Some things you just can’t live without. Consumer staples are products that are essential or that you’re likely to purchase regardless of your personal finances or how the economy is performing. Food, drinks (including alcoholic beverages), tobacco, and household and personal care items are all considered consumer staples.

　　The sector comprises a broad swath of companies that make, market, and sell these goods. If you’re considering investing in the consumer staples sector, knowing its key characteristics and the major players can help you decide which stocks are right for you.

　　What is the consumer staples sector?The Global Industry Classification Standard (GICS) defines the consumer staples sector as those companies that are “less sensitive to economic cycles” because we all need to eat, clean our homes, and practice personal hygiene. Consumer staples—as the name implies—are an integral part of daily life.

　　Consumer staples is one of 11 GICS sectors and composed of six sometimes overlapping industries:

　　Food and staples retailing: Includes retail and big-box stores, drugstores, and food distributors Beverages: Soft drink makers, brewers, distillers, and winemakers Food products: Companies that produce packaged food and meats, and agricultural products like fruits and vegetables Tobacco: Products such as cigarettes, smokeless tobacco, and specialty nicotine products Household products: Items like laundry supplies, cleaning tools, and disposable tableware Personal products: All personal products, including for your hair, skin, teeth, and cosmetics Key characteristics of consumer staplesCompanies in the consumer staples sector produce a wide range of products. Despite the diversity, some key characteristics are broadly shared by many companies in the sector:

　　Essential goods. Companies in this sector make products that are necessary for daily living—like food, household cleaning, and personal care. Stable revenue streams. The companies selling these staple products typically have predictable income streams. Noncyclical demand. Demand for essential products typically isn’t cyclical—meaning that demand doesn’t fluctuate with changing economic conditions. Inelastic demand. Demand for consumer staples is also typically inelastic—it stays generally the same even if product prices fluctuate. Low price volatility. Stocks of consumer staples companies typically have stable prices, keeping price volatility consistently low. Slow growth. Don’t expect stock prices of consumer staples companies to increase rapidly. Slow and steady is the typical growth pattern for these companies. Dividend-paying stocks. The stability of consumer staples companies enables many to pay reliable dividends. Defensive investments. Many investors classify consumer staples companies as defensive investments because they retain value even during economic downturns and recessions.Household names in consumer staplesThe largest consumer staples companies also happen to be some of the best known. These examples of companies in the consumer staples sector may all be familiar to you.*

　　Costco Wholesale Corporation (COST): A big box store with products spanning multiple consumer staples categories, Costco is a diversified bulk retailer of many essential goods.Walmart, Inc. (WMT): Another retailer that sells essentially everything, Walmart sells staples ranging from food and beverages to tobacco, household products, and personal care items.Beverages

　　The Coca-Cola Company (KO): Among the top household names, Coca-Cola is the ubiquitous soft drink known for its iconic logo. Coca-Cola’s other brands of sodas and beverages include Sprite, Fanta, Powerade, Minute Maid, Smartwater, and more.Anheuser-Busch InBev SA/NV (BUD): Anheuser-Busch InBev is among the largest brewers in the world, known for beer brands like Budweiser, Corona, and Stella Artois.Food products

　　WK Kellogg Co (KLG): Kellogg is a famous name in breakfast cereals—they’re great!—but the namesake company that traded for years under the ticker symbol K was rechristened Kellanova in 2023 and now oversees the cracker, frozen breakfast, and meat lines, including Pringles, Eggo, and MorningStar Farms brands. Meanwhile, WK Kellogg, named after company founder W.K. Kellogg, assumed Frosted Flakes, Froot Loops, and the remainder of the cereal business.PepsiCo, Inc. (PEP): Famous for its Pepsi cola soft drink, a rival to Coca-Cola, PepsiCo also produces a variety of food products under Frito-Lay, Quaker Oats, and Doritos brands, among others.Tobacco

　　Altria Group, Inc. (MO): This tobacco company owns Philip Morris USA, the maker of Marlboro cigarettes. Altria also produces smokeless tobacco, cigars, e-cigarettes, and oral nicotine products.British American Tobacco PLC (BTI): British American Tobacco, which owns the Reynolds American tobacco company, produces a variety of tobacco products under brands including Newport, Camel, and Lucky Strike.Household products

　　The Procter & Gamble Company (PG): Among the largest consumer staples companies, you probably know this manufacturer for brands like Tide, Mr. Clean, Gillette, Old Spice, and Febreze.The Clorox Company (CLX): To many consumers, the name Clorox means bleach, but the company also produces household products under the Pine-Sol, Lestoil, and Glad brands, among many others.Personal products

　　Kimberly-Clark Corporation (KMB): Maker of essentials such as Huggies diapers, Kotex feminine products, Kleenex tissues, and numerous other personal care products.The Estée Lauder Companies Inc. (EL): You might know Estée Lauder for its namesake cosmetics, but the company also owns Clinique, Aveda, La Mer, M·A·C, and several other personal care brands.Investing in consumer staplesIf you’re looking to add stocks of companies in the consumer staples sector to your portfolio, it pays to do your research. You can get started by creating a short list based on what interests you and then analyzing companies’ financials and other relevant fundamental factors. When it comes to ways to invest, you have options:

　　Buy stock. You can add stocks of specific consumer staples companies to your portfolio.Buy bonds. Almost every consumer staples company participates in the bond market, giving you plenty of choices to add bonds to your investment portfolio.Invest in an ETF. If you’d rather get exposure to a bundle of consumer staples companies, then buying shares in an exchange-traded fund (ETF) is a viable option. Funds like the Vanguard Consumer Staples Index Fund ETF (VDC) or Invesco Food & Beverage ETF (PBJ) provide targeted sector exposure.Buy shares in a mutual fund. If you’d prefer to invest in a fund that’s actively managed, then a mutual fund focused on consumer staples may be an attractive option, such as the Fidelity Select Consumer Staples Portfolio (FDFAX) or T. Rowe Price Global Consumer (PGLOX).Each of these investing options offers advantages and disadvantages. Evaluate which investment types are best for your financial goals, and then conduct research to identify specific stocks, bonds, or funds that appeal to you.

　　The bottom lineMany consumer staples companies benefit from customers with deep brand loyalty—but that tells you only part of the sector’s story. Demand for consumer staples products stands out for being remarkably noncyclical, demonstrating the stability that can arise from producing essential products. But if you’re considering investing in a consumer staples company, don’t assume the investment is safe. Do your homework to understand the company fundamentals before making any portfolio decisions.

　　*Specific companies and funds are mentioned for educational purposes only and not as an endorsement. The lists in this article are representative and not intended to be comprehensive.