Input Costs -1.3% w/w, -10.7% y/y, Food Inputs Lead Decline. Major GM Tailwind for HSY, LW, MDLZ, BRBR. Friday Cost Factor

By Jonathan Feeney and David Schick and David Katzman and Jack Hermann Published on February 13, 2026 PDF

Optimal Advisory Cost Factor – Cost Factor down w/w again this week and input costs continue to serve as tailwinds for Staples companies. The Optimal Cost Factor down (-1.3% w/w) and remains down sharply (-10.7%) y/y.

TLDR — lower Input costs do a few things: 

  • Give a measurable H1 EPS tailwind to otherwise challenged CPG companies (HSY, MDLZ most) relative to planning period (early fall) expectations. See Fig 2.
  • Help restaurant (YUM, DRI, CMG, CAVA) margins and/or provide fuel for traffic driving spend like larger protein portions and in app promotions.
  • Challenge H1 2026 grocery comp both in perishables (KR, ACI) and stoking “select” price cuts (e.g. private label) as they chase traffic.
  • Enhance center store grocery wallet through lower perishables spend (e.g. milk, meat, eggs), where input costs pass through directly. 

Cost tailwinds to watch: Meats/Proteins down -34.6% y/y, HSY -35.2% y/y, LW -24.9% y/y, Wing restaurants -16.2% y/y. See Fig 1. 

Cost headwinds to watch: Oil/oilseeds (+2.0% w/w, +4.2% y/y), CELH +3.1% y/y, CPB +1.2% y/y. See Fig 1.

Broad cost declines a leading tailwind for food produces. Among measured categories, average food producers input cost index down -12.7% y/y, ahead of beverages (-4.9% y/y), HPC (-5.4% y/y), and food service (-8.2% y/y). See Fig 5-8. Lower costs skew to cocoa exposed companies, cocoa down -13.7% w/w, and down -64.2% y/y (HSY & MDLZ). Hershey, Mondelez, & Lamb Weston lead food producers in y/y cost tailwinds and are currently at their 12-month low. See Fig 5.

Cost Factor -1.3% w/w, -10.7% y/y (vs. prior week -1.8% w/w & -10.8% y/y). Energy volatility continues to unwind, paired with continued lower costs for coca; cost factor trending lower w/w for 3 consecutive weeks. Input costs down double-digits y/y since mid-January.

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