Jim Cramer Labels Kraft Heinz and Packaged Food Stocks as “Dead Money”
CNBC’s Jim Cramer has delivered a sharp warning to investors eyeing traditional packaged food stocks, specifically pointing to Kraft Heinz (NASDAQ: KHC) as a symbol of stagnation in the sector. Speaking on a recent episode of “Mad Money,” Cramer dismissed Kraft Heinz and its peers as “dead money,” citing a lack of growth and innovation within the category.
“These stocks just go nowhere,” Cramer said, referencing the underwhelming performance of legacy packaged food companies. Kraft Heinz shares have lost nearly 30% of their value over the past five years, underperforming both the broader consumer staples sector and major indices like the S&P 500. The company is currently trading at valuations well below its peers, with a forward P/E ratio around 11.5 versus the industry average of 20.
Investor sentiment has cooled on big food manufacturers as they struggle with shifting consumer preferences, ongoing margin pressures, and limited brand differentiation. Cramer compared these stocks to bond proxies, noting the high-yield dividends but stagnant capital returns. Kraft Heinz, for example, offers a dividend yield of around 4.6%, but analysts suggest this may not be enough to offset limited growth prospects.
This bearish stance reflects broader FMCG industry challenges. As price sensitivity grows and consumers increasingly prioritize healthier, fresher, or private-label options, legacy brands face mounting pressure to innovate or reposition. While Kraft Heinz has initiated efforts to streamline operations and invest in its brand portfolio, performance has remained sluggish, keeping investors on edge.
FMCG leaders are taking note. The warning signals call for a closer examination of product portfolios, brand relevance, and digital capabilities. High-margin innovation, purposeful brand strategy, and agility in meeting evolving demand will be key differentiators moving forward.
As private-label share continues to expand and younger consumers seek more transparency and nutrition, the packaged food segment must either evolve or risk long-term irrelevance in consumer baskets—and investor portfolios.