Lindy’s Law – or the ‘Lindy effect’ as it is also known - states the longer something without an expiry date has existed, the more likely it is that it will be around for years to come. It was the brainchild of an astrophysicist from Princeton University who analysed Broadway and off-Broadway shows. He found – with 95% accuracy – that the longer a show had been performed, the longer it would continue to run.

His theory proved applicable beyond the realms of Shakespeare and musical theatre. For example, books that have been published for a long time will likely still be in print for many years.

The Comgest team became aware of this phenomenon when we analysed the performance of a company we sold several years previously. Founded in 1866, Nestlé is home to more than 2,000 food and beverage brands; including Cheerios, Häagen-Dazs, Nespresso and Perrier. While growing less quickly in the years following our exit, the Swiss conglomerate continued to achieve consistent, high-single-digit earnings growth. As a result, Nestlé has not only been able to increase its market share but has also undertaken share buybacks and issued generous dividends.

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