What's going on?

Nestl�s cup doth runneth over: the Swiss food giant reported better-than-expected earnings on Wednesday.

What does this mean?

Nestl� has earned plenty of new fans this year: coffee addicts have been jonesing for their fix of the company�s partnership with Starbucks, while lockdown�s newest pet-owners have been stocking up on its pet food. That might be why the company�s organic revenue � which excludes the effects of acquisitions and currency swings � climbed by a better-than-expected 8% over the first nine months of 2021 versus the same time last year. Nestl� has a good feeling about 2021 as a whole too: it�s expecting this year�s sales to grow at their fastest rate in a decade, and upped its full-year revenue outlook accordingly.

Why should I care?

For markets: Nestl� can charge what it likes.

Nestl� sells products that people tend to buy no matter what, which comes in handy in times of shortage-driven price rises: it can pass the extra expenses onto its customers in the form of higher prices without losing them to rivals. The fact that it upped prices by 2% last quarter and still posted better-than-expected revenue, then, looks like it might�ve impressed investors: they sent its stock up 3% after the announcement.


For you personally: Consumer staples are having a moment.

It�s not just Nestl�s customers paying more: inflation has been spiking all over the world, with data out on Wednesday showing that UK prices were up 3.1% last month from the same time last year. Economists reckon they�ll stay high for most of next year too, especially given rising food and energy costs. And if that�s the case, stocks of consumer staples like Nestl� that can pass on costs and protect their bottom line stand to keep performing well.