When McKinsey recently dropped their Global Materials Perspective 2026, it mostly targeted the metals and mining sectors, with brief mentions of plastics, paper, and building supplies. On the surface, it’s easy to skip if you aren't running a mine—but that would be a mistake.
Every single can, lid, foil wrapper, bottle resin, and carton you buy originates in the exact markets covered in this report. The same goes for hidden cost drivers—like the fertilizer powering your crop supply chains or the energy running your processing plants. For procurement leaders in food, beverage, or CPG, this report offers a clear preview of the exact conversations you'll be having with suppliers over the next couple of years.
Here are six key takeaways that matter most for direct procurement teams. They all point toward the same underlying problem: most procurement teams rely on internal spend data, even though their real cost drivers are being shifted by market signals two or three tiers upstream.
1. Upstream suppliers posted record margins without getting any faster or leaner
In 2025, EBITDA margins across metals and mining averaged 27%—up from 19% back in 2015—and total market cap hit a record $3.7 trillion. Yet revenue barely moved (+1%), overall volume stayed flat, labor productivity didn't improve, and capital efficiency actually fell over 5%.
Most of those profits came purely from price hikes and product mix, heavily driven by gold and copper. Production costs for copper, gold, and iron ore climbed 28% to 36% since 2020, easily outpacing broader US CPI inflation (24%).
What does this mean for your team? Upstream suppliers hold serious pricing power, but they haven't gained internal efficiencies to pass along to you. When a tier-1 supplier asks for a price increase, their cost-plus narrative often falls apart under closer inspection. Having a solid should-cost model backed by real-time market data gives you the leverage you need to push back—otherwise, you're just negotiating against their internal numbers.
2. Tariffs have fractured single global market prices
The report highlights how trade tariffs are pulling regional metal prices apart. Under Section 232's 50% tariffs on steel and aluminum, US aluminum spiked above $6,200 per metric ton—more than 60% higher than prices in China. Meanwhile, massive domestic overcapacity in China is keeping local steel prices artificially low, while copper remains relatively unified globally.
The downstream impact is huge. Between early 2025 and mid-2026, building a compact EV in the US cost roughly $1,200 more in raw materials alone compared to making the exact same vehicle in China.
Think about how that applies to your packaging. If you manufacture in the US, aluminum beverage cans, tinplate food cans, steel caps, and foil seals all put you on the expensive side of this cost gap. Relying on a single global benchmark doesn't tell you the real story anymore. You need visibility into regional pricing, specific tariff impacts, and regional premiums tracked down to the individual plant and origin level.
3. Supply shocks usually start two or three steps back
Look at sulfur as a primary example. When shipping through the Strait of Hormuz hit disruptions, global sulfur exports dropped significantly (producers west of Hormuz account for about a quarter of world supply). Sulfur prices surged to $1,000 per metric ton. Because sulfur represents up to 40% of operating costs for copper leaching, smelters had to cut back production.
That same bottleneck disrupted roughly 10% of global aluminum supply, driving aluminum prices over $3,000 per metric ton by mid-2026.
Now carry that one step further: sulfuric acid is essential for manufacturing phosphate fertilizer. Fertilizer prices directly influence farmer planting choices and crop yields, which eventually flow straight into your sugar, grain, oil, and fruit contracts next season. A single geopolitical hiccup in the Gulf ends up inflating your packaging costs today and your agricultural ingredient costs tomorrow.
Standard ERP systems simply aren't built to track these indirect chains—they only show what you buy directly from tier 1. This is why multi-tier visibility matters: connecting your internal spend with tier-2/3 supplier mapping and live commodity benchmarks lets you quickly spot risks across every product line linked to a vulnerable supply chain.
4. Government policy is taking over supply chains—especially scrap metal
Upstream supply continues to concentrate. Market concentration in mining and refining grew by 3 percentage points between 2020 and 2025. In response, national governments are stepping in through strategic stockpiles, direct equity investments, guaranteed off-take agreements, and strict export controls. For example, the EU designated 60 Strategic Projects under its Critical Raw Materials Act, while the US government took direct ownership stakes in key mineral producers.
For packaging buyers, the shift around recycled scrap is even more critical. Regulations that once applied only to rare earth minerals now target scrap metals. Both Europe and the US have tightened restrictions on exporting scrap, and US lawmakers have even proposed a 25% domestic sales mandate for copper scrap.
Most CPG and food & beverage sustainability goals depend heavily on recycled materials—especially aluminum cans. As governments begin treating recycled scrap as a strategic national asset, secondary materials won't remain a simple, low-cost alternative. Your sustainability goals now carry regulatory risk, meaning your cost models need to track the spread between virgin and recycled prices across every operating region.
McKinsey also pointed out that value is shifting further upstream—mines and raw extractors are keeping high margins while smelters and midstream processors are feeling the squeeze. When a midstream supplier gets squeezed, your operational risk goes up. Keep a close eye on your converters and processors, not just your primary contract suppliers.
5. Mining companies are turning procurement into a major profit driver
McKinsey estimates the total operational productivity potential in mining at $450 billion to $750 billion per year (around 15% to 25% of total industry revenue). Strategic procurement alone accounts for $75 billion to $150 billion of that, driven by 4% to 8% spend reductions. The biggest levers being used are tighter demand management and broader supplier sourcing. One global mining firm cited in the report unlocked 20% EBITDA savings simply by running an AI-driven spend analysis.
Remember, these numbers reflect how your suppliers are optimizing their own purchasing. That leaves two big questions for your team: First, if your suppliers are cutting 4% to 8% off their costs, how much of those savings are they passing on to you? Second, diversifying your supply chain requires real data—you need to know exactly which backup suppliers exist, where they operate, their true landed costs, and their tariff exposure before you make a move.
6. One-off AI pilots don't scale—integrated systems do
The report is straightforward on this point: businesses that move beyond short-term AI pilots into fully integrated production systems with clear KPIs build a lasting competitive advantage. McKinsey calls 2026 and 2027 a critical window, warning that companies taking a "wait-and-see" approach risk getting left behind. For context, the global fleet of autonomous haul trucks nearly tripled over the last two years, and early movers are already seeing significant efficiency gains.
I recently wrote about how treating AI like a free trial run usually fails—people sign up, try it twice, and decide it doesn't work. McKinsey delivers that exact message in executive terms: a isolated pilot project produces a deck, but a core workflow tool with dedicated ownership and weekly usage delivers actual bottom-line results.
The true value comes from building an institutional record. When every sourcing decision, along with the market data and rationale behind it, is captured in a central system, it makes every future decision smarter. A quick pilot project never runs long enough to build that kind of organizational memory—and when a key category manager leaves, that knowledge stays with the business instead of walking out the door.
Action plan for the next 90 days
Map out supply chains past tier 1 for your top 20 direct materials. Prioritize key drivers like aluminum, steel, tinplate, resins, paperboard, and core agricultural inputs.
Shift from global market averages to regional pricing models. Track US, EU, and Asian benchmarks alongside local tariffs and regional premiums for every plant location.
Develop should-cost models fueled by real-time market data, and bring them to every vendor price negotiation.
Select one high-impact AI use case and deploy it directly into daily workflows with a dedicated owner, clear metrics, and monthly reviews.
Start logging procurement decisions systematically—document what was decided, the market signals behind the move, and the ultimate business outcome.
The takeaway for procurement teams
McKinsey originally wrote this report with mining executives in mind, but reading it as a procurement leader tells a clear story: the main cost pressures over the next two years will originate deep in upstream supply chains, move through tariff changes and trade routes, and hit your COGS long before traditional internal tracking picks them up.
At Kodiact, we help food, beverage, and CPG teams build real-time market visibility across raw materials, ingredients, and packaging. If you're currently navigating these challenges, I'd love to connect and share thoughts.
Source: McKinsey & Company, Global Materials Perspective 2026, October 2026.