Tupperware Explained: Is it Time to Say Goodbye?

The internet is abuzz with memes! Moms all over the world are grieving! Why?

Tupperware has filed for bankruptcy. 😭

Tupperware is one of those iconic brands almost everyone has heard of. And those containers are indestructible! The brand, however, not so much. 😅

On 17 September 2024, the giant, with a market cap of $24 million (~₹199.2 crore), announced that it was seeking bankruptcy. Apparently, the company has been struggling for a while, with overall sales declining since 2018.

Its net sales saw a Year-on-Year (Y-o-Y) decrease of 18% in FY2022, standing at $1,305.6 million (~₹10,800 crore).

Additionally, the company reported total debts exceeding $1.2 billion (~₹9,900 crore) against assets of around $679.5 million (~₹5,639 crore) at the time of filing for bankruptcy.

To understand where things went wrong, we have to start at the beginning. Tupperware was established in 1946, and it is 78 years old. It was founded by a Chemist, Earl Tupper, who made containers with spill-proof lids and patented it.

However, people were not convinced why they should choose plastic containers over glass or ceramic containers. This changed when marketing expert Brownie Wise entered the picture.

Wise started Patio Parties, her own Tupperware-selling business. All she had to do was conduct parties for her friends, where she demonstrated the product, and people started buying it. It was such a hit that more women joined the league, and the group kept on growing. They were called “Consultants” of Tupperware.

Later, Wise was hired as VP of Marketing at Tupperware, and she nationalised this strategy. Company revenue was soaring, and they diversified their products and expanded into more than 100 countries. As of 2024, Tupperware had 460,000 consultants.

So, now, this model wherein the consultants sell the products is called the Direct Selling Model, which eliminates the middlemen, allowing for competitive and higher profit margins.

But Tupperware soon started having problems due to which they had to file bankruptcy:

• Tupperware's patents began to expire, due to which other companies started creating similar products at lower prices so competition grew!
• The number of women in the labour force was rising. The percentage of female workers increased by more than 256%. This was a negative for the company. More women in the workforce meant fewer were hosting parties and selling plastic containers.
• Additionally, consumers started shifting from direct sales to e-commerce, and this is where Tupperware should have pivoted from direct selling to e-commerce.

But they did not develop an omnichannel distribution strategy, or even modern e-commerce infrastructure. It only started selling its products on Amazon and Target in 2022. By then, it was already too late.

Tupperware's Business Model Failed It

Tupperware's business model is primarily based on direct sales through a network of independent consultants. The company relied on this model a little too much, with 90% of its sales coming from direct sales in FY2023. But the method was ill-suited to the 21st century.

Tupperware’s case made us learn that you need more than just a good product to survive in the business world. Can you imagine a brand known all over the world, with 78 years of legacy and a household staple, going bankrupt?

In the digital world, where consumers favour e-commerce and environmentally friendly alternatives, a plastic container delivered through direct selling wasn't going to survive long. The company did not evolve to cater to the changing market and consumer preferences, and now, it seems to have become irrelevant.

On 17 September 2024, the company voluntarily filed for Chapter 11 bankruptcy. Think of Chapter 11 as a chance for Tupperware to try and survive by:

• Exploring strategic alternatives
• Transforming its business model

The main point of filing a Chapter 11 bankruptcy is to create a plan to repay creditors in part or full. However, the company must still repay its remaining debts.

At the time of filing the bankruptcy, Tupperware listed the following:

• Assets: ₹4,150 crore - ₹8,300 crore
• Liabilities: ₹8,300 crore - ₹83,000 crore
• Creditors: 50 thousand - 1 lakh

Proof of the company's rising debt is in the table below: 👇

However, the company plans to continue operations and sell its products. It has implemented a strategic plan to:

• Modernise its operations
• Strengthen omnichannel capabilities
• Bolster operational efficiencies

Currently, Tupperware's independent consultant agreements have not changed.

Seems like the company is hoping to make a comeback. What do you think? Will Tupperware survive, or will its efforts to modernise be "too little, too late"? Let me know in the comments.

*Disclaimer: The stocks and companies discussed above aren't a recommendation from Finology Insider and shall not be construed as a replacement for professional advice. Consult a professional or conduct the necessary research before making investment decisions.

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