Cargill

Cargill: America's largest private company, quietly 88% family-owned

Shaan's Billy of the Week is Cargill, America's largest private company for about 40 years. It is 88% owned by one family, has produced more billionaires in a single family than any other company, and brings in more revenue than Goldman Sachs, Nike and Starbucks combined.

“It is the largest private company in America for the last 40 years. It is owned 88% by the family and has produced more fam— more billionaires in one family than any other company ever. They do more revenue than Goldman Sachs, Nike, and Starbucks combined.”

Cargill's 80/20 rule: reinvest 80% of profit, pay 20% to the family

The Cargill family, who own 88% of the company and include roughly 20 billionaires, follow a fixed rule: 80% of profits are reinvested in the business and 20% are paid out as family dividends. For about the last 20 years, professional CEOs rather than family members have run the company.

“And the, and the, basically it's just a family that's that owns this thing, 88% owned by the family. There's like 20 or something billionaires in the family now. They have this rule called the 80/20 rule. So 80% of all profits will get reinvested back in the business. 20 goes out as dividends to the family and they hire— for the last, you know, 20 years or so that they've had professional CEOs running the company. It's not like family run anymore.”

Steal thisSet a fixed payout ratio (for example, reinvest 80% and distribute 20%) so the owners get paid without starving the business of compounding capital.

Cargill's 80/20 rule: reinvest 80% of profit, pay 20% to the family

The Cargill family, who own 88% of the company and include roughly 20 billionaires, follow a fixed rule: 80% of profits are reinvested in the business and 20% are paid out as family dividends. For about the last 20 years, professional CEOs rather than family members have run the company.

“And the, and the, basically it's just a family that's that owns this thing, 88% owned by the family. There's like 20 or something billionaires in the family now. They have this rule called the 80/20 rule. So 80% of all profits will get reinvested back in the business. 20 goes out as dividends to the family and they hire— for the last, you know, 20 years or so that they've had professional CEOs running the company. It's not like family run anymore.”

Steal thisSet a fixed payout ratio (for example, reinvest 80% and distribute 20%) so the owners get paid without starving the business of compounding capital.

One hamburger, end to end: Cargill touches nearly every input

Shaan follows a single hamburger through Cargill's supply chain. Cargill sells the farmer the seed and fertilizer, stores and ships the grain, processes the feed, slaughters and packs the cattle, sells salt to the fast-food chains, and supplies the corn syrup in the ketchup, the soybean oil for the fries and the starch in the milkshake.

“So imagine you eat a hamburger. Cargill probably sold the farmer the seed and the fertilizer to grow the grain. They bought the grain from the farmer and stored it at their grain elevator. They shipped it on their barge that they built in their ships. That they built to a processing plant where it's processed into animal feed. And then they, they feed that to cattle who they then slaughter. They, they then store the meat at their meatpacking plants, sell the beef to the restaurant. By the way, the restaurant has to buy their salt. They sell like all of the salt to all of the fast food chains in the country. And then the corn syrup that they processed out of the corn gets put into the ketchup, the soybean oil that's used for the fries, the starch that's used in the milkshake. That's all Cargill.”

Cargill does $150B a year in revenue

Cargill is a B2B business whose description (it "sells chemicals") sounds vague, and most people can't say what it does. It nonetheless generates about $150 billion a year in revenue.

“I never understood what entirely they did because it's one of those things where you say what they do and it sort of makes sense, but it's like a B2B thing. So like, you don't entirely understand exactly what it does. And they say like they sell chemicals and I'm like, I don't know what that means. You know, that's so, that's so vague. But when you look at the numbers, they do $150 billion a year in revenue. That's just so massive.”