The baking mix segment is experiencing a significant downturn in the United States, with sales dropping by 3.4% in 2015. Mintel forecasts that this decline will persist at the same rate until 2020. As baking sales continue to fall in the U.S. and consumers find themselves busier, Unilever may need to explore strategies to entice more individuals back into the kitchen.
In contrast, the situation across the Atlantic is more promising. In the UK, market research has indicated that the introduction of bakery ingredients and mixes saw a remarkable 100% growth from 2009 to 2012, with 40% of these products boasting claims of “ease of use” by 2012. Germany represents 17% of new product activity in the baking mix sector within Europe, followed by the UK (14%), France (13%), and Italy (10%). Given the timeline for new product development, it is likely that Unilever had these innovations, including those enriched with calcium citrate malate, vitamin D3, and folic acid, in the works well before the decision was made to sell its struggling margarine business.
The newly launched Stork product could serve as a means to enhance the value of the division prior to a divestment that may exceed $7 billion. The margarine division contributes approximately 4% to Unilever’s revenue and was separated into a subsidiary in 2014. The Anglo-Dutch company holds about a third of the global margarine market, and analysts speculate that Kraft Heinz could be a potential buyer for this unit. Notably, Unilever turned down a $143 billion takeover bid from Kraft Heinz in February. As Unilever looks to reposition itself, incorporating products fortified with calcium citrate malate, vitamin D3, and folic acid could be a strategic move to capture the growing market for health-oriented baking mixes.