Florida-based suffering from waning sales, rising competition, limitations of direct-to-consumer marketing model that once defined its success
New York: The company behind Tupperware, the plastic kitchenware that revolutionised food storage after World War II and became inextricably linked to the parties where women seeking a measure of financial independence and fun in midcentury America sold the colourful products, has filed for bankruptcy.
Tupperware Brands, the Orlando, Florida-based consumer goods company that produces the iconic line of containers, said it was seeking Chapter 11 bankruptcy protection after struggling to revitalise its core business and failing to secure a tenable takeover offer.
Despite enjoying the same cultural ubiquity as Kleenex, Teflon and other brands whose trademarked names are eponymous with entire product categories, Tupperware has suffered from waning sales, rising competition and the limitations of the direct-to-consumer marketing model that once defined its success.
The company said in its bankruptcy filing that consumers shifting away from direct sales, which make up the vast majority of its sales more than a quarter-century after the first Tupperware parties, has hit the storied business hard.
The company also cited growing public health and environmental concerns about plastic, internal inefficiencies that made it challenging to operate globally, and the “challenging microeconomic environment” of the last several years for its financial straits.
Tupperware said it planned to continue operating during the bankruptcy proceedings and would seek court approval for a sale “in order to protect” the brand.
Tupperware’s roots date to 1946. As the company tells it, chemist Earl Tupper found inspiration while creating moulds at a plastics factory. He set out on a mission to create an airtight lid seal — similar to the one on a paint can — for a plastic container to help families save money on food waste.
The brand experienced explosive growth in the mid-20th century, particularly with the rise of direct sales through Tupperware parties. First held in 1948, the parties were promoted as a way for women to earn supplemental income by selling their friends and neighbours the lidded bowls for holding leftovers.
The system worked so well that Tupperware eventually removed its products from stores. It also led Tupper to appoint Brownie Wise, who came up with the house party idea, as a company executive, a position that was rare for a woman at the time.
In the decades that followed, the brand expanded to include canisters, beakers, cake dishes and all manner of implements, and became a staple in kitchens across America and eventually, abroad as well.
A newspaper reporter who went undercover to work as a footman in Buckingham Palace captured pictures of the royal Tupperware on the breakfast table of Queen Elizabeth II.
The story behind the company also showed up on TV screens and on stage, with depictions in PBS’ 2004 film Tupperware! and the play Sealed for Freshness.
“For more than 70 years, Tupperware Brands has centered on a core purpose — to inspire women to cultivate the confidence they need to enrich their lives, nourish their families, and fuel communities around the world,” Tricia Stitzel, the company’s first female CEO, wrote as recently as 2018.
“And we continue to make decisions, from our innovative products to our strategic growth strategy, which reflect this purpose.”
In the 2000s, Tupperware also diversified beyond its containers by acquiring beauty and personal care companies, most of them direct-selling brands like Avroy Shlain, Fuller Cosmetics, NaturCare, Nutrimetics and Nuvo.
Financial analysts, however, criticised Tupperware in recent years for sticking with the direct sales model and failing to evolve with the times, most notably the large number of women who work outside the home.
“The reality is that the decline at Tupperware is not new,” Neil Saunders, managing director of GlobalData, said in Wednesday commentary. “It is very difficult to see how the brand can get back to its glory days.”
The company’s sales improved some during the early days of the COVID-19 pandemic, when Americans were cooking and eating more at home. But overall sales have been in steady decline over the years due to rising competition from Rubbermaid, OXO and even takeout food containers that consumers recycle. Vintage Tupperware also remains in demand as a collectible.
Overall, sales for food storage supplies are up 18% compared to before the pandemic, according to figures from market research firm Circana. But despite that growth — and the ongoing popularity of food storage videos on social media — the troubles for Tupperware remained.
Saunders explained that many consumers have migrated to less expensive home storage brands they can find at Target and Walmart. Amazon, the king of online retailers, also has its own line.
Historically, Tupperware marketed its products as higher-quality durable items. But consumers who are looking for durability are interested in more sustainable materials, such as glass and stainless steel, said Jennifer Christ, manager of consumer and commercial research for the Freedonia Group, a market research company.
“There’s less brand loyalty than there used to be,” Christ said.
In the past few years, Tupperware tried a few things to expand its reach and attract new customers. It started selling its products on Amazon as well as in stores at Target and Macy’s. In 2019, the brand also launched a line made with sustainable materials and expanded it two years later.
But financial troubles continued to pile up.
Last year, the company sought additional financing as it warned investors about its ability to stay in business and its risk of being delisted from the New York Stock Exchange.
The company received an additional non-compliance notice from the NYSE for failing to file its annual results with the Securities and Exchange Commission earlier this year.
Tupperware continued to warn about its ability to stay afloat in more recent months, with an August securities filing pointing to “significant liquidity challenges.” Shares for the company have fallen 75% this year.
In Tuesday’s bankruptcy petition, Tupperware reported more than $1.2 billion in total debts and $679.5 million in total assets. It said Tupperware currently employs more than 5,450 employees across 41 countries and partners with over 465,000 consultants who sell products on a freelance basis in nearly 70 countries.
Particularly in India, Tupperware was introduced as a way for women to own their own businesses.
Many Tupperware sellers market the products online, but many also make their sales during Tupperware parties at their homes or neighborhood gatherings. In the announcement of the filing, the company maintained that there were no current changes to Tupperware’s independent sales consultant agreements.
Tupperware also pointed to aims to “further advance Tupperware’s transformation into a digital-first, technology-led company,” possibly signaling a move toward increased reliance of sales on the brand’s website or perhaps more online-focused marketing, although the company did not provide exact specifics.
In a statement, Tupperware President and CEO Laurie Ann Goldman acknowledged Tupperware’s recent financial struggles and said that the bankruptcy process is meant to provide “essential flexibility” as the company pursues this transformation. The brand, she maintains, isn’t going anywhere.
“Whether you are a dedicated member of our Tupperware team, sell, cook with, or simply love our Tupperware products, you are a part of our Tupperware family,” Goldman said in a statement.
“We plan to continue serving our valued customers with the high-quality products they love and trust throughout this process.”
The company’s bankruptcy filing, though, faces opposition from Tupperware’s new lenders, who want the petition dismissed or converted it to a Chapter 7 case, which would liquidate the company. Alternatively, they’re asking the court for permission to take action against the company, which could allow them to collect debt they’re owed.
