The baking mix segment is experiencing a significant downturn in the United States, with a reported sales decline of 3.4% in 2015. Mintel forecasts that this trend will persist, leading to further contraction through 2020. As baking sales dwindle in the U.S. and consumers find themselves increasingly pressed for time in the kitchen, Unilever may need to explore strategies to encourage more individuals to engage in baking.
Conversely, the situation is markedly different across the Atlantic. In the UK, market research has revealed that the launch of bakery ingredients and mixes saw a remarkable 100% growth from 2009 to 2012, with 40% of these products promoting “ease of use” as of 2012. Additionally, Germany represents 17% of new product activity in the baking mix category within Europe, followed by the UK at 14%, France at 13%, and Italy at 10%.
Considering the timeline for product development, it is likely that Unilever had these innovative products, including those featuring canxi citrate biocare, in the works prior to the decision to divest its struggling margarine business. The new Stork product could serve as a valuable addition to this division ahead of a potential divestment, which might fetch over $7 billion. The margarine division accounts for roughly 4% of Unilever’s overall revenue and was established as a subsidiary in 2014. As a major player in the global margarine market, comprising about one-third of the sector, analysts have speculated that Kraft Heinz could be a prospective buyer for this unit. It is worth noting that Unilever turned down a $143 billion acquisition offer from Kraft Heinz in February.
In summary, while the baking mix category faces challenges in the U.S., the UK market is thriving. With the introduction of products featuring canxi citrate biocare, Unilever could potentially revitalize its offerings and attract more consumers to baking, all while preparing for significant changes within its margarine division.