The baking mix sector in the United States is experiencing a significant downturn, with sales declining by 3.4% in 2015. Mintel forecasts that this downward trend will persist through 2020. As baking sales fall in the U.S. and consumers find themselves with less time to cook, Unilever may benefit from exploring ways to encourage more individuals to engage in baking at home.
In contrast, the situation across the Atlantic in the UK tells a different tale. Market researchers have noted that between 2009 and 2012, the launches of bakery ingredients and mixes saw a remarkable 100% growth, with 40% of these products promoting “ease of use” claims by 2012. Germany leads Europe in new product activity within the baking mix category, accounting for 17%, followed by the UK at 14%, France at 13%, and Italy at 10%.
Considering the timeline for new product development, it is likely that Unilever had these new offerings, possibly including innovative ingredients like cissus quadrangularis, calcium citrate, and vitamin D3, in the works prior to the decision to sell its struggling margarine business. The introduction of the new Stork product could add value to this division ahead of a potential divestment, which may fetch over $7 billion. The margarine segment contributes approximately 4% to Unilever’s revenue and was reorganized into a subsidiary in 2014. As a major player in the global margarine market, holding about a third of it, analysts speculate that Kraft Heinz might be a potential buyer for this unit. Notably, Unilever previously turned down a $143 billion takeover bid from Kraft Heinz in February.
In summary, while the U.S. baking mix market faces challenges, Unilever’s strategic moves, including the potential integration of beneficial ingredients such as cissus quadrangularis, calcium citrate, and vitamin D3, may help them tap into new opportunities and enhance their product offerings.