Costs Ease (-1.4% w/w, +6.0% y/y), Still a Shocking +17% Since Late February Led By Energy; HSY+, LW+, MDLZ+, PG-, EPC-, CLX-

By Jonathan Feeney and David Schick and David Katzman and Jack Hermann Published on June 12, 2026 PDF

The Optimal Advisory Cost Factor declined again this week and decelerated on a y/y basis for just the second time since the breakout of the Iranian conflict. The factor remains a headwind (+6.0% y/y) to CPG as tailwinds from softs, sweeteners, and non-beef proteins are being more than offset by packaging and energy headwinds. Restaurants, especially heavy chicken buyers (e.g. WING) are selectively enjoying margin tailwinds while the comp picture for retailers (e.g. KR, ACI, WMT) is mixed as major perishables categories including dairy, chicken & eggs are deflationary.

Cost tailwinds to watch: Softs/Sweeteners down -29.5% y/y (and at 12mo lows), Meats/Proteins –27.4% y/y, HSY -26.4% y/y, LW –17.1% y/y, MDLZ -6.2% y/y, Energy & Freight -4.7% w/w. See Fig 1.

Cost headwinds to watch: Packaging +26.3% y/y, Energy/Freight +19.5% y/y, PG +21.6% y/y, EPC +21.0% y/y. 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 slides to two-month lows on a fading war-risk premium. WTI fell more than 4% toward $86 a barrel, it’s lowest since a brief low in April, after President Trump suspended planned attacks against Iran and signaled that Washington and Tehran were close to a deal. WTI has now declined 16% over the past four weeks.

Cost Factor -1.4% w/w, +6.0% y/y (vs. prior week -0.1% w/w & +7.4% y/y). Notable commodity moves this week include Bunker Fuel -7% w/w, still up 74% ytd; Diesel -8% m/m, up +49% ytd; Eggs continue to test lows on excess supply: down -24% m/m, and -57% ytd.

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

DISCLOSURES AND DISCLAIMERS

Analyst Certification

The analyst primarily responsible for the preparation of this report attests to the following: (1) that the views and opinions rendered in this report reflect his or her personal views about the subject companies or issuers; and (2) that no part of the analyst’s compensation was, is, or will be directly related to the specific recommendations or views in this report.

Analyst Certifications And Independence

Each of the Optimal Advisory analysts whose names appear on the front page of this report hereby certify that all the views expressed in this Report accurately reflect our personal views about any and all of the subject securities or issuers and that no part of our compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views of in this Report.

Optimal Advisory (the “Company”) is an independent equity advisory provider. The Company is not a member of the FINRA or the SIPC and is not a registered broker dealer or investment adviser. Optimal Advisory has no other regulated or unregulated business activities which conflict with its provision of independent advisory work.

Limitations Of Research And Information

This Report has been prepared for distribution to only qualified institutional or professional clients of Optimal Advisory. The contents of this Report represent the views, opinions, and analyses of its authors. The information contained herein does not constitute financial, legal, tax or any other advice. All third-party data presented herein were obtained from publicly available sources which are believed to be reliable; however, the Company makes no warranty, express or implied, concerning the accuracy or completeness of such information. In no event shall the Company be responsible or liable for the correctness of, or update to, any such material or for any damage or lost opportunities resulting from use of this data.

Nothing contained in this Report or any distribution by the Company should be construed as any offer to sell, or any solicitation of an offer to buy, any security or investment. Any research or other material received should not be construed as individualized investment advice. Investment decisions should be made as part of an overall portfolio strategy and you should consult with a professional financial advisor, legal and tax advisor prior to making any investment decision. Optimal Advisory shall not be liable for any direct or indirect, incidental or consequential loss or damage (including loss of profits, revenue or goodwill) arising from any investment decisions based on information or research obtained from Optimal Advisory.

Optimal Advisory may receive consulting or other compensation from securities mentioned but is not related to any recommendation in this report.

Reproduction And Distribution Strictly Prohibited

No user of this Report may reproduce, modify, copy, distribute, sell, resell, transmit, transfer, license, assign or publish the Report itself or any information contained therein. Notwithstanding the foregoing, clients with access to working models are permitted to alter or modify the information contained therein, provided that it is solely for such client’s own use. This Report is not intended to be available or distributed for any purpose that would be deemed unlawful or otherwise prohibited by any local, state, national or international laws or regulations or would otherwise subject the Company to registration or regulation of any kind within such jurisdiction.

Copyrights, Trademarks, Intellectual Property

Optimal Advisory, and any logos or marks included in this Report are proprietary materials. The use of such terms and logos and marks without the express written consent of Optimal Advisory is strictly prohibited. The copyright in the pages or in the screens of the Report, and in the information and material therein, is proprietary material owned by Optimal Advisory unless otherwise indicated. The unauthorized use of any material on this Report may violate numerous statutes, regulations and laws, including, but not limited to, copyright, trademark, trade secret or patent laws.

Additional Information is available upon request.

For more information on receiving Optimal Advisory, email: [email protected]