See's Candies

# See's Candies **See's Candies** is the legendary California confectioner that has become the benchmark for quality businesses in the Berkshire Hathaway portfolio. ## The Acquisition Berkshire acquired See's Candies in 1972 for $25 million. At the time, this seemed like a steep price for a small candy company. It turned out to be one of Buffett's best investments. ## The Business See's sells premium boxed chocolates through its retail stores, primarily on the West Coast. The business has several attractive characteristics: ### Pricing Power See's has been able to raise prices consistently over the decades without losing customers. Consumers don't comparison shop for See's—they buy it for the quality and brand. ### Low Capital Requirements The business requires minimal reinvestment. Profits can be distributed to Berkshire rather than being reinvested in the business. ### Brand Loyalty See's has built enormous brand loyalty over its 100+ year history. Customers associate See's with quality and tradition. ## The Lesson See's taught Buffett an important lesson: it's better to buy a wonderful company at a fair price than a fair company at a wonderful price. Before See's, Buffett focused on buying cheap businesses ("cigar butts"). See's showed him the power of quality. ## Conclusion See's Candies remains the benchmark against which Berkshire evaluates potential acquisitions. Its combination of pricing power, low capital requirements, and brand loyalty represents the ideal business.