Why Tupperware is on the verge of going bust

In April, the iconic US company Tupperware filed a statement suggesting that the company was hanging on by a thread, with executives admitting "substantial doubt about its ability to continue."

In Jan. 2021, the stock price surged to $35 amid the COVID bubble, but it has been dropping steadily ever since. After the warning, the share price was nearly cut in half. Little more than a month later, the share price had been cut in half again, valued at just $0.72 by mid-May.

Image: Google

Tupperware was late in filing its annual report and is facing a serious shortage of cash. High interest rates are making loans more expensive. Its management is scrambling to figure out a way to survive, including layoffs or selling off other assets.

Tupperware was founded in 1946 by Earl Tupper to sell the airtight polyethylene containers he invented to keep food fresh longer.

Photo: A Tupperware impression mould from 1965

The brand didn’t explode until pioneering female businesswoman Brownie Wise got involved. Ambitious, she joined the company as a salesperson after her former employer told her "not to waste her time" because management was "no place for a woman."

When she joined the team, Wise quickly grew a large sales force and introduced the idea of "The Tupperware Party." With a keen eye for what appealed to women, she convinced Tupper to remove the product from stores and only sell through parties.

Photo: Brownie Wise tossing a Tupperware bowl

Wise became a vice president of Tupperware Home Parties in 1951, and soon after began organizing extravagant Jubilee parties for top sellers, with each one having different themes like "Wild West." She became the first woman to appear on the cover of Business Week.

Although Wise made Tupperware a household name and cultural phenomenon, she was forced out of the company for "undermining the company’s image" in 1958, after using Tupperware as a dog dish. Tupper removed her from the company history, burned copies of her autobiography, sold the company for $16 million, divorced his wife and moved to Costa Rica.

In the 1960s, the company expanded into Europe, Asia, Australia, Africa, and Latin America. But by 2003, it was started to show some signs of danger abroad.

In 1999, the company, which had sales of $1.1 billion, announced it would stray from the community sales only model and begin selling on a TV shopping network. Later, the company also began to sell Tupperware through its website online. This, in a way, competed with the original party model.

It was around this time that the direct sales model was showing signs of breaking down. In 2003, Tupperware closed operations in the UK and Ireland, citing customer dissatisfaction with the sales model. It tried relaunching in the UK, but the relaunch was cancelled.

Despite some early troubles, the company had nearly 2 million direct salespeople on contract in 2007. Even at this time, buying through people in your community was the main way of acquiring those coveted plastic containers. But in 2022, it said its network of direct sellers had shrunk by 18% year-over-year.

Neil Saunders of GlobalData told BBC that the brand has failed to change with the times. Not only was the sales model confusing, but the product also lost its pizzazz as new stylish competitors came along and younger customers opted to stay away from plastic.

In 2018, Tupperware withdrew from Israel, leaving 2,000 agents without a job. In 2021, its operations in the Netherlands shut down. In 2022, the company said it was leaving New Zealand.

Besides a quick surge in sales during COVID, the tumultuous changes among its leadership suggest that trouble has been brewing for a while. In five years, it has gone through three CEOs. The latest CEO introduced a range of cooking materials, like a grill for the microwave.

In 2022, the company, faced with decreasing sales, broke 76 years of tradition and began selling Tupperware in a store, namely Target. It had previously done "pilot projects," but this was the real deal. The same year, it also started selling on Amazon to appeal to younger customers.

While the company says it’s doing everything to avoid total collapse, it recognized that it may be forced to discontinue operations entirely. Saunders told BBC that a larger company like Walmart or Amazon could also buy the brand.