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Cramer: A food revolution crushing the averages

Jim Cramer couldn't help but notice that several packaged-foods stocks have been absolutely crushing the broader averages, with Campbell Soup, General Mills and Hormel leaving the S&P 500 in the dust this year.

What really caught Cramer's attention was that for years these pantry-style packaged foods were considered to be challenged as Americans transitioned to healthier eating habits.

"To paint these companies with that broad a brush would be way too glib," the "Mad Money" host said.

Many of these companies have actually been transforming themselves through acquisitions in the natural and organic space. As a result, Campbell Soup, General Mills and Hormel have managed to brand themselves as natural and organic.

Campbell's Soup products stand on a store shelf
David McNew | Getty Images
Campbell's Soup products stand on a store shelf

Campbell Soup has been one of the most aggressive buyers of natural and organic brands in the past few years. It picked up Bolthouse Farms, Plum Organics and Garden Fresh Gourmet.

"Rather than being viewed as a maker of canned soup that you can keep eating in your fallout shelter for years after a nuclear apocalypse, or a zombie apocalypse for that matter, Campbell Soup has been trying to rebrand itself as a provider of fresh, natural and organic foods," Cramer said.

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General Mills also reaped the benefits of natural and organic when it paid $820 million in 2014 to acquire Annie's, a deal that nearly doubled the company's natural and organic portfolio. It also announced it would remove artificial flavors, coloring and gluten from all of its cereals.

It also recently snapped up Epic Provisions, the premium meat-snacks company.

Hormel is best known to some as the company behind Spam, the king of preserved foods. In 2015, it announced the acquisition of Applegate Farms, and the stock has soared 53 percent in the 10 months since the deal was announced.

"So, even though these takeovers seem tiny, they can have an enormous impact, which is a big reason why Campbell Soup, General Mills and Hormel have been able to put up such terrific results. Clearly, this strategy is working," Cramer said.

Given that all three companies are within striking distance of all-time highs, Cramer recommended waiting for a pullback before buying. Ideally, he would like to see stock prices go down and yields go up, with a buy on General Mills the moment its dividend hits the 3 percent threshold.

"If you don't already own them, I say put them on your shopping list and wait for the next big marketwide sell-off to give you a better entry point," Cramer said.

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