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Warren Buffett’s Berkshire Hathaway recently bought the final 20% of Pilot Travel Centers.
The truck-stop chain ranks among America’s biggest companies in terms of revenue and headcount.
Pilot made $55 billion in nine months in 2022, more than Nike or Netflix’s annual revenue that year.
Warren Buffett’s company recently bought out a business that rivals some of America’s largest companies in revenue and headcount.
The famed investor’s company acquired the final 20% of Pilot Travel Centers last week. It likely spent over $13 billion in total to add the truck-stop chain to a stable of subsidiaries that includes Geico, Duracell, and Dairy Queen.
Forbes ranked Pilot as the nation’s fifth-largest private company in 2022, behind only Cargill, Koch Industries, Publix, and Mars in annual revenue. The business raked in an estimated $70 billion of revenue in 2022, based on the $55 billion it generated in the first nine months of that year.
That figure puts it comfortably within the S&P 500’s top 100 companies by revenue for that year, ahead of Boeing ($67 billion) and IBM ($61 billion). Pilot’s revenue likely dwarfed that of corporate giants like Nike ($47 billion), Coca-Cola ($43 billion), Starbucks ($32 billion), Netflix ($32 billion), and McDonald’s ($23 billion) in 2022.
Pilot also employs upwards of 26,000 people — about the same number of workers as Nvidia or Visa, and roughly double Netflix’s headcount. However, that’s a fraction of the size of the workforces at Nike (74,000), McDonald’s (150,000), or Walmart (2.1 million).
Buffett’s latest conquest is strikingly large in terms of revenue and headcount, but it’s worth noting it’s a high-volume, low-margin business. Pilot likely earned under $2 billion of pre-tax income in 2022, given it made only $1.3 billion in the nine months to September 30 that year. For comparison, Nike racked up over $6 billion of pre-tax income that financial year,while American Express made nearly $10 billion.
Moreover, Pilot’s financials weakened considerably in 2023 due to lower fuel prices and sales volumes. Its revenues fell by 23% year-on-year to $37 billion, and pre-tax income tanked by 44% to $702 million, in the first nine months of 2023, Berkshire’s third-quarter earnings show. Those figures put it on track to make about $56 billion and $936 million in profits for the full year.
Pilot probably wasn’t as big a revenue generator last year as it was in 2022. But it’s undeniably formidable in scale, and likely to be a key cog in Berkshire’s money machine going forward.
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Cocaine is set to become Colombia’s top export this year, edging out oil products, according to a note from Bloomberg Economics.
Revenue derived from Colombia’s cocaine business is nearing $20 billion, ahead of the country’s $19.1 billion in 2022 oil exports.
Cocaine production in Colombia is at its highest level since 1991 amid lenient policies from Colombian President Gustavo Petro.
Colombia’s top export is about to shift from oil to cocaine, according to a recent note from Bloomberg Economics.
The shift comes as Colombian President Gustavo Petro keeps a lenient policy towards the coca crop industry in place that dates back to 2013, when the cocaine industry generated just $2.2 billion in export revenues, according to Bloomberg estimates.
Fast forward to 2022, and Colombia’s cocaine industry generated an estimated $18.2 billion in export revenues, just behind oil export revenue of $19.1 billion. With the country’s oil exports dropping 30% in the first half of this year, and its cocaine industry still growing steadily, Bloomberg estimates that 2023 will be the year when Colombia’s cocaine revenues outpace revenues from oil.
Colombia, which is the world’s largest producer of the drug, has seen its cocaine production jump to its highest level since 1991. The country produced 1,738 tons of the drug in 2022, with a total street value of $193 billion.
“From a purely economic standpoint, higher cocaine production and exports have supported short-term activity, domestic demand and external accounts,” Bloomberg economist Felpi Hernandez said.
Instead of attempting to eradicate coca bush farms, as it did in the past, the Colombian government is instead targeting exporters and laboratories that turn the coca leaf into cocaine. That’s led to a surge in crop yields for coca bushes in the past few years, with 230,028 hectares of the plant being cultivated in 2022.
As the country’s drug war shifts from the growers to the producers, the growers are getting more efficient.
“More bushes are reaching their full potential. Producers are also investing in irrigation and fertilizers to boost output and productivity,” Hernandez said. “The average crop yield rose steadily from 4.3 tons of coca leaves per hectare in 2013 to 7.0 in 2020.”
Colombia’s illicit cocaine business represented 5.3% of the country’s GDP last year, Hernandez estimates.
Correction: September 15, 2023 — An earlier version of this story misspelled the name of the country Colombia.
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