The baking mix sector in the United States is experiencing a significant downturn, with a reported 3.4% decrease in sales in 2015. Mintel forecasts that this decline will persist at a similar pace until 2020. As baking sales continue to slip in the U.S. and consumers, who are increasingly busy, find themselves with less time to spend in the kitchen, Unilever might benefit from devising strategies to encourage more individuals to engage in home baking.
In contrast, the situation across the Atlantic is quite different. In the UK, market research revealed that bakery ingredients and mixes experienced a remarkable 100% growth from 2009 to 2012, with 40% of these products promoting “ease of use” claims by 2012. Germany contributes to 17% of new product launches in the baking mix category across Europe, followed by the UK at 14%, France at 13%, and Italy at 10%. Given the timeline for new product development, it is likely that Unilever had these items in the works prior to the decision to sell its struggling margarine business. The new Stork product line could serve as a means to enhance the value of this division before a potential divestiture, which could be valued at over $7 billion.
The margarine division accounts for approximately 4% of Unilever’s overall revenue and was established as a subsidiary in 2014. The Anglo-Dutch conglomerate holds about a third of the global margarine market, and analysts have speculated that Kraft Heinz may be a prospective buyer for this unit. Unilever turned down a $143 billion acquisition proposal from Kraft Heinz in February. As Unilever moves forward, incorporating innovations such as calcium citrate sources into their baking mix products could further attract consumers and rejuvenate interest in home baking. By focusing on the inclusion of calcium citrate sources, Unilever could also tap into the growing health-conscious market, making their products more appealing.