Well, I got to bleep this out, but and he's extremely multi-billionaire.
Extremely multi-billionaire.
Sam, I have here in front of me a letter that I need to read for you. So I open the mail and I see an invitation like this to a graduation. And I think, that's not my cousin, that's not my nephew. Who is this? Dear Shawn, my name is Quinton Wood. I've been listening to MFM since 2021. Over the last 5 years, you and Sam's podcast has made a huge impact on my life, shaping how I see the world, investing in stocks, my goals, my life. Your podcast brought me a lot of joy and helped me through long runs and study sessions. You and Sam have directed my life for the better, so thank you. I'm a high school senior this year, and because of the profound impact you've made in my life, I want to invite you to my graduation and graduation party. He lives in Colorado. Thank you for taking the time to read this and everything you do. Keep making more episodes. Sincerely, Quinton Wood, high school senior. Isn't this amazing?
Baller. Congrats, Quinton.
How good is that, man? I love this kid.
If you're under the age of 24, you should do some of these things that might sound insulting, like we said that's endearing or I would never say that's cute, but like you feel like that emotion. You should 100% embrace doing those things because you can only get away with this for a very small time, and it's totally appropriate and totally awesome.
It's like pooping your pants. You can only do it for so long. [laughter]
Well, then we could do it like later in life, but like you like this type of stuff 100% is awesome.
And by the way, okay, a bunch of people have written, but just inviting to the high school graduation is so endearing. I just thought. I was like, 'Oh, that's so wonderful.' And Diego was like, 'So, we're going to go?' I was like, 'No, hell no. We're definitely not going.' But I will play him the song and give him the clap. This is great.
Okay, I want to tell you about this business story that to me this is a billy of the week. So, this is a billionaire family that I found really fascinating. I've been into these like family dynasties. Last week I think we were talking about Cargill. And this one is...
Wait, can I want to try and guess these? I like trying to guess.
Let me give you a couple of clues so you know which direction you're going. The richest man in Italy.
Yeah. Roche, Roche, is it called Roche something? For Ferrero Roche.
Yeah. So, okay. Well, you got that pretty quick.
It's a lot less fun when you just know the answer, huh? If I was a teacher, I would just be like, 'Well, fine. Teach yourself then.' And walk out of the classroom.
Dude, this family story is amazing. So, I love Ferrero Roche the chocolate. I don't know if you're a fan? Do we have one? Oh, here. So, for those who don't know, I have some here. Got this from the grocery store this morning because I was so inspired by these guys. I was like, 'I'm going to go support their small business.'
He's worth 32 billion dollars. So, these chocolates are kind of amazing. The packaging is amazing. If you've ever had one of these, you really feel like you're eating something special. And that got me kind of interested in like, 'What's the back story of this?' Turns out this family invented Nutella. They invented Tic Tacs. They invented like a whole bunch of Kinder, the Kinder bars and Kinder eggs. They invented like several of these like really big things. And now they own a whole bunch of other businesses. So, I want to tell you the story of this company that's one of the most secretive family-owned businesses in the world. They do like $20 billion a year in revenue. The founder, the main guy, the heir, he runs the company and is the richest man in Italy. And the way they did it is really fascinating. So, back in the day, this was right after World War II, Italy, which was like, you know, not in great shape post-World War II, it was trying to kind of bounce back. And so, this guy, the grandfather of this guy, he decides, 'I'm going to start making chocolate.' Chocolate was really expensive. It was like this luxury item. It wasn't like a common thing you found at every store. Not everybody was eating it. And so, he starts and he had the form factor wrong. He was trying to make a bar like a spread. So, it's like butter. It would be like this kind of hard chocolate like butter stick essentially. And his idea was like people would put this on toast and you'll have like a chocolatey toast.
And I think at the time like chocolate was like the equivalent of caviar. Like if you went to like a fancy dinner party, you would see it. And if I remember correctly, I don't even think it tasted nearly like it tastes now. It wasn't like...
They've just added butter and sugar over the years to the mix. It's like because if you have like a cacao bean or cacao powder, it's like bitter. It's like very bitter, right? So, you really have to like butter and sugar it up. So, he tries the bar. People don't like it. They're complaining. They're like, 'It's too hard. Doesn't spread easily.' So, he's like, 'Okay, I got to solve the spread problem.' And he comes up with a jar with like a creamy chocolate, like a jam basically. And it's like a precursor to Nutella. It wasn't quite Nutella yet. But the idea was like make it super spreadable, put it in a jar. And it was called Supercrema. And so, he starts trying to sell Supercrema and it's doing okay. He's like the chef and he's just trying to make like delicious pastries basically. And he's got the brother who's the business side. And they're doing all right, not great. But, over time, the son takes over. And the son is a bit more of an innovator. So, first, I think the government bans the use of Crema in the name, so he's got to rebrand it anyways, and he decides to call it Nutella. And hazelnuts are a big ingredient for the thing, and he tweaks the recipe, makes it better, and the son starts innovating. He gets in the lab, and he basically creates, he notices that breath mints are great, but there's all these problems. They come in these like big tins, hard to carry around, right? It's like a big giant rectangle. To open it up, you had to like kind of find the seam and pop it open, and then, you know, if you wanted to like share it with somebody, they had to like dig through, touch all of them. And so, he creates the Tic Tac form factor. So, way easier to open, smaller box, smaller form factor, and the ads were all like one person's hand out, and then putting a Tic Tac in. And it was basically like a Tic Tac was almost like a social gift. It was a social icebreaker, something you want from somebody else. So, carrying it was almost like a thing of power.
These old Tic Tac ads are so good. If you Google vintage Tic Tac Italian ads, the old ads are like pretty awesome.
A lot of the ads would have a question mark, which you would not normally do. You wouldn't say, Tic Tac, question mark, but the whole thing is basically it's an offer to somebody else. And it's just a way to be smooth. It's small talk for the mouth.
Was Tic Tac the original name?
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Yeah, so Tic Tac was a brilliant name also, and it starts getting used in movies because the name is just like fun to say. And then he's like, you know, we've talked about Touchland soap, this woman who sold this company for I think $800 million or something recently. And what she does is she took Purell like hand sanitizer, this utilitarian ugly product, and she made it look like women's perfume and it came in different scents and it was all hand sanitizer, but you know, it's something small you'd want to carry in your purse that looked cool, smelled great, and didn't have like, you know, change of just competed in a different dimension than hand sanitizer. Not trying to kill more germs per second, but say your hands aren't going to smell like ethanol at the end of this, right? So then you have the Ferrero Rocher packaging where it's like these golden nuggets, these special things that are put into this. And so just brilliant all around in terms of how they did the marketing genius behind some of these things. And so the brand takes off. It's doing really really well. He's an innovator. And now they're super secretive. I think up until four or five years ago they had never done an interview. They had never let anyone into the factory. It was like on some real Willy Wonka. You know, it was like the one journalist who got in was like, 'This is actually less like Willy Wonka, it's more like Area 51.' There was armed guards. Because they build their own machinery to produce the chocolate. So they didn't want anyone to know the engineering behind their machinery, the recipes behind Nutella. They didn't want to know anything and they weren't really even using it for marketing purposes. Like the grandfather, all the photos of him you'll see he's wearing dark sunglasses. He just never wanted to be seen, never wanted to be known. And so it only very recently did they start doing anything.
And so then you have the grandson, the third gen. So gen one was kind of like the pioneer trying to make it happen. It was sort of like, you know, pioneers or what is it, settlers get slaughtered then the settlers do whatever then the townspeople build the empire. It's kind of that same thing. So, you know, he didn't really make it but the son had the breakthrough innovations and then that guy's son took on a totally different strategy. He went Warren Buffett. He was basically like, all right, inventing these products really hard, really expensive, really low hit rate. What if we went and found value brands that we could turn around? And so he went and bought Butterfingers and Baby Ruth and Crunch and like all these brands, acquired them, tried to revitalize the brand and then bring them back. And so he's built this portfolio of other brands now and he took like an M&A approach and I just thought, what's the Italian word for private equity? Because that's what these guys...
This is some beautiful private equity that I've been seeing in play here for the last...
80 years.
I bought a Butterfinger last night. I freaking love Butterfinger. I feel old but I eat them. I did. I bought the...
And Sam having a Butterfinger or what?
I went to the CVS and I got the movie style. You know how they like put movie style candy like in the box with like mini Butterfingers. I totally had a whole box to myself last night. So I'm on board with this guy.
I don't like Butterfinger. Love Crunch. Baby Ruth. By the way, not named after Babe Ruth.
No. It's named after Ruth Cleveland, daughter of President Grover Cleveland.
Oh, is Babe Ruth the baseball player named after her then?
Dude, you can't have two Babe Ruth. I mean that's like there's not like...
I don't know how they got away with that. This is pretty awesome. Why are you fascinated by this topic? Because it's clearly a trend.
Well, I have all these like themes. So one is like huge businesses hidden in plain sight is always something that's interesting to me. So like, you know, I've been eating this but I never took the time to think 'Who made this? What's the story of this? Why does this packaging look so different than any other product in the entire store? And why don't more people do this? How can you apply this marketing principle to another category?' Like I just can't believe people aren't doing that. So that immediately my brain starts firing and I start fantasizing about these products I'm going to create before I remember I'm already rich. I don't want to work and I have just way too much work to do any of that, but if somebody ever did it, you know, kudos to them. And then I start thinking about...
Wait, really quick. Rory Sutherland who we had on, he talked about what's the name of the soda that has the piece of foil on top? You know, the Italian also Italian actually.
You're close. Pella something. It starts with a P and it's a...
That lemonade-y type thing, right?
A lemon flavored Italian soda. Is it San Pellegrino? Okay. I thought San Pellegrino was also water, but this is like San Pellegrino like soda.
And he was explaining how the tin over it, he's like that's a really small thing, but they did it to be like this can is extra clean and special. It's...
He was explaining the importance of something fairly insignificant in the grand scheme and he was explaining the psychology behind it and that really got me thinking and you're describing the exact same thing with the candy. It's wrapped in like a gold tin. And I was thinking about that a lot. I guess it's another Italian company pulling it off.
Yeah, so I love the marketing mind. That's always a fascinating thing. I love businesses in plain sight. I'm always a sucker for, you know, the rich man in Italy and I'm like, 'Sure don't.' You know, tell me like this is going to be an interesting story. And then I am also interested in these kind of family dynasty businesses because I think it's the businesses that really withstand the test of time, they have to do like several miracles and one of the great miracles is that it has to get passed down to somebody who doesn't screw it up. And what I thought was kind of cool, there was a story about one of the generations. I don't know if it's the current one. By the way, I'm opening one of these up. I don't know if it's the current one or it's the middle son, but he said something like he didn't even realize they were rich until he was like 15 years old. He's like, 'I had no idea. They kept that from me.'
It's like the four housekeepers didn't tip you off.
So I don't know exactly how that was possible, but you know, that apparently there was something in the upbringing where I think they just spent so much time actually working in the factory and on the product that it wasn't clear, like there was more about the work and the craft than it was about the prizes.
That's awesome. I would love to, I listened to a, the reason I know very little about it, but I know some about it is because Founders, the Founders podcast, he did an episode on the family. And it's a pretty old one, so I listened to it a while ago. But it would be curious, I would be curious to see like...
You ever like to listen to Founders without the research? MFM, we're here for you.
While you're stuffing your face with food, which is like, that sounds great on a mic. Let me hear you chew.
This 9:00 a.m. chocolate is hitting the spot.
Dude, I had Sweethearts for breakfast, so I feel you.
Fasting, but you intermittently eat a Ferrero Rocher while [laughter] you're fasting.
I would, I want to know like the family dynamics. I'm so curious. I think that like the stories of Succession, the movie or the TV show and like the drama, I don't think that is actually the common thing. I think that like there is a way where you could be like harmonious and loving and also like good at this whole business thing. And it's just less interesting to write or read about that or make a movie or TV show about it.
