In April 2017, at the Brazil Conference hosted at Harvard and MIT, Warren Buffett sat onstage beside a lean, silver-haired man twelve years his junior and told a story about time. It went like this: Years earlier, at a Gillette board meeting, Jorge Paulo Lemann had confided to Buffett that he was selling his bank. Buffett asked if he was happy. Lemann said he was — because he didn't want to be somebody running a Goldman Sachs. He'd much rather be like Buffett. Why? "You have better control of your time, you have a better sense of humor, and you're much richer."
Buffett, who rarely lets a compliment pass without returning it in some unexpected denomination, responded by pulling out a small appointment book — his calendar — and leafing through it. Page after page: blank. "Look at how rich I am," he said. "I don't have much to do. I only do what I like and I only do it with my friends. So I'm very, very rich."
Lemann told the audience his wife still complained: How come you don't have as much time as Warren?
The anecdote has the shape of a parable — the two richest men in any room, one Brazilian and one American, defining wealth not by what they've accumulated but by what they've declined to schedule. But the joke carried a blade. By the time Lemann retold it onstage, in the spring of 2017, his datebook was anything but empty. He and his partners were orchestrating simultaneous campaigns across the global consumer-goods industry: running the world's largest beer company, integrating Kraft with Heinz, managing Burger King and Tim Hortons through Restaurant Brands International, and — most audaciously — preparing a $147 billion bid for Unilever that would collapse within days of becoming public knowledge. Time, love, and Heinz ketchup — the things, Buffett might say, that money can buy but not quite control.
What is Jorge Paulo Lemann? He has been called Brazil's richest man, a terrified dinosaur, the Goldman Sachs of Rio de Janeiro incarnated as a single human being, and — by the workers whose plants his companies closed — something considerably less flattering. He is a Swiss-Brazilian who grew up on Copacabana, played tennis at Wimbledon, set off fireworks in Harvard Yard, was nearly expelled, finished his degree in three years instead of four, built an investment bank that Credit Suisse would buy for $675 million, assembled the largest beer company on the planet through a chain of mergers spanning four decades and five continents, and then, in the second act, turned to the American pantry — ketchup, mac and cheese, Velveeta, Oscar Mayer, Maxwell House — and tried to do it all over again. The second act did not go as well as the first. This is the more interesting story.
Part IIThe Playbook
Jorge Paulo Lemann built the largest beer company in the world, co-created the Kraft Heinz Company, and assembled a consumer-goods empire spanning four continents — then watched portions of it stumble, and spent his eighth decade publicly reckoning with the limits of his own method. The principles below are drawn from the full arc: the triumphs, the humiliations, and the hard-won revisions.
Table of Contents
1.Copy ruthlessly, then out-execute the original.
2.Build the budget from zero. Every year.
3.Hire for hunger, not credentials.
4.Make your best people owners.
5.Use the proof of concept as a launchpad, not a destination.
6.Choose partners you don't need to negotiate with.
7.When the formula stops working, say so publicly.
Austerity is a tool, not an identity.
In Their Own Words
I always say, to have a big dream requires the same effort as having a small dream. Dream big!
We can do much bigger things together than by ourselves.
— Interview with Jim Collins
You need a common agreement that everyone can agree is the 'big dream'.
— Interview with Jim Collins
I really believe in having people that are better than you around you is worth it.
— Interview with Jim Collins
The ability to get along with others is an amazing skill.
— Interview with Jim Collins
I've tried to do things better and learn. That's the most important characteristic for success.
Kraft Heinz is a much better company with all these outsiders.
— Yale School of Management, November 9
You have to keep the culture you have but bringing in new perspectives is important.
— Yale School of Management, November 9
Here I was, 26 and broke and having to start again.
I have learned that the ethics of the so-called markets can be different from what we think.
The ethics of the so-called markets can be different from what we think.
By the Numbers
The 3G Empire
$21.1BEstimated net worth (Bloomberg, 2024)
$52BInBev acquisition of Anheuser-Busch (2008)
$28BHeinz acquisition value including debt (2013)
~$63BKraft-Heinz merger value (2015)
$15BKraft Heinz goodwill write-down (2019)
$675MCredit Suisse acquisition of Banco Garantia (1998)
3,000+Scholarships funded by the Lemann Foundation
The Cheese Merchant's Son
Jorge Paulo Lemann was born on August 26, 1939, in Rio de Janeiro, into a household that was Brazilian by latitude and Swiss by temperament. His father, a Swiss immigrant, had come to Brazil to run a dairy business — cheese, of all things, which gives the later ketchup and beer empire a certain symmetry. His mother was Brazilian, connected to the cocoa trade. The family occupied a social stratum common to a certain kind of Latin American immigrant household: comfortable enough to afford ambition, cosmopolitan enough to look beyond national borders, but not so established that anything was guaranteed.
The boy grew up on the beach. Rio in the 1940s and 1950s was a city of extravagant natural beauty and casual danger — the surf at Copacabana could kill you as easily as delight you — and Lemann took to the waves with the kind of recklessness that would later characterize his approach to leveraged buyouts. A story, told and retold in Brazilian business circles, holds that as a teenager he rode a thirty-foot storm wave that should have drowned him and emerged with a conviction that risk was the price of being alive. Whether the wave was really thirty feet is beside the point. The point is that Lemann believed it was, and that the lesson he extracted — you cannot learn to take risks except by practicing, practicing — became the closest thing he had to a personal philosophy.
He was good at tennis. Very good. Five-time Brazilian national champion. He competed at Wimbledon. He played Davis Cup for Brazil and, at various points, for Switzerland. He won the Swiss nationals in 1962 and, decades later, the International Tennis Federation's world veteran tournament three times in the over-45 and over-50 categories. Tennis taught him what surfing had already suggested: that competition is a dialogue with your own limits, not a conversation with your opponent. But it also taught him something harder. He quit professional tennis when he realized he would never be a top star. The capacity to abandon a pursuit in which you are very good — not terrible, not mediocre, but genuinely accomplished — because you will not be the best at it: this is a rarer quality than most people imagine, and it runs through Lemann's career like a minor key.
Fireworks in Harvard Yard
In 1958, at seventeen, Lemann was accepted to Harvard to study economics. This was, as he later acknowledged, considerably easier for a Brazilian applicant than it would become. ("In my day it was one or two every two or three years. I can imagine that someone back then would have said: 'Wow, there are never any Brazilians here; let's be friends with this one. Who knows, he might improve our tennis team.'") His first year was, by his own account, horrible. He was freezing. He missed the beach. He was unaccustomed to studying, unaccustomed to writing in English, and his grades were poor.
On the last day of that first year, Lemann decided to celebrate by setting off cabeças de negro — Brazilian fireworks — in Harvard Yard. The students loved it. The administration did not. He was caught throwing a firework out a window, and when he returned to Brazil for the summer, a letter followed: the university recommended he take a year off "to mature a bit."
Here was a fork. Lemann was already ambivalent about college, ready to enter what he called "the real world." But the family pressure was enormous — he had to graduate. He examined the letter carefully and noticed it recommended a leave of absence but did not demand one. So he went back. And he developed a system: he interviewed students who had already taken each course, identified the easiest path to graduation, and discovered that all previous exams were archived in the library. He finished the remaining three years in two. The degree was earned in 1961.
He would later describe this as "obviously the wrong decision" — not the return to Harvard, but the rushing. "I could have learned so much more," he said in a speech years afterward. The regret is genuine but also, one suspects, slightly performative. Lemann learned exactly what he needed at Harvard: not economics, but the principle that institutions have rules and rules have seams, and a sufficiently determined person can move through the seams faster than anyone expects.
The Goldman Sachs of Brazil
What followed was a period of searching. Lemann worked briefly as a journalist for Jornal do Brasil. He trained at Credit Suisse in Geneva, where he encountered something that would shape every business he subsequently built: the percentage incentive model — a compensation structure in which earnings were tied not to seniority or salary but to the performance of the investments you managed. Rather than a fixed paycheck, you got a stake.
He returned to Brazil. He joined a small finance company. It failed. "Here I was, 26 and broke and having to start again," he told students at Yale decades later. The failure was instructive less for what it taught about finance than for what it taught about recovery: the competitive spirit that had driven him through thirty-foot waves and two-year degree programs could be redirected, again and again, toward the next thing.
In 1971, during a Brazilian stock market euphoria, Lemann placed a newspaper ad: "Brokerage wanted." He was thirty-one. He assembled a handful of partners and bought a seat on the exchange. The firm was called Garantia.
It nearly died at birth. The market crashed almost immediately after Garantia opened its doors. But Lemann had done enough — barely — to survive, and survival in a crash has a way of educating you more thoroughly than any boom. Over the next two decades, he built Garantia into what the Brazilian business press and later the international press would call "the Goldman Sachs of Brazil." The comparison was not idle. Garantia adopted Goldman's partnership model, its meritocratic culture, its willingness to reward the ambitious and discard the merely competent. Lemann studied Goldman the way a chess player studies grandmaster games — not for the specific moves but for the positional logic.
Two men emerged from the Garantia system who would become Lemann's lifelong partners. Marcel Herrmann Telles, born in 1950, a Rio native who shared Lemann's appetite for competition and cost discipline. Carlos Alberto Sicupira — known as Beto — born in 1948, an entrepreneur with a reputation for blunt operational intensity and a gift for extracting performance from people who didn't know they had it in them. Together, the three became known in Brazil as "the Three Musketeers," a nickname that suggests swashbuckling romance but understates the methodical, nearly monastic quality of their actual approach.
We are copiers, actually. Most of the stuff we've learned has been from Jack Welch, Jim Collins, from GE, from Wal-Mart. We've just copied and tried to do it better.
— Jorge Paulo Lemann
The Garantia model was straightforward: hire people who were, in Lemann's private taxonomy, "PSD" — poor, smart, and with a deep desire to get rich — pay them low base salaries with enormous performance-linked bonuses, evaluate ruthlessly on a 20-70-10 curve borrowed from Jack Welch's General Electric (top 20% promoted, middle 70% retained, bottom 10% fired), and make the best performers partners. The culture was intense, competitive, and deliberately uncomfortable. It attracted a type: young, hungry, male, allergic to waste, willing to work with a ferocity that their peers at Brazil's older, more genteel financial institutions found slightly alarming.
In 1998, after suffering heavy losses in the Asian financial crisis, Lemann sold Garantia to Credit Suisse First Boston for $675 million. The bank was gone. But the people it had produced — the alumni of its culture — were about to reshape the global consumer-goods industry.
From Brahma to Budweiser
The beer story begins, as many Lemann stories do, with copying someone else's idea and executing it with more discipline than the original.
In the late 1980s, while still running Garantia, Lemann and his partners acquired Cervejaria Brahma, Brazil's largest brewery. The company was bloated, inefficient, and run in a manner that offended every principle the Three Musketeers held sacred. They installed their own people. They cut costs with the kind of enthusiasm that others might reserve for religious observance. They introduced what would become the defining management technique of every 3G enterprise: zero-based budgeting.
The concept is less exotic than it sounds, and more radical than it appears. In a conventional budget, last year's spending is the baseline — you argue about increments. In zero-based budgeting, the baseline is zero. Every expense, every department, every line item must be justified from scratch, every year. Nothing is inherited. Nothing is sacred. "You want something, you need to make a case for it," as one 3G executive later explained. The effect is psychological as much as financial: it creates a permanent state of institutional anxiety in which no manager can assume the continuation of anything — not their team, not their budget, not their job.
Brahma, under 3G management, became lean and profitable. Then they acquired rival Antarctica and merged the two to form Ambev, which controlled the majority of Brazil's beer market. Then, in 2004, Ambev merged with Belgium's Interbrew to form InBev, instantly creating one of the world's largest beer companies. And then, in 2008, came the move that made Lemann a global figure: InBev's $52 billion acquisition of Anheuser-Busch, the maker of Budweiser — perhaps the most American of all American brands.
The Anheuser-Busch deal was hostile in spirit if not always in technical designation. The old Busch family had run the company for generations with the baronial confidence of midwestern royalty: corporate jets, lavish executive perks, a SeaWorld theme park, a Clydesdale stable. The 3G team, led by Carlos Brito — a Garantia alum whom Lemann had handpicked — walked into St. Louis and began cutting with the same blank-eyed efficiency they had brought to Brahma. Fourteen hundred jobs were eliminated, 75% of them in St. Louis. The corporate jets were sold. The Clydesdales survived, but not much else did.
AB InBev became, in the words of trade press, "a profit- and margin-generating machine." It was, by the standards of the private equity world, a triumph. By the standards of St. Louis, it was something closer to an occupation.
🍺
The Beer Merger Chain
How a Brazilian brewery became the world's largest beer company
1989
Lemann, Telles, and Sicupira acquire Cervejaria Brahma
1999
Brahma merges with rival Antarctica to form Ambev
2004
Ambev merges with Belgium's Interbrew to create InBev
2008
InBev acquires Anheuser-Busch for $52 billion, forming AB InBev
2016
AB InBev acquires SABMiller for ~$100 billion
The One-Page Deal
Jorge Paulo Lemann and Warren Buffett met on the Gillette board — the exact year neither has publicly specified with precision, though it was likely in the early 2000s. They liked each other but didn't talk much; board meetings were, as Buffett put it, "fairly well-scripted in terms of time." The relationship simmered. Buffett would later call this "one of the larger mistakes in my life" — not that they met, but that they didn't team up sooner.
The partnership crystallized in Colorado, around 2009. As they walked to a plane, Lemann mentioned Heinz. "Sounds good to me," Buffett replied. Sometime later, Lemann sent over two pages: one of financial terms, one of governance terms. Buffett didn't change a word. The deal was done the way Buffett liked to do deals — with people he trusted, on a handshake plus a single sheet of paper.
The Heinz acquisition was announced on Valentine's Day 2013, valued at $23 billion (or $28 billion including assumed debt). Berkshire Hathaway and 3G Capital co-invested, but the division of labor was clear: Buffett provided the capital and the legitimacy — the reassurance to the American public that these Brazilians were friendly — and 3G provided the operators.
The operators arrived fast. Bill Johnson, Heinz's CEO of fifteen years, was replaced by Bernardo Hees, a 3G partner. Hees gave his first speech to the top fifty executives at a leadership conference in San Francisco, then summoned most of them, one by one, into a separate room. Eleven of the top twelve learned they no longer had jobs. Within a month, 350 of the 1,200 full-time positions at Pittsburgh headquarters were eliminated, plus another 250 elsewhere in North America. The replacement hires were younger, leaner, drawn from inside the 3G system or from other 3G-managed companies.
It's our kind of company. It's got a group of fantastic brands led by ketchup. The company started in 1869 with horseradish.
— Warren Buffett, 2013
The idea of waste, within the 3G cosmology, was not merely imprudent but sinful — the word James Fontanella-Khan of the Financial Times used, and it captures something about the almost religious intensity of the 3G approach to overhead. Color photocopiers were banned at Burger King under 3G management. Canteen budgets were renegotiated. Corporate travel was ruthlessly scrutinized. The philosophy was Franciscan in its austerity and Calvinist in its conviction that frugality was a sign of moral seriousness.
The Blueprint Consumes Kraft
Heinz was the proof of concept. But 3G had never intended to stop at one brand. While the ketchup company was being optimized, a team of young analysts in New York — mostly in their twenties, working with the meticulous intensity that the 3G system bred — were already scouting the next target. They studied truck counts at factory gates, analyzed packaging efficiency, modeled margin expansion scenarios. They were, in the words of one observer, "great financial engineers."
They landed on Kraft.
The merger was announced in 2015. All told, through the Heinz vehicle, Buffett and 3G picked up Kraft at a combined enterprise value of nearly $63 billion. The new entity — the Kraft Heinz Company — became the third-largest food and beverage company in North America, holding brands that constituted a kind of inventory of the American middle-class refrigerator: Maxwell House coffee, Velveeta, Philadelphia cream cheese, Oscar Mayer, Jell-O.
For a private investment firm to pull off a transaction of this scale was, as Fontanella-Khan noted, "kind of insane." Buffett was indispensable — not only for the cash but for the cachet. The distinction mattered. When American workers in Allentown, Pennsylvania, or Madison, Wisconsin, heard that their companies had been acquired, and that Warren Buffett was involved, many assumed the news was good. Rod Miller, a sixty-one-year-old worker at the Kraft Heinz plant in Allentown who had spent most of his career making Italian and Russian dressings, told the Financial Times that he and his colleagues had thought Buffett would save their jobs. "It turned out not to be like that," Fontanella-Khan reported. "It turned out that Warren Buffett is a very good capitalist."
The 3G playbook at Kraft followed the same arc: new management (Bernardo Hees installed as CEO), aggressive cost reduction, factory closures, workforce cuts. From the time 3G took over Heinz through the Kraft integration, a fifth of the combined workforce was laid off. Seven plants were shuttered. The Oscar Mayer plant in Madison, Wisconsin — once the city's largest employer, with over 4,000 workers at its peak — was scheduled for closure after ninety-eight years of continuous operation. When the last workers left in 2017, the fifty-acre site was estimated to be worth somewhere between negative $10 million and negative $20 million, factoring in the environmental remediation it would require.
But the margins. The margins were extraordinary. Kraft Heinz achieved the highest profit margins of any major consumer company — by a lot. Wall Street was enraptured. If you were invested in any other consumer company, your investors would tell you: You need to copy those guys.
The $147 Billion Embarrassment
Success creates a particular kind of blindness. When a formula has worked for three decades across beer, burgers, and ketchup, the temptation to believe it will work everywhere becomes almost irresistible. In early 2017, Kraft Heinz — acting on 3G's ambitions — made an approach to Unilever, the Anglo-Dutch consumer-goods colossus whose portfolio spanned everything from Dove soap to Ben & Jerry's ice cream.
The bid was staggering: $147 billion. It would have been one of the largest corporate acquisitions in history.
Unilever, under CEO Paul Polman, embodied a very different philosophy — what Fontanella-Khan called "a more gentle form of capitalism," focused on sustainability, stakeholder value, and the kind of brand investment that 3G's zero-based budgeting tended to view as fat. From 3G's perspective, this made Unilever an ideal target: there was, in their estimation, a great deal of inefficiency to extract. From Unilever's perspective, 3G's approach represented an existential threat to everything the company stood for.
The Financial Times broke the story. The reaction was swift and hostile. "We kind of probably killed the deal," Fontanella-Khan later reflected. Unilever's board, its employees, its European political allies, and a large portion of public opinion mobilized against what was rapidly framed as a hostile bid — barbarians not at the gate but already inside the garden.
What made it worse was Buffett. The Oracle of Omaha, who had built his public persona on the principle of friendly dealmaking — folksy, patient, avuncular — publicly distanced himself. "I don't think it's evil or anything to conduct a hostile offer for a company," he said in a carefully worded statement. "It's just we won't do it." The implicit rebuke was devastating. One wonders, as Fontanella-Khan did, whether the distancing was entirely sincere: Buffett sat on the Kraft Heinz board at the time, and the question of how much he knew in advance remains, at minimum, an interesting one. "Buffett cares a lot about his image," the FT reporter observed. "He's a shrewd investor."
Kraft Heinz withdrew its bid. Lemann, according to people close to him, was not happy. It was, as Fontanella-Khan put it, "incredibly embarrassing. They're not used to failing."
The Terrified Dinosaur
The cracks, once they appeared, multiplied with the speed that cracks in load-bearing structures tend to exhibit.
In the same quarter the Unilever bid collapsed, Kraft Heinz earnings missed expectations. The share price fell. In 2018, Buffett announced he was stepping down from the Kraft Heinz board — a move that, despite public denials of tension between the partners, was widely read as a vote of diminished confidence. Then, in April 2018, at the Milken Institute Global Conference in Los Angeles — the annual convocation of mainly male, mainly white financiers that functions as a kind of Davos for the American capital class — Lemann made a rare public appearance and said something that nobody in the audience expected to hear from the most feared corporate operator on the planet.
"I'm a terrified dinosaur."
He elaborated. He had attended a food industry session where all anyone could talk about was new products, new production methods, new consumer preferences. He had been disrupted. The cost-cutting playbook that had generated industry-best margins for three decades had, it turned out, extracted value not only from overhead but from the brands themselves — from marketing, from innovation, from the capacity to evolve alongside consumers who were increasingly demanding organic options, craft alternatives, sustainability commitments, and a relationship with the companies that fed them that went beyond "the cheapest possible product at the widest possible margin."
The confession was startling precisely because Lemann spoke publicly so rarely. "When you don't speak that often," Fontanella-Khan noted, "every word that you then say publicly counts."
What followed was the trifecta. In February 2019, Kraft Heinz reported fourth-quarter 2018 results that included a $15 billion goodwill write-down on the Kraft and Oscar Mayer brands, an SEC investigation into procurement accounting practices, and a dividend cut. The JP Morgan analyst on the earnings call said the quiet part out loud: Is it at least some evidence starting to point to the idea that the 3G belt-tightening strategy went too far and damaged brands?
A few days after the earnings call, Buffett appeared on CNBC and delivered the epitaph: "We overpaid for Kraft."
The Apology at Harvard
In May 2020, speaking at the annual Brazil Conference at Harvard-MIT, Lemann gave what amounted to a public reckoning. The setting was fitting — the university that had nearly expelled him six decades earlier for the fireworks incident, where he had learned to find the seams in institutional rules, was now the stage for an admission that some rules could not be circumvented.
His words, as reported by multiple attendees, were unusually direct for a man who had spent a lifetime cultivating discretion:
"About 30 years ago, more or less, we bought Brahma, and the first 25 years were very, very successful; return on equity and everything was exceptional. Then, these last five or six years, we haven't done as well, and I think a lot about why we haven't done as well. We had a formula which was to attract very good people, pay them very well, manage things very efficiently, keep expenses down, have a big dream and everybody driven in that direction. And we sort of missed out a little bit on two things. We missed out on being more consumer centric — the whole world has become consumer centric, the consumer has many more options — and we remained with our focus on producing things efficiently."
The second omission was talent. 3G had relied for years on a brotherhood of Brazilian managers — the Garantia alumni and their intellectual descendants — dispatched around the world to run businesses in countries they didn't know, in industries they hadn't studied. (One Brazilian executive was reportedly relocated from managing a struggling railroad in southern Brazil to become CEO of Burger King.) For years, this had been a feature, not a bug: 3G's people were interchangeable because the system was the product, not the individual. But as the consumer landscape shifted, the system needed people who understood digital distribution, social media marketing, data analytics — skills that the old PSD recruits, however driven, often did not possess. And increasingly, Brazil's best graduates were turning their backs on 3G altogether, preferring entrepreneurial tech startups to the bruising, "macho" culture that had once been the country's most prestigious employer.
The AB InBev acquisition of SABMiller in 2016 for roughly $100 billion compounded the problem. It was so large that it taxed the management capacity of the entire system. AB InBev's stock underperformed rival Heineken for years afterward.
The Americanas Reckoning
If the Kraft Heinz humiliation was a stumble, the Americanas scandal was a blow to the foundation.
Americanas is a Brazilian retail chain — 1,700 stores selling everything from electronics to snacks — in which Lemann, Telles, and Sicupira had held stakes since 1982. It was, in a sense, one of their first investments, predating the beer empire, predating 3G Capital, predating everything. In January 2023, a new CEO named Sergio Rial — formerly the head of Santander in Brazil, a figure of impeccable financial establishment credentials — resigned after only nine days on the job. The reason: he had discovered a $4 billion accounting hole.
The fraud, as the Financial Times subsequently detailed, involved a common but opaque Brazilian retail practice: banks would pay Americanas' suppliers in advance, with the company responsible for repaying the loans plus interest. These interest payments, however, had been effectively camouflaged, not classified as financial debts. The result was years of overstated profits and a flattering balance sheet that bore diminishing resemblance to reality.
Americanas filed for bankruptcy protection. Its stock plunged more than 85%. BTG Pactual, the Brazilian investment bank, took the unusual step of launching a personal attack on the billionaire backers in a court filing: "The three richest men in Brazil, with assets valued at R$180 billion, anointed as kind of demigods of 'good' world capitalism, are caught with their hands in the cash register."
Lemann, Telles, and Sicupira issued a statement denying any knowledge of accounting manipulation. "Over the decades, our actions have always been guided by ethical and legal principles," they wrote. They said they were "sorry for investor and creditor losses." The apology was genuine or it was not. What is certain is that the scandal raised a question that had been accumulating force for years: Was the 3G model — obsessive cost discipline, relentless meritocracy, a culture that prioritized results over everything — capable of producing the kind of oversight that catches a $4 billion fraud before it metastasizes? Or was the very intensity of the system, its worship of efficiency and speed, a reason that inconvenient truths could go unexamined?
The Drop in the Ocean
There is another Lemann, less discussed in the financial press, who deserves attention — if only because the philanthropist complicates the portrait of the cost-cutter in ways that resist easy resolution.
In 2002, Lemann established the Lemann Foundation, a family-based philanthropic organization registered in Switzerland and based in São Paulo, dedicated to improving public education in Brazil and developing leaders committed to social transformation. The foundation's mission sits at the intersection of Lemann's deepest convictions — that people are the most important asset of any enterprise, and that Brazil, despite being one of the world's wealthiest nations by GDP, ranks among the most unequal. Forty-eight percent of Brazilian children cannot read at the age of ten. At the country's current rate of improvement, it will take 260 years to reach rich-country reading scores. Afro-Brazilian students are 2.5 times more likely to be illiterate than their white peers.
The foundation has funded more than 3,000 scholarships and fellowships for Brazilian students at Harvard, Stanford, Columbia, the University of Illinois, MIT, Oxford. It endowed chairs and centers for Brazilian studies at four universities. It facilitated the trials of the AstraZeneca COVID-19 vaccine in Brazil, funding the clinical research that proved the vaccine's efficacy and then helping to build domestic production capability through a partnership with Fiocruz, Brazil's largest vaccine manufacturer.
"Before founding the Lemann Foundation, I believed that fulfilling my entrepreneurial calling was enough to repay Brazil for the opportunities it had afforded me," Lemann has written. "However, I came to the conclusion that I could go further, taking my big dreams beyond the corporate world. Even though its efforts are only a drop in the ocean of all that must be done to address Brazil's current needs and challenges, I believe it will be a meaningful drop."
A drop in the ocean. It is the kind of phrase that in most mouths would sound like false modesty. In Lemann's — a man who had never been satisfied with small dreams, who had built the world's largest beer company because he could not tolerate being merely the largest in Brazil — it sounds like something closer to genuine bewilderment at the scale of the problem. The man who could squeeze a margin out of ketchup production cannot squeeze illiteracy out of a nation of 207 million people. The tools are different. The timeline is longer. And the results cannot be measured in quarterly earnings.
We support a Brazil that believes in its people so people can believe in Brazil.
— Jorge Paulo Lemann, Lemann Foundation
A Monastery on Copacabana
Here is the paradox at the center of Jorge Paulo Lemann's story, the thing that does not resolve.
He is, by every account, personally austere — not flashy, not ostentatious, an "old-world financier" who dresses simply, drives (or once drove) cheap cars in Brazil to avoid kidnapping attempts, and maintains a level of privacy that borders on the pathological. He has lived in Switzerland since 1999, reportedly after a threatened kidnapping of his children. He rarely gives interviews. He does not cultivate a public persona. The 3G culture he built — open offices, no perks, relentless measurement — is, as one observer put it, "much more Swiss than Brazilian." In a country famous for color, for joy, for carnival, Lemann transmits what Fontanella-Khan called "a sense of nearly monastic austerity."
And yet the empire he built was fundamentally about consumption — beer, burgers, ketchup, mac and cheese. The most exuberant, least monastic products imaginable. He made his fortune selling the ingredients of weekend barbecues and Super Bowl parties to people who would never, in a thousand years, confuse frugality with virtue. The ascetic was a merchant of pleasure.
The tension goes deeper. Lemann's management philosophy rests on the belief that people are the most important asset — that finding, training, and keeping good people is "a constant and permanent struggle." He has spent decades building systems designed to identify exceptional talent and reward it with partnership. But the same systems, applied to companies like Kraft Heinz, resulted in the elimination of thousands of jobs held by people like Rod Miller — the sixty-one-year-old dressing maker in Allentown who, standing in the snow outside a job center, told the Financial Times he didn't believe in the system anymore.
Jim Collins, the Good to Great author who has been friends with the Three Musketeers since meeting Lemann at a Stanford executive program in the early 1990s, wrote in his foreword to Cristiane Correa's Dream Big: "If anyone would have told me then that these bankers had the dream to build the biggest beer company in the world, and to buy Anheuser-Busch along the way, I would have said, 'That's not a vision, that's delusion.' Yet, of course, that's exactly what they did."
Delusion and vision are, perhaps, the same thing viewed from different moments in time.
At Yale in 2021, Lemann told students that Kraft Heinz had become "a much better company" since hiring 25 of its top managers from outside the 3G pipeline. He now believed that 20% of any company's workforce should come from outside the organizational culture. It was a quiet repudiation of one of the central tenets of his career — the idea that the system could produce all the talent it needed. The system, it turned out, had limits. Like every system. Like every person.
His wife still asks him why he doesn't have as much time as Warren Buffett. The datebook, one imagines, remains full.
8.
9.Bring in outsiders before your culture calcifies.
10.Dream big — but know when to quit tennis.
11.Invest in systems that outlast you.
Principle 1
Copy ruthlessly, then out-execute the original.
Lemann has never pretended to be an original thinker. "We are copiers, actually," he told an audience. "Most of the stuff we've learned has been from Jack Welch, Jim Collins, from GE, from Wal-Mart. We've just copied and tried to do it better." The Garantia model was Goldman Sachs, transposed to Rio de Janeiro. The 20-70-10 evaluation system was pure Welch. The partnership structure was borrowed from American investment banks. Zero-based budgeting was not invented by 3G — it was merely applied with a ferocity that its originators might have found excessive.
The insight is that innovation is overrated relative to execution. Most competitive advantages come not from inventing a new concept but from implementing an existing one with more discipline, more speed, and more consistency than anyone else is willing to sustain. Garantia did not invent meritocratic compensation; it simply enforced it more literally than any Brazilian firm had done before. AB InBev did not invent cost-cutting; it simply refused to stop.
Tactic: Identify the best-in-class operating model in an adjacent industry, adapt it to your context, and execute it with an intensity that the original would find uncomfortable.
Principle 2
Build the budget from zero. Every year.
Zero-based budgeting is the most famous — and most misunderstood — tool in the 3G arsenal. It is not simply a cost-cutting measure. It is a cultural statement: nothing is inherited, nothing is permanent, and the burden of proof always falls on the person requesting resources, never on the person denying them. The baseline is not "what we spent last year minus 5%." The baseline is nothing.
At Heinz, this meant that every expense line — from executive travel to office supplies — had to be justified annually from scratch. At Burger King, it meant banning color photocopiers. At AB InBev, it meant a relentless annual ratchet on every category of overhead. The psychological effect was as important as the financial one: it created a permanent state of institutional anxiety, a culture in which complacency was structurally impossible because the ground beneath you was rebuilt each budget cycle.
The method worked spectacularly for two decades. Its failure mode — which Lemann himself eventually acknowledged — is that it treats innovation, marketing, and brand investment as costs to be justified rather than as investments to be nurtured. When consumer preferences shift, the company that has starved its marketing department and its R&D pipeline discovers it has no capacity to respond.
Tactic: Implement zero-based budgeting as a discipline for overhead and discretionary spending, but explicitly exempt strategic investment categories (brand building, R&D, talent development) from the same framework.
Principle 3
Hire for hunger, not credentials.
Lemann's preferred hire was what he called "PSD" — poor, smart, and with a deep desire to get rich. The label is blunt to the point of discomfort, but it describes a real selection criterion: people whose ambition is existential, not recreational. The Garantia system, and later the 3G system, was designed to attract these individuals by offering low base salaries with enormous performance-linked upside — stock options and bonuses that could make a young analyst wealthy if the company performed.
This approach generated extraordinary loyalty and intensity. Bernardo Hees, who became CEO of Kraft Heinz, came up through the 3G system. Daniel Schwartz, who became CEO of Restaurant Brands International, was another product. Carlos Brito, who ran AB InBev for years, was handpicked by the Three Musketeers. The system was a talent factory — but a narrowly calibrated one, optimized for a specific type of operator.
Its limitation, as Lemann would later concede, was that the PSD profile — aggressive, operationally minded, comfortable with the macho culture — was increasingly out of step with the skills required in a consumer landscape reshaped by digital marketing, data analytics, and shifting social expectations. Brazil's best graduates began choosing tech startups over 3G. American MBAs rejected the culture as hostile. The pipeline that had produced world-class operators was producing fewer of them, and the wrong kind.
Tactic: Define your ideal hire not by résumé characteristics but by motivational intensity — then audit that definition every five years to ensure it still matches the skills the business actually needs.
Principle 4
Make your best people owners.
The Garantia model, inherited from Goldman Sachs, rested on a single structural insight: if you make the best people equity partners, their interests align permanently with the enterprise. They stop thinking like employees and start thinking like owners. They tolerate lower base compensation because they have skin in the game. They hold each other accountable because their partners' performance affects their personal wealth.
Lemann extended this principle beyond the investment bank into every operating company 3G acquired. Key managers at AB InBev, Heinz, Kraft, and Burger King were given equity stakes that could make them genuinely wealthy — but only if the company performed. The effect was a self-reinforcing cycle: owners worked harder, which improved results, which attracted more talented people who wanted to become owners.
"We want partners, not merely shareholders," Lemann said. The distinction is real. A shareholder holds a financial instrument. A partner holds a psychological stake.
Tactic: Structure compensation so that your top 10–20% of performers have meaningful equity exposure, and ensure that the equity vests on performance metrics, not tenure.
Principle 5
Use the proof of concept as a launchpad, not a destination.
3G never acquired a single company to fix and flip. Every acquisition was a proof of concept for the next one. Brahma proved the method could work in beer. Ambev proved it could work at national scale. InBev proved it could cross borders. The Anheuser-Busch acquisition proved it could absorb a cultural icon. Heinz proved the method worked outside beer. Kraft proved it could work at $60 billion scale.
The analysts in New York who studied truck counts at factory gates while Heinz was still being integrated were not conducting academic research. They were running the reconnaissance for the next deal. The 3G model assumed perpetual motion: you optimized the current acquisition, used the resulting cash flow and proven track record to finance the next one, and repeated until you ran out of industry to consolidate.
The model broke when they reached for Unilever — not because the operational thesis was wrong, but because the political and cultural resistance was too great, and because their partner (Buffett) drew a line at hostile bids. The proof of concept had reached its boundary condition: a target that would not consent.
Tactic: Treat every operational improvement as evidence for your next fundraise or acquisition. Build the case file in real time, before the current deal is fully integrated.
Principle 6
Choose partners you don't need to negotiate with.
When Lemann sent Buffett the Heinz proposal, it was two pages: one of financial terms, one of governance terms. Buffett didn't change a word. The deal was structured the way Buffett structured deals with Charlie Munger — on the basis of decades of observed alignment, where the formalities were largely ceremonial because the trust was already total.
This is not an argument against contracts or due diligence. It is an observation that the highest-return partnerships are those in which negotiation is unnecessary because both parties have already converged on values, style, and decision-making frameworks. Lemann and Buffett shared a preference for iconic consumer brands, a belief in management quality as the primary driver of value, and a comfort with concentrated positions in businesses they understood.
The Unilever episode tested this alignment and found its limit. Buffett's public refusal to participate in a hostile bid — regardless of whether he had known about the approach in advance — revealed that value alignment is not the same as strategic alignment. The two men agreed on what made a good business. They disagreed on what constituted an acceptable way to acquire one.
Tactic: Invest disproportionate time in partner selection. The best partnerships are the ones where the term sheet is a formality because the principles were agreed years before the deal materialized.
Principle 7
When the formula stops working, say so publicly.
The "terrified dinosaur" admission at the Milken Conference in 2018 — and the more extended mea culpa at the Brazil Conference at Harvard-MIT in 2020 — were acts of unusual corporate honesty. Most executives in Lemann's position would have deployed euphemisms, blamed macroeconomic conditions, or pointed to temporary headwinds. Lemann said: we missed it. We were too focused on cost cutting and not enough on the consumer. We relied too heavily on our internal talent pipeline. We overpaid for SABMiller.
The strategic value of public honesty is underappreciated. It accomplishes three things simultaneously: it signals to investors that management understands the problem (which is a precondition for fixing it), it gives the next generation of leaders permission to deviate from the old playbook, and it resets expectations in a way that makes any subsequent improvement look like progress rather than recovery.
The risk, of course, is that candor becomes confirmation of decline. Lemann's admission did not prevent the Kraft Heinz stock from falling further. But it did create the intellectual space for the pivot that followed under CEO Miguel Patricio — a shift toward brand investment, innovation, and a more consumer-centric approach.
Tactic: When a strategy plateaus, narrate the failure publicly and specifically before pivoting. Vague reassurances erode credibility; precise diagnoses build it.
Principle 8
Austerity is a tool, not an identity.
The most dangerous moment in any operational philosophy is when the tool becomes the identity — when the organization confuses the method with the mission. 3G's zero-based budgeting was a tool for extracting efficiency from bloated organizations. It was extraordinarily effective for this purpose. But when it became the defining characteristic of the 3G brand — when "lean and mean" was not a phase but a permanent condition — it began consuming the very value it was supposed to protect.
⚖️
The Cost-Cutting Paradox
Where the 3G method created value — and where it destroyed it
Cut marketing budgets that sustained brand relevance
Standardized operations across acquired companies
Reduced R&D investment in product innovation
Generated industry-best margins in mature categories
Failed to invest in emerging consumer categories (organic, craft, health)
Created a culture of accountability and measurement
Generated a culture of fear that repelled top talent
The JP Morgan analyst who asked, on the 2018 earnings call, whether the belt-tightening strategy had "gone too far and damaged brands" was asking the question that the 3G system was structurally unable to ask itself. A system that treats every expense as guilty until proven innocent will eventually convict the innocent.
Tactic: Periodically audit your core operational method not for whether it's being executed well, but for whether it's still the right method for the current competitive environment.
Principle 9
Bring in outsiders before your culture calcifies.
At Yale in 2021, Lemann offered a specific number: 20% of any company's workforce should come from outside the organizational pipeline. The statement represented a significant revision of his earlier philosophy, in which the 3G system was designed to be self-reproducing — developing all leadership internally, promoting from within, maintaining cultural homogeneity as a competitive advantage.
The new CEO at Kraft Heinz, Miguel Patricio — a former AB InBev chief marketing officer — replaced 25 of the firm's top managers with outside hires. Lemann acknowledged the result: "Kraft Heinz is a much better company with all these outsiders. You have to keep the culture you have but bringing in new perspectives is important."
The lesson generalizes beyond Lemann. Cultures that produce consistent results tend to reproduce themselves — hiring people who think like the founders, promoting people who act like their predecessors, building feedback loops that reward conformity. This is enormously effective until the environment changes, at which point the organization discovers it has optimized for the wrong set of skills and cannot adapt because everyone in the building thinks the same way.
Tactic: Set an explicit target for external hiring at the senior level (Lemann's 20% is a reasonable starting point) and treat cultural diversity of thought as a strategic input, not an HR initiative.
Principle 10
Dream big — but know when to quit tennis.
Lemann's most famous aphorism is: "To have a big dream requires the same effort as having a small dream. Dream big!" The line has become a kind of 3G mantra, repeated in business schools and investment presentations across Brazil and beyond. It captures something real about the psychology of ambition: the cognitive and emotional cost of thinking at scale is not meaningfully different from the cost of thinking small, but the potential returns are orders of magnitude larger.
But the aphorism omits the complementary skill that Lemann demonstrated early and repeatedly: the willingness to quit. He quit tennis when he realized he would not be a top star — not when he was failing, but when he was succeeding at a level that most people would consider exceptional. He quit journalism after a brief stint at Jornal do Brasil. He sold Garantia, the bank he had built over twenty-seven years, when the Asian crisis exposed its vulnerabilities. Each exit was a recognition that the cost of staying in a good position was the opportunity cost of moving to a better one.
The tension between dreaming big and quitting strategically is the central operating paradox of Lemann's career. He dreamed of building the world's largest beer company — and did. He dreamed of creating a global consumer-goods platform — and partially succeeded. He dreamed of acquiring Unilever — and quit when the resistance proved too great. The oscillation between vision and pragmatism, between grandiosity and retreat, is not a contradiction. It is the rhythm.
Tactic: Audit every major commitment annually with the question: "Would I start this today, knowing what I know now?" If the answer is no, begin planning the exit, regardless of sunk costs.
Principle 11
Invest in systems that outlast you.
Lemann is now in his mid-eighties. He has stepped down from the Kraft Heinz board. His public appearances are rare. The Lemann Foundation, with its endowed chairs at four universities, its 3,000-plus scholarships, its investments in Brazilian public education and vaccine production, represents his answer to the question Jim Collins posed at that Stanford executive program three decades ago: "Don't you think that true greatness comes only when you're able to build a company that can thrive far beyond any individual leader?"
Lemann's response, at the time, was resistance. He believed in the centrality of the visionary leader. But Collins's question lodged somewhere and grew. The foundation, the university partnerships, the systematic development of Brazilian leaders for public service — these are not investments in a company. They are investments in a system that is designed, by definition, to outlast its founder.
Whether the 3G empire itself will endure is a different question. The AB InBev-SABMiller combination remains the world's largest brewer, but its stock has underperformed. Kraft Heinz has stabilized but trades well below its merger-era highs. Restaurant Brands International carries on. The management method that defined these companies has been adopted — and adapted — by competitors, diluting its uniqueness. The formula that was once a proprietary advantage is now industry standard.
What persists is the culture. The Garantia alumni network, the 3G partner system, the ethos of meritocracy and ownership — these are, in their way, Lemann's most durable creation. Whether they are sufficient to carry his empire into the next generation, without the animating intelligence of the founders, is the question that will be answered over the next two decades.
Tactic: Identify the one thing in your organization that would disappear if you left tomorrow, and begin institutionalizing it today.
Part IIIQuotes / Maxims
In their words
We had a formula which was to attract very good people, pay them very well, manage things very efficiently, keep expenses down, have a big dream and everybody driven in that direction. And we sort of missed out a little bit on two things. We missed out on being more consumer centric... and we remained with our focus on producing things efficiently.
— Jorge Paulo Lemann, Brazil Conference at Harvard-MIT, 2020
I'm a terrified dinosaur.
— Jorge Paulo Lemann, Milken Institute Global Conference, 2018
The two things you can't buy are time and love. And they're two of the most important things, obviously, in the world.
— Warren Buffett, Brazil Conference, 2017
Something that I always thought college doesn't give is the ability to assess and take risks. It will teach you how to assess risks mathematically or theoretically, but hardly. And in general, it teaches you not to take risks. And I think in life, you have to take risks, and the only way you learn to take risks is practicing, practicing.
— Jorge Paulo Lemann, on risk-taking
Before founding the Lemann Foundation, I believed that fulfilling my entrepreneurial calling was enough to repay Brazil for the opportunities it had afforded me. However, I came to the conclusion that I could go further, taking my big dreams beyond the corporate world.
— Jorge Paulo Lemann, Lemann Foundation
Maxims
Copy the best, then out-execute them. Most competitive advantages come not from inventing a new method but from implementing an existing one with more discipline than its originators.
The baseline is zero. Every expense, every department, every assumption must be justified from scratch — but know where to stop before the discipline becomes destruction.
Hunger is the primary credential. Hire people whose ambition is existential, not recreational — but audit the definition of "hunger" as the world changes around you.
Partners, not employees. When your best people have equity, they stop thinking like staff and start thinking like owners. Alignment follows incentive.
The proof of concept is the pitch deck for the next deal. Every operational improvement is evidence that should be compiled in real time for the acquisition that hasn't happened yet.
Negotiate principles, not terms. The highest-return partnerships are those where the term sheet is a formality because the values were aligned years before the deal materialized.
Admit the failure before the market prices it in. Public candor about strategic mistakes creates space for the pivot; public denial prolongs the decline.
Dream big, quit early. The capacity to abandon a pursuit in which you are very good — not terrible, but genuinely accomplished — because you will not be the best is rarer and more valuable than persistence.
Culture is a factory; factories require maintenance. A self-reproducing culture is an asset until the environment changes, at which point it becomes a liability. Import 20% of your talent from outside the system.
Invest in what outlasts you. The most durable creation is not a company but a culture, a network, or an institution that does not require your presence to function.
