Input Costs +0.8% w/w, -5.4% y/y, Energy & Freight Costs Offsetting Tailwinds. Friday Cost Factor. LW+, MDLZ+, Wing Restaurants+, CPB-, CELH-

By Jonathan Feeney and David Schick and David Katzman and Jack Hermann Published on March 20, 2026 PDF

The Optimal Advisory Cost Factor rose again this week (+0.8% w/w) with energy & freight costs higher on Middle East conflict – but remains down (-5.4% y/y). The Costs Factor was running down -12.7% y/y just 3-weeks ago – a big flip to the script if energy costs remain elevated.

Cost tailwinds to watch: Softs/Sweeteners down -28.7% y/y, HSY -30.0% y/y, LW -25.1% y/y, Wing restaurants -17.6% y/y. See Fig 1.

Cost headwinds to watch: Energy/Freight +13.1% m/m, Oil/Oilseeds +19.2% y/y, LANC +8.5% y/y, JJSF +4.3% y/y. See Fig 1.

Oil up +67% ytd. After 2 consecutive weeks with all 30/30 measured company specific costs factors indices up w/w, we note some moderating after the initial energy driven cost spikes. 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 +0.8% w/w, -5.4% y/y (vs. prior week +3.3% w/w & -9.2% y/y). Spot energy inputs moderated but remain significantly elevated compared to last month and last year. (notable Bunker Fuel +92% m/m, and up +135% YTD; Diesel +37% m/m, and +45% 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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