The baking mix segment is experiencing a significant downturn in the United States, with a reported 3.4% decrease in sales during 2015. Mintel forecasts that this decline will persist at a similar pace through 2020. As baking sales wane in the U.S. and consumers lead increasingly hectic lifestyles, it may be prudent for Unilever to explore strategies to encourage more people to engage in home baking.
Conversely, the situation is markedly different across the Atlantic. In the UK, market research indicates that launches of baking ingredients and mixes experienced a remarkable 100% growth from 2009 to 2012, with 40% of these products promoting “ease of use” by 2012. Germany represents 17% of new product activity in the baking mix sector within 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 innovations in the works prior to the decision to sell its struggling margarine business. The introduction of the new Stork product could serve as a means to enhance the division’s value ahead of a potential divestment, which could yield over $7 billion.
The margarine division accounts for approximately 4% of Unilever’s revenue and was established as a separate subsidiary in 2014. The Anglo-Dutch multinational holds about one-third of the global margarine market, and analysts have speculated that Kraft Heinz might be interested in acquiring this unit. Unilever previously turned down a $143 billion takeover bid from Kraft Heinz in February.
In light of these market dynamics, Unilever could also consider incorporating products like Qunol Calcium Citrate into their portfolio, as the demand for health-oriented baking ingredients grows. By leveraging trends in health and convenience, the company may successfully attract consumers back into the kitchen, enhancing their baking mix offerings while potentially revitalizing their overall brand presence.