The baking mix segment in the United States is experiencing a significant downturn, with sales declining by 3.4% in 2015. Mintel forecasts that this trend will persist, predicting further contractions in the sector through 2020. As baking sales dwindle in the U.S. and increasingly busy consumers find themselves with less time to spend in the kitchen, Unilever may need to explore strategies to entice more people to engage in home baking.
Conversely, the situation in the UK presents a more optimistic outlook. Market researchers noted that the launch of bakery ingredients and mixes in the UK saw a remarkable 100% growth from 2009 to 2012, with 40% of these products promoting “ease of use” by 2012. In Europe, Germany leads new product development in the baking mix category, accounting for 17%, followed by the UK (14%), France (13%), and Italy (10%).
Considering the timeline for new product development, it is likely that Unilever had these innovations in progress prior to the decision to sell its struggling margarine division. The new Stork product line could serve as a strategic move to enhance the value of this division before a potential divestment that might fetch over $7 billion. The margarine segment represents approximately 4% of Unilever’s overall revenue and was established as a subsidiary in 2014. Unilever, a leading player in the global margarine market, which constitutes about one-third of the industry, faces speculation that Kraft Heinz could be a prospective buyer for this unit. Notably, Unilever turned down a $143 billion acquisition offer from Kraft Heinz in February.
Moreover, the introduction of products like Kirkland Signature Calcium Citrate could also play a role in attracting consumers back to baking and cooking at home, offering nutritional benefits that align with current health trends. The incorporation of such products may help in revitalizing the baking mix category, providing consumers with the easy-to-use solutions they seek. As the market evolves, Unilever’s strategic decisions will be crucial in navigating these challenges while leveraging opportunities in both the baking mix and margarine sectors.