Input Costs +1.3% w/w, +5.0% y/y, Packaging & Energy Reverse as Softs Tailwinds Ebb; HSY+, LW+, MDLZ+, EPC-, PG-

By Jonathan Feeney and David Schick and David Katzman and Jack Hermann Published on June 18, 2026 PDF

The Optimal Advisory Cost Factor was up slightly this week but decelerated on a y/y basis for the third straight week after accelerating for 15 consecutive weeks since the breakout of the Iranian conflict. Costs are up (+5.0% y/y), roughly 15% from their pre-conflict February lows.

Cost tailwinds to watch: Softs/Sweeteners down -28.2% y/y, Meats/Proteins –27.9% y/y, HSY -25.6% y/y, LW –17.0% y/y, MDLZ -6.8% y/y, See Fig 1.

Cost headwinds to watch: Packaging +25.4% y/y, Energy/Freight +15.1% y/y, EPC +19.3% y/y, PG -19.1% y/y, Softs/Sweeteners +3.6% w/w. See Fig 1.

Higher energy costs & shipping risk are implicitly an immediate tax on everything: Within COGS, they drive the cost of packaging (esp. aluminum), inbound & outbound freight as well as farm level costs (diesel, fertilizer) that are key to plantings, supply & future food inputs. Within SG&A, they drive delivery costs. They also threaten revenue with more consumer budget constraints. We monitor weekly performance of key equity indices and macro indicators. See Fig 11.

Crude drops as US & Iran make peace. WTI dropped to around $75 a barrel, its lowest since March, as the US and Iran reached an agreement to end the current conflict. Vessels have begun crossing the straight after being halted for many weeks; an immediate tailwind to HPC and staples companies broadly.

Cost Factor +1.3% w/w, +5.0% y/y (vs. prior week -1.4% w/w & +6.0% y/y). Notable commodity moves this week include Bunker Fuel -11% w/w, Diesel -10% m/m, Trucking freight +12% w/w and up 46% m/m (the influence of higher energy prices more delayed here); Cocoa & Coffee both up +8% w/w with volatile trading off El Niño weather patterns likely to impact harvests.

In this weekly note, we identify spot input costs’ putative impact on the U.S. fast moving consumer goods (FMCG) value chain, most measurably impacting staples, staples retailers, restaurants & food service. Optimal’s proprietary cost factor weights ticker & sector specific cost trends using a proprietary formula based on 32 trackable spot cost inputs – 23 of which are updated as of last night, the other 9 are latest available.

Figure 1: Weekly Cost Factor Summary

Sources: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, USDA, BEA

Figure 2: Weekly Cost Factor Margin Context

Sources: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, USDA, BEA

Figure 3: Weekly Input Commodity Performance by Group

Sources: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, USDA, BEA

Figure 4: Biggest Input Cost Movers y/y

Sources: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, USDA, BEA

Figure 5: Food Sector Cost Factor

Sources: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, USDA, BEA

Figure 6: Beverage Sector Cost Factor

Sources: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, USDA, BEA

Figure 7: HPC Sector Cost Factor

Sources: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, USDA, BEA

Figure 8: Restaurant Level Cost Factor

Sources: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, USDA, BEA

Figure 9: Restaurant Employment Cost Index

Sources: Optimal Advisory Proprietary Analysis, Bloomberg, FRED, USDA, BEA

Figure 10: Staples Sector Theme Box

Figure 11: Market Sector Performance

Sources: Optimal Advisory Proprietary Analysis, Bloomberg

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