Down the Grocery Aisles
Continuing on his consolidation theme, Cramer took a stroll down the supermarket aisles to discuss the consumer packaged-food stocks. He said the packaged food companies used to be the poster children for consistent and stable growth with terrific dividend yields, but no more. Now there are simply too many companies fighting for too little aisle space and none of them seem to be keeping pace with America's changing diets.
Cramer noted that in conference call after conference call, the food companies blamed "promotional ineffectiveness" and "increased competition" for missing their estimates. Even B&G Foods (BGS), posted a 6-cents-a-share miss due to the increased promotions needed to meet its revenue targets.
ConAgra (CAG) is another food stock seemingly in a perpetual turnaround. The company continues to struggle to gain any momentum, Cramer said, and Americans just aren't finding ConAgra's processed and frozen foods all that tasty anymore.Kellogg (K) sees weakness in its cereal and snack business, while Kraft Foods (KRFT) is seeing its shares only kept afloat by its 3.5% dividend yield. Cramer said this industry desperately needs more consolidation before it becomes investable again.