Charlie Munger Pointed Out The Extreme Brand Loyalty People Have For Ketchup – 'They Want Heinz! And So You Can Raise The Price Of Heinz'

What makes Heinz ketchup so special that people won't settle for anything else? To Charlie Munger, the answer was simple: it's not just ketchup – it's a brand with unmatched loyalty. And in his view, that loyalty made it a gold mine.

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In one of his final interviews before passing just shy of his 100th birthday, Munger shared his insights on consumer habits during a conversation on the Acquired podcast. Known for cutting through the noise with sharp, practical wisdom, Munger explained how certain products – like Heinz ketchup – have a kind of magic that competitors can't replicate.

"There's something about the flavor of ketchup on a goddamned fried potato," Munger said. "They want Heinz! And so, you can raise the price of Heinz pretty much."

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Think about that. People are so hooked on Heinz that they keep reaching for the same iconic bottle even when prices go up. Munger knew this wasn't just about condiments but the kind of consumer loyalty that makes companies like Kraft Heinz a powerhouse.

Munger is right: People want Heinz and use it far more than other brands. According to Census data reported by Statista, nearly 198 million Americans used Heinz ketchup in a year, compared to just 84 million who chose Hunt's. 

Not all product categories or food staples have the same chokehold on consumers. Munger contrasted Heinz ketchup with another Kraft product: Kraft cheese. While both are household staples, the level of attachment is wildly different. "If you try and raise the price of Kraft cheese," Munger said, "everybody goes into rebellion, including the final customer, the housewife. They don't care that much about whether cheese is Kraft or not."

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But what makes ketchup the exception? According to Munger, it's all about flavor. Ketchup has a taste that people grow up with, rely on and refuse to compromise. He pointed out similar examples worldwide, like in Korea, where one company controls nearly all the major sauce brands. "They get used to it and they like it," Munger explained.

Munger drew parallels to Coca-Cola, a brand that also enjoys extreme loyalty. People don't just buy Coke; they defend it as part of their identity. These brands don't just sell products – they sell trust, consistency and familiarity.

Munger's comments also touched on Costco's famous $1.50 hot dog combo, while others might raise prices, Costco refuses, knowing its value exceeds the numbers. "Anybody else would have raised the price of hot dogs long ago," Munger said. "But they just don't do it. You know how famous it is. You bring your kids and they know they've got something going there that's worth extra money to them and they just don't destroy it."

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This wasn't just a discussion about condiments or hot dogs. These products illustrated a key investing principle for Munger: find businesses with durable competitive advantages. Products like Heinz ketchup and Coca-Cola don't just survive; they thrive because they've earned the loyalty of generations.

So, the next time you reach for that bottle of Heinz, remember: it's not just ketchup. It's a master class in brand power.

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