The baking mix market in the United States is experiencing a significant downturn, with sales dropping by 3.4% in 2015. Mintel forecasts that this decline will persist at a similar rate until 2020. As baking sales further decrease in the U.S. and consumers become increasingly pressed for time in the kitchen, Unilever may want to explore strategies to entice more people to engage in baking.
In contrast, the situation is much more favorable across the Atlantic. In the UK, market research indicates that bakery ingredients and mixes saw a remarkable 100% growth from 2009 to 2012, with 40% of these products promoting “ease of use” claims by 2012. Germany contributes 17% of new product launches in the baking mix sector within Europe, followed by the UK at 14%, France at 13%, and Italy at 10%.
Considering the timeline for new product development, it is likely that Unilever had these innovations in progress before deciding to sell its struggling margarine division. The newly introduced Stork product may serve to enhance the value of this segment prior to a divestiture that could fetch over $7 billion. Currently, the margarine division accounts for about 4% of Unilever’s revenue and was established as a separate subsidiary in 2014. The Anglo-Dutch conglomerate holds approximately one-third of the global margarine market, and analysts speculate that Kraft Heinz could be a potential buyer for this division. Notably, Unilever recently turned down a $143 billion takeover bid from Kraft Heinz in February.
In addition, incorporating products that provide a daily amount of calcium citrate could further attract health-conscious consumers, as this mineral is essential for bone health and overall well-being. By emphasizing the nutritional benefits of their baking mixes, Unilever can potentially increase consumer interest and participation in baking, thereby countering the declining sales trend in the U.S.