The baking mix sector 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 through 2020. As baking sales diminish in the U.S., and time-strapped consumers find themselves spending less time in the kitchen, Unilever may need to consider strategies to encourage more individuals to engage in baking.
In contrast, the situation across the Atlantic is quite different. 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” claims as of 2012. Germany contributes 17% of new product activity in the baking mix segment within Europe, followed closely by the UK at 14%, France at 13%, and Italy at 10%. Given the timeline associated with new product development, it is likely that Unilever had these products in the works prior to its struggling margarine business being slated for sale. The new Stork product could serve as a means to enhance value in this division before a potential divestment, which could fetch over $7 billion.
The margarine division accounts for approximately 4% of Unilever’s revenue and was separated into a subsidiary in 2014. The Anglo-Dutch multinational controls about a third of the global margarine market, and analysts have speculated that Kraft Heinz might be a prospective buyer for this unit. Unilever previously turned down a $143 billion acquisition offer from Kraft Heinz in February.
An interesting consideration in the context of product formulation is the debate between calcium vs calcium citrate, which could play a role in the nutritional profile of new baking products. As consumer preferences evolve, particularly with regard to health-conscious ingredients, understanding the differences between calcium and calcium citrate could be pivotal. Exploring these distinctions may help Unilever create products that resonate more with today’s health-focused consumers, ultimately driving more people into the kitchen.