Oct 14, 2014

Warren Buffett rolls out the Berkshire Hathaway brand

Warren Buffett plans to license the Berkshire Hathaway name to estate agencies in Europe and Asia, in the next phase of a campaign to turn his widely respected investment company into a consumer brand.

After decades buying into some of the most valuable brands in the world, Berkshire has this year dramatically expanded the use of its own name, rebadging its family of utility companies, US estate agents and a newly acquired car dealership group.

Marketing consultants and company insiders believe the group is sitting on a valuable asset in the Berkshire Hathaway brand, which they say taps into 84-year-old Mr Buffett’s reputation for financial acumen and longevity.

“Like Virgin reflects Sir Richard Branson’s rebelliousness and Apple reflects the genius of Steve Jobs, Berkshire Hathaway has brand equity around trust, stability and integrity,” said Oscar Yuan, partner at consultancy Millward Brown Vermeer.

The number of US estate agencies using the Berkshire Hathaway HomeServices brand will swell to almost 1,400 by next spring, said Earl Lee, chief executive of HSF Affiliates, a franchising joint venture between Berkshire and Brookfield Asset Management.

The company will then shift to looking for partnerships with big players in parts of the US where it is not yet strong, including the Midwest, and internationally, including the UK, continental Europe and Asia.

“The values of trust, customer service and longevity are important characteristics for people who are making the largest single financial investment they will ever make,” Mr Lee said.

“We are proud to carry the Berkshire Hathaway brand and we understand the obligation.”

Revenues in the Berkshire division that includes the real estate business jumped 26 per cent to $1.2bn in the first six months of this year, according to a company filing. HomeServices of America, the property broker owned by Berkshire, and HSF Affiliates have been rebranding their existing network since 2012.

The Van Tuyl car dealership chain that Berkshire acquired for an undisclosed sum earlier this month – the fifth largest in the US with over $8bn in annual sales – plans to continue making acquisitions after being rebranded Berkshire Hathaway Automotive, it said at the time of the deal.

Meanwhile, the holding company for Mr Buffett’s utilities, including MidAmerican Energy and PacifiCorp, was this year renamed Berkshire Hathaway Energy to reflect, it said at the time, “the benefits we gain from Berkshire Hathaway’s ownership”.

Berkshire has a substantial interest in 10 of the top 100 most valuable brands in Millward Brown’s latest annual BrandZ survey, reflecting Mr Buffett’s penchant for enduring names such as Coca-ColaAmerican Express and Walmart. As he wrote in his 2011 letter to shareholders: “‘Buy commodities, sell brands’ has long been a formula for business success.”

Berkshire Hathaway was the name of the now defunct textiles company Mr Buffett acquired in the 1960s.