Energy & Freight Spike Wiping Out Staples Cost Tailwinds – LW+, MDLZ+, Wing Restaurants+, CPB-, CELH- Cost Factor -0.3% w/w, -2.2% y/y

By Jonathan Feeney and David Schick and David Katzman and Jack Hermann Published on March 27, 2026 PDF

The Optimal Advisory Cost Factor down this week (-0.3% w/w) as energy paused but now only down slightly (-2.2% y/y). Costs were down -12.7% y/y just 4-weeks ago – a sudden move that presents a surprise challenge to CPG earnings algorithms.

Cost tailwinds to watch: Softs/Sweeteners down -27.2% y/y, HSY -27.5% y/y, LW -22.3% y/y, Wing restaurants -16.9% y/y. See Fig 1.

Cost headwinds to watch: Oil/Oilseeds +18.3% y/y, LANC +11.5% y/y, JJSF +7.7% y/y, Energy/Freight +8.5% y/y. See Fig 1.

Continued volatility in Energy inputs. Oil down -1.7% w/w but up +65% ytd. After 2 consecutive weeks where all 30/30 measured company specific cost factor indices jumped at the onset of the Iran conflict, spikes are moderating selectively. See Fig 5-8.

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.

Cost Factor -0.3% w/w, -2.2% y/y (vs. prior week +0.8% w/w & -5.4% y/y).

Spot energy inputs moderated but remain significantly elevated compared to the start of the year. (notably: Bunker Fuel +94% ytd, but down -18% w/w; Diesel +6% w/w, and +54% 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

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