Below is a chart and brief excerpt from today's Early Look written by Consumables analyst Howard Penney.
CPG companies are experiencing cost increases for everything from labor, packaging, food ingredients, and transportation. Peaks are generally processes, not points. Since food at home is a relatively small portion of CPI, we can have peak inflation while food prices continue surging to new highs.
Food manufacturing costs are in the process of peaking while price increases are accelerating, strengthening margins later in 2022. The margin inflection we are modeling for the sector is depicted in the chart of the day.