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The Party's Over for Tupperware: Bankruptcy

All the world’s a stage,

And all the men and women merely players,

They have their exits and entrances,

And one man in his time plays many parts,

His acts being seven ages.


Shakespeare’s Seven Ages describe our journey through life.


If Tupperware was a person, it would be an old-age pensioner.


In this edition we’re going to follow Tupperware’s life journey through Shakespeare’s seven stages of Man- from Birth to Old Age - after the company recently filed for Chapter 11 bankruptcy protection in September 2024.



Nostalgia

What memories does Tupperware evoke for you? If you’re Gen X like me it’s probably a mix of:


  • Your Grandmother’s Laminex kitchen table

  • Homebaked cookies in a tupperware container, probably orange

  • Cordial in a Tupperware jug, also orange


That’s the nostalgia talking.


But when did it stop being cool? When did it start being cool?


For me, it’s just always been there: at the grandparent’s house, at garage sales, and in a giant mess at the back of the most difficult to reach cupboard in my own kitchen.

And we all know the story - it all kicked off with Tupperware Parties.


1. Baby (1940s)

Earl Silas Tupper (born 1907) was fascinated by the relatively new material of plastics in the early 20th century. In the 1930s and 40s it was mainly used for military and industrial purposes. That’s where Tupper got into it - he worked with polyethylene at DuPont during WWII, and began experimenting with it in his home workshop.


In 1946 Tupper successfully purified polyethylene to create a durable, flexible, and lightweight plastic suitable for consumer products. He designed the "Wonder Bowl," one of the first Tupperware products, featuring a smooth, non-porous surface that was easy to clean.


But people already had bowls - nice, clean, ceramic bowls. What did they need plastic bowls for? People who had just gone through a war weren’t particularly interested in a new type of bowl made from dinosaur juice … except for the lid.


The lid turned the plastic bowl into a storage container, and that was more useful than just a bowl. It was water- and air-tight, similar to glass jars but cheaper, and colourful. the air-tight seal helped keep food from drying out in refrigerators (also new tech at the time).



Patent application extract for the Tupperware flexible lid

2. Child (also 1940s)

But colours alone didn’t grab attention in the post-war era.


Tupper had praise for the Wonder Bowl from designers and the plastics industry, but was having trouble selling them through the major sales channel for the period: Department Stores.


That sounds strange to say today, but in the 1940s it was just too different, too new. Yes the Wonder Bowl was lighter than ceramic and less fragile than glass, but plastic was a new product and people weren’t used to it yet. They just couldn’t see the utility of Tupperware, or indeed the coolness of bright orange or avocado green as product colours.



3. Lover (1950s & 60s)

Tupperware grew out of its child phase when consumers really understood how to use it. That sounds strange to say today, but that patented Tupper airtight seal had to be “burped” to make it work.


But once consumers had learnt how to Burp the Baby, it was Miami mum Brownie Wise who brought Tupperware to the masses so they could fall in love with the Child.


The Home-selling model was not new, businesses had been using it for a long time to demonstrate their products Direct To Consumer - think of it as analog targeted ads, if you opened the door then you experienced the ad in person.



Happy guests at a Tupperware Party (ai generated)


But Wise tapped into something new - a women-centred party mode for in-home demonstrations. At first she ran her own Tupperware sales business, and her operating model is now very well known:


  • Client engagement wasn’t door-knocking, it was by invitation (creating exclusivity).

  • Product Demonstrations weren’t just demos, they were parties where guests could touch, feel, and use the products.

  • The parties were designed to familiarise buyers with the products, like party games such as throwing a sealed Wonder Bowl full of grape juice to show the strength of the Tupper seal.

  • Tupperware hostesses received merchandise in return for access to their homes and their social networks.


(Little know factoid about the party sales model at this time: Women at the parties were encouraged to sell more via the slogan "No Sex, No Sup, Just Tup-Tup-Tup!”)


In the 1950s Wise left her business to become VP Marketing for Tupperware and doubled down on the Party sales channel, building a dealer network across the US.


1950s newspaper advertisement for Tupperware Hostesses

And that network help America fall in love with the Child.


By 1954 annual sales were $25m and the product range expanded. The dealer network grew to over 20,000 people - and none of them were Tupperware employees.


Growing Friction between Tupper (the product genius) and Wise (the sales and marketing genius) became too great, and Tupper sold the business in 1958 to Rexall Drugs for $16m. Wise was fired as part of the deal and never returned to the company.


In the 1960s Rexall took Tupperware global, expanding to Europe, Central & South America, and Australia.


Historical footnote: The first Australian Tupperware party was held in Camberwell by Mary Paton in her mother’s home. Her sister Ruth became the first Australian Demonstrator.


4. Soldier (1970s to 80s)

Things got serious in the 1970s, as Tupperware set out to conquer the world.


Having used its acquisition of Tupperware to diversify its product offering, leverage the direct sales model, and grow internationally, Rexall aka Dart Industries realised focusing on Tupperware was its future so it:



The company’s strategy was so successful it doubled earnings every 5 years and by 1976 reached over $500m.


But old soldiers slow down. By the early 1980s Revenue and Profit were declining:


  • By 1983, sales had dropped by 7% and earnings fell by 15%.

  • In 1984, sales fell 6% from $827 million to $777 million, while earnings plummeted 27% to $139 million.

  • The downward trend continued in 1985, with sales dropping to $762 million and earnings declining to $96 million.


Several factors contributed to Tupperware's struggles:


  • Increased competition from companies like Rubbermaid Inc. and Eagle Affiliates.

  • Economic recovery led many part-time sales representatives to find full-time work elsewhere.

  • More women entering the workforce reduced the pool of potential sales representatives and party attendees.


As part of its growth strategy Dart Industries had merged with Kraft Foods in 1980, but it didn’t stick, and the two companies demerged in 1986.


5. Middle Age (1990s to 2000s)

What characterises Middle Age for you? Is it that time of life where your career gets settled, you maybe pick up a couple of hobbies? Because that’s what happened to Tupperware as its investments in previous decades began to pay off. It started to focus on the important things in its life and, yes, had a mid-life crisis.


Reaping the rewards of its previous international expansion, international sales accounted for more than half the company’s revenue by 1992. By 1996 it was 85% of revenue and 95% of profits.


Tupperware’s red sports car (mid-life crisis) arrived in 1996, when it was spun off from its then owner Premark International and publicly listed.


6. Old Age (2010s to 2020s)

But in the end, Old Age catches up to all of us, and Tupperware was no different.


With its US sales still pretty much a basket case the company decided to return to a more traditional sales channel by inking a deal with Target to sell products in the US. Remember how this didn’t really work for them in the 1940s? Well it wasn’t going to return the company to greatness in the 2000s either.


It therefore had to rely heavily on its international business, and in fact leaned into it, receiving awards for "Most Favored Brand by Women" and "Company with the Best Corporate Face" in 2008 for success in China, India, and Indonesia.


This worked for a little while but its sales never really recovered:

Year

Revenue (Millions of US $)

2009

$2,128

2010

$2,300

2011

$2,585

2012

$2,584

2013

$2,672

2014

$2,606

2015

$2,284

2016

$2,213

2017

$2,256

2018

$2,070

2019

$1,614

2020

$1,559

2021

$1,601

2022

$1,304


Old Age means dealing with physical and cognitive decline, and for some people this means dealing with a large number of issues concurrently.


Again, Tupperware was no different. It was having to deal with:


  1. Changing consumer behaviour: Consumers shifted away from traditional direct sales models, preferring online shopping and retail stores.

  2. Competition: Increased competition from other brands offering similar products at lower prices, including free restaurant to-go boxes and products from companies like Rubbermaid and Clorox's GladWare.

  3. Failure to appeal to younger consumers: Tupperware struggled to attract younger demographics, who were less interested in the traditional party-based sales model.

  4. Economic challenges: The company faced rising costs for raw materials, labor, and freight, which negatively impacted profit margins.

  5. Sales force erosion: Tupperware experienced a decline in its independent sales force, particularly in the United States.

  6. International market challenges: The company faced slipping sales in key markets like Latin America and Japan.

  7. Pandemic impact: While Tupperware initially saw a resurgence during the COVID-19 pandemic as more people cooked at home, this boost was short-lived. As restrictions eased, demand decreased.

  8. Slow adaptation: The company was slow to adapt to changing market trends and consumer preferences.

  9. Shift in sales strategy: Tupperware's move towards retail partnerships (e.g., with Target) and online sales had mixed results, potentially disrupting its traditional direct sales model.

  10. Financial issues: By the early 2020s, Tupperware was facing significant financial challenges, including debt problems and inconsistencies in financial reporting.


These factors combined to create a perfect storm for Tupperware, leading to a substantial decline in revenue and ultimately contributing to the company's decision to file for bankruptcy protection in September 2024.


7. Second Childhood

Shakespeare’s Second Childhood is the realisation that a person is no longer able to perform basic tasks such as bathing, eating, and going to the toilet. Physical frailty and incapacity no longer allow them the freedom to live unassisted.


Exactly the point Tupperware has reached.


Hence Tupperware filing for Bankruptcy.


Chapter 11 bankruptcy is a form of bankruptcy in the United States that allows businesses to reorganize their debts and operations while continuing to function. Here are the key points about Chapter 11 bankruptcy. It's designed to give companies an opportunity to restructure their finances and operations to become profitable again, rather than liquidating assets.


And that’s the type of assistance CEO Laurie Ann Goldman knows Tupperware Brands needs, to “further advance Tupperware’s transformation into a digital-first, technology-led company”


So we'll finish with a bit of the old Tupperware, in a digital format:






 

Growing Businesses really benefit from a commercially-oriented CFO. For many businesses the ideal way to access this expertise is via a Fractional CFO.


If your business is growing and you don’t have a CFO - contact Ascern!


 

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