J.M. Smucker’s (Folgers), McDonald’s, and Nestlé are giants – but the mass consolidation is curious.
These folks have huge stakes in a lot of the biggest brands in the world, including a major ownership position in publicly traded Reckitt Benckiser, which makes Lysol, French’s Mustard, Woolite, Durex, Dr. Scholl’s, and a host of other brands found in homes across the world.
Their capital allocation record appears impressive – back in the early 1990′s, they paid Pfizer $440 million to buy Coty, which they rebranded and grew into one of the world’s premier fragrance companies, manufacturing scents for a cadre of the world’s top fashion houses and A-List celebrities. They also own makeup giant Philosophy, which cost them around $1 billion.
If you’re a fan of hidden empires, you might want to add these folks to your case study files. It’s a rare thing for a single fortune to survive this long. Normally, heirs do something stupid along the way, or it is largely lost to taxes or donated through charitable gifts. I’m not sure it’s a good thing, to be honest. The older I get, the more I become convinced that any inheritance beyond the fourth generation is immoral, which would require a far greater explanation and justification than I’m willing to provide at the moment. I’m finishing Lost World, which I read today after completing its predecessor, Jurassic Park, yesterday. After that, I have a few things left to cross off my agenda before I call it a night.