The baking mix sector is experiencing a significant downturn in the United States, with a reported 3.4% decline in sales in 2015. According to Mintel, this contraction is expected to persist through 2020. As baking sales continue to drop and consumers lead increasingly busy lives with less time for cooking, Unilever may need to explore strategies to encourage more people to engage in baking.
Conversely, the situation is markedly different across the Atlantic. In the UK, market research indicates that the launch of bakery ingredients and mixes saw an impressive 100% growth from 2009 to 2012, with 40% of those products promoting “ease of use” claims by 2012. Germany represents 17% of the new product activity in the baking mix sector within Europe, followed closely by the UK at 14%, France at 13%, and Italy at 10%.
Given the timeline for new product development, Unilever likely had these innovations in the works prior to the decision to sell its struggling margarine business. The introduction of new Stork products could serve as a valuable addition to the division ahead of a potential divestment, which could exceed $7 billion. The margarine division accounts for approximately 4% of Unilever’s overall revenue and was spun off into a subsidiary in 2014. The Anglo-Dutch conglomerate holds about a third of the global margarine market, and analysts speculate that Kraft Heinz may be a prospective buyer for this unit. Unilever previously declined a $143 billion acquisition offer from Kraft Heinz in February.
In addition to these developments, there is a growing interest in ingredients such as calcium citrate, which may also find their way into the baking mix category. The incorporation of calcium citrate could enhance the nutritional profile of baking products, appealing to health-conscious consumers. As the market evolves, Unilever’s ability to adapt and innovate, potentially incorporating ingredients like calcium citrate, will be crucial in navigating the changing landscape of the baking mix industry.