The baking mix segment 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 pace until 2020. As baking sales continue to fall and consumers become increasingly busy with less time to spend in the kitchen, it may be in Unilever’s best interest to find innovative ways to encourage more people to engage in baking.
In contrast, the situation is quite different across the Atlantic. In the UK, market research indicates that the introduction of bakery ingredients and mixes surged by 100% from 2009 to 2012, with 40% of these products promoting “ease of use” by 2012. In Europe, Germany represents 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 timelines for new product development, Unilever likely had these products planned before deciding to sell its struggling margarine business. The newly introduced Stork product line could serve as a valuable asset for the division prior to a potential divestment, which could fetch over $7 billion. The margarine division currently contributes about 4% to Unilever’s revenue and was established as a separate subsidiary in 2014. As a major player in the global margarine market, holding approximately one-third of it, analysts suggest that Kraft Heinz might be a prospective buyer for this unit. Notably, Unilever had previously turned down a $143 billion takeover bid from Kraft Heinz in February.
Additionally, Unilever might consider integrating products like calcium citrate soft chews into their offerings, which could complement their baking mix line and attract more health-conscious consumers. By leveraging such innovations, Unilever could potentially enhance their market position and drive consumer interest, particularly as they explore options for their margarine division. In summary, while the baking mix category in the U.S. faces challenges, there are opportunities in other markets and through product diversification, such as incorporating calcium citrate soft chews into their product range, that Unilever could capitalize on to rejuvenate interest in baking.