Hershey and Mondelez Each Lost Eleven Points. Costs did not fall after 2022. They split.

Commodity prices came off their peak, and every pricing conversation since has assumed the savings are sitting somewhere. Across 42 food and household filers the savings are not there — and the commodity data says why.

You know the meeting. Somebody from finance has a chart of input costs on the screen, and the line climbs through 2021, peaks in 2022 and then comes down. It is a real chart and the numbers in it are right. The question that follows is the one you have been dreading since the agenda went out: why the margin has not come back with it.

You took price twice. You held it. The relief everybody read about arrived for somebody. The honest answer is that you do not know which of your inputs moved, or by how much, because the number you have been handed is a category average and the decision in front of you is about a specific jar of a specific thing.

The savings are not in the filings

Forty-two food and household companies with a billion dollars or more of 2024 revenue file their numbers with the SEC, and those filings are free to read. Computed the same way for all of them — revenue minus cost of goods, over revenue — the median gross margin across the group has gone down since 2019, not up.

The obvious objection is that this is the economy rather than the category. So the same calculation ran against fifteen filers from outside food and household, drawn as a control before the category numbers were looked at. They went the other way.

That opposition is why this is a finding about food and household rather than about 2026. Two groups, one instrument, one day, opposite directions.

Costs did not fall. They split.

Every kilogram of everything imported into the United States is recorded with a value attached, which makes it possible to ask what happened to an input between the 2022 peak and 2024 without asking anybody’s opinion about it.

The oils came down hard — soybean oil 27 percent, palm oil 25 — and aluminum plate, a packaging line rather than a food one, fell 16. If those are your inputs, the relief was real and it arrived on schedule.

The tree crops went the other way in the same two years. Cocoa beans doubled. Chocolate and cocoa preparations rose 26 percent on top of the 20 percent they had added between 2019 and 2022.

A median taken across companies buying from both sides of that split lands near zero and describes nobody. It averages a company whose costs collapsed against one whose costs doubled, and the number it produces is true of neither.

The spread between companies is fifty times the movement over time

Across the same forty-two filers, the tenth percentile of gross margin sits at 13.8 percent and the ninetieth at 61.2 — a spread of 47.3 points between companies in one year, against a median movement of 0.92 points over five years.

A brand lead benchmarked against a category margin is being measured against a number fifty times smaller than the distance between the companies it was built from. Where you sit is a fact about your company. Which way you moved is a fact about your category.

For the price decision that resolves into something usable. Weighted toward the inputs that came down, holding price is a recovery you have already earned and the burden sits on anyone arguing for an increase. Weighted toward the ones that went up, absorbing another year funds somebody else’s harvest, and the increase has to be sized against the input rather than against last year’s increase.

Two of four predictions were wrong, and the leading one was mine

Four explanations were written down and scored before any data was pulled. The leading one, at 55 to 80 percent, was that these companies kept most of the input-cost decline and are sitting on widened margins. It is dead: margin compressed, and cost of goods rose as a share of revenue by the same amount it fell. The second, that they passed the savings through to shelf, is dead for the same reason.

What survived was the candidate written as the dull alternative — that input costs never fell for these filers in the first place — and the commodity split makes it sharper than it was written.

The falsifier attached to the leading prediction never fired, which is a defect in how it was written rather than a pass. It joined two movements together and tested only the combination, so the prediction failed in a way its own test could not see.

The limits on the rest of it are sharper than the headline. An import unit value is a national average across every importer, before contracts, hedging, grade and freight — it is not any company’s cost line, and no cost line was decomposed by input here. The commodity split and the filer split are consistent with each other, and that is all this can say.

No filing prose was read, so there is no management explanation and no split between price and volume. The control is fifteen filers sampled rather than a census, and twelve filers of sixty-nine produced no usable comparison and are published by name. The consumer half — what any of this did to shelf prices — is missing, which means the read is not finished.