Buffett’s tentacles

The ‘billionaire next door’ makes out like a bandit in the Sacramento region

Warren Buffett has his tentacles all over Sactown.

Warren Buffett has his tentacles all over Sactown.

illustration by chad crowe

While Sacramento is located 1,357 miles from the headquarters of Berkshire Hathaway, the nearly $300 billion-in-assets conglomerate operated by Warren Buffett, the Oracle of Omaha has a lengthy, octopuslike reach.

It isn’t obviously apparent, but the 79-year-old third-richest man in the world is a major presence in and around Sacramento.

He’s at 2426 Fruitridge Road, 8341 Folsom Boulevard, 3341 Arden Way and 3101 Marysville Boulevard in north Sacramento, as well as 4545 Manzanita Avenue in Carmichael. Each address is a Dairy Queen, a company owned by Buffett since 1997. There are some 6,000 outlets around the world; 99 percent are franchises.

SN&R happened to be present earlier this month at Buffett’s annual shareholder meeting in Omaha, Nebraska, and heard the billionaire asked why not all Dairy Queens served Coca-Cola products. He said that most do—“the enlightened ones”—but that Berkshire Hathaway has no control over the franchisees.

“Keep asking for Coke, and maybe you will cause them to see the light,” Buffett told the questioner.

Why the concern over Coke? Every time someone drinks a Coke, Sprite, Fanta, Dasani water, Pibb Xtra, Minute Maid lemonade or any of the other 3,300 drinks under the Coca-Cola banner, Buffett and his shareholders reap 8.6 percent of the profit.

Buying Fruit of the Loom underwear at one of four Toys“R”Us stores in the greater Sacramento area or the three Kmarts, 10 Targets or 13 Walmarts? That’s money in Buffett’s pocket who, in a video spoof shortly after he bought the bankrupt company in 2002, said he would turn it around with his new advertising jingle: “We cover the asses of the masses.”

Buffett can also be found at 2033 Arden Way. That’s the regional office of Geico, the auto insurer with the $800 million gecko-centered annual advertising budget which now has an 8.1 percent market share—up from 2.5 percent 14 years ago.

Easter, end of the year or one of those Hallmark holidays in between, there’s a huge smile on the Berkshire chairman’s face as he visualizes the endless lines at 2220 J Street, 1009 L Street, Arden Fair, Sunrise Mall, Promenade at Sacramento Gateway, Country Club Plaza, Laguna Pavilion and the Rancho Cordova Q.D. Shop on Folsom Boulevard, where it hardly seems possible there’s enough See’s Candies to meet demand.

There’s a reason—other than taste—Buffett and Berkshire’s vice chairman, 86-year-old Charles Munger, chomp on See’s peanut brittle during the annual meeting, washing it down with Diet Coke as they field questions from financial reporters and the audience for the better part of five hours.

Pick out a pair of Justin Boots at Joe Hassans Work & Western Wear or Boot Barn, both in Elk Grove, and guess what? Cha-ching. Elsewhere on the footwear front, purchasing pairs of Double-H Boots, Softspots, Dexter, Matterhorn, Corcoran, Browning Footwear, Brunswick, Carolina or any of the other six brands of the H.H. Brown Shoe Company is very pleasing to Berkshire shareholders.

Every hugalicious, cuddly Garanimal bought at a Sacramento-area Walmart buttresses the Buffett bottom line.

Sacramento—actually Rocklin, just off Highway 65—is site of the first RC Willey home furnishings store in California, a 135,000-square-foot edifice whose ribbon cutting Buffett attended in 2006. “Testing, Testing. One million. Two million. Three million,” Buffet said at the event, tapping on the microphone.

At Emigh Ace Hardware at 3555 El Camino Avenue—and the other Ace Hardware stores in Sacramento, Carmichael, Roseville, Granite Bay, Greenhaven, Elk Grove or the rest of California, for that matter—Benjamin Moore paint is offered for sale. Yup, them, too.

Guess who’s at 3890 Truxel Road, 5825 Auburn Boulevard, 4711 Laguna Boulevard in Elk Grove and 501 Vernon Street in Roseville? These carpeting and flooring retailers offer Shaw Industries products, a wide range of both residential and commercial flooring. Buffett has owned the company since 2002.

Renting office or home furniture at 1508 Howe Avenue? Add Cort Business Services to the list.

Buffett is even part of the weekly trip to Safeway, Savemart, Raley’s, Bel Air, Nugget, Whole Foods, Corti Brothers and Taylor’s Market.

Buy A1, Grey Poupon, Jell-O, Oreos, Crystal Light, Chips Ahoy, Nilla wafers, Planters nuts, Oscar Mayer, Cheese Nips, Cool Whip, Philadelphia cream cheese, Kool-Aid, Ritz crackers or anything bearing the name Kraft and Berkshire and its shareholders pocket 8.8 percent of the profit.

Use Downy fabric softener, Cascade dishwashing detergent, Charmin toilet paper, Duracell batteries, Pampers, Tampax, Pepto-Bismol, Crest toothpaste, Zest or Ivory soap, Gillette razors, Max Factor makeup or Head & Shoulders shampoo, and Buffett, as owner of 2.9 percent of Procter & Gamble, pockets a nice chunk of change.

At 1 percent stock ownership, it’s not as big of a nut, but sales of Tylenol, Listerine, Band-Aids, Caladryl, Neutrogena, Neosporin, Splenda and Johnson & Johnson’s famous baby powder all bulge Buffett’s billfold.

Carry a Wells Fargo home mortgage or line of credit? A checking or savings account at one of their five Sacramento branches? The better the bank does, the bigger the payout for Buffett’s 6.5 percent share of their stock.

And, lest somehow all these intersections are avoided—or even if they aren’t—any purchases made with an American Express card send 12.7 percent of the company’s profits to Omaha.

Maybe this is why CNBC calls Buffett “The Billionaire Next Door.”