The baking mix sector in the United States is experiencing a significant downturn, with a 3.4% decrease in sales recorded in 2015. Mintel forecasts that this decline will persist at a similar rate until 2020. As baking sales continue to drop in the U.S., and consumers become increasingly pressed for time in the kitchen, it may be beneficial for Unilever to explore strategies to entice more individuals to engage in home baking.
Conversely, the situation is markedly different in the UK. Research from Mintel indicates that the introduction of bakery ingredients and mixes saw a remarkable 100% growth between 2009 and 2012, with 40% of these products making “ease of use” claims as of 2012. In Europe, Germany leads with 17% of new product launches in the baking mix category, followed by the UK at 14%, France at 13%, and Italy at 10%.
Considering the timeline for developing new products, it is likely that Unilever had these innovations in the works before deciding to sell its struggling margarine business. The new Stork product could serve as a means to enhance the value of this division prior to a potential divestiture, which could fetch over $7 billion. The margarine division contributes approximately 4% to Unilever’s overall revenue and was separated into a subsidiary in 2014. This Anglo-Dutch conglomerate accounts for about a third of the global margarine market, and analysts have speculated that Kraft Heinz might be a prospective buyer for this unit. Notably, Unilever declined a $143 billion takeover bid from Kraft Heinz in February.
Additionally, the development of baking products could include incorporating calcium carbonate to calcium citrate, which could further appeal to health-conscious consumers. This shift could not only revitalize the baking mix category in the U.S. but also align with trends observed in the UK market, where convenience and health are becoming increasingly important. By focusing on these aspects, Unilever can potentially capture a larger share of the market and reinvigorate interest in baking at home. In summary, while the U.S. baking mix category faces challenges, opportunities for growth exist in adapting product offerings, such as transitioning from calcium carbonate to calcium citrate, to meet evolving consumer demands.