Tupperware, the US-maker of food storage containers, has warned that it could go bust unless it can quickly raise new financing. Shares in the 77-year-old firm plunged on Monday after it said there was “substantial doubt about its ability to continue as a going concern”.
Tupperware has been attempting to reposition itself to a younger audience. However, it has failed to stop a slide in its sales.
The firm became well-known in the 1950s and 1960s when people held “Tupperware parties” in their homes to sell plastic containers for food storage. Tupperware still employs a direct sales force - who earn a percentage of all the goods they sell - as well as selling goods on its website.
In a statement, Tupperware said that its shares were in danger of being delisted from the New York Stock Exchange because it had not yet filed its annual report. It also warned that it had to renegotiate its loans after already amending its loan agreements three times since August 2022.
Tupperware said it was struggling with higher interest costs on its borrowings while it attempts to turn the business around. The company said it “currently forecasts that it may not have adequate liquidity in the near term”, adding that it “has therefore concluded that there is substantial doubt about its ability to continue as a going concern”.
Tupperware’s share price dropped by nearly 50% on Monday.
The company said it was working with financial advisers to secure more money and investment. It is also examining whether it can sell property and cut jobs.
The end of an era is at hand … even Brownie couldn’t save the firm now …
Lakeland think so. Their sales are very buoyant and since they branched out by providing many other household product needs, they have become a high-street popular shop.
AFAIK, Lakeland is a UK only company with a couple of outlets in the Middle East.
OTOH, Tupperware, in the 1990’s, was a worldwide business (over 100 countries), employing millions of direct salespeople on contract. Since then, Tupperware has, increasingly, lost markets - the UK, the Netherlands, Israel and New Zealand. Changing the business model (to stores outlets) in the US was disastrous. What was a bouyant market in the Far East is now floundering. There’s just not enough money coming back to a juggernaut of a company.
I wonder how much covid played a part in the decline of Tupperware. You can’t have a Tupperware party if you can’t have a party. Many of the items sold better if they could be demonstrated.
Back in the day, I bought a kit and went to a handful of Tupperware meetings, hoping to sell some Tupperware. I’m not a cook and don’t like parties. It didn’t go well.
but it’s one of those shops you go into and see all these things you never knew existed but now you’ve seen them you really want them and can’t live without them!
We’ve got one in Cadbury Garden Centre, which isn’t far away from me
It’s nice because you can make a day of it, go round the garden centre, have lunch, browse in Lakeland and the garden centre has lots of facilities like that too
However, Neil Saunders, managing director of retail at the consultancy GlobalData, said Tupperware has “failed to change with the times in terms of its products and distribution”. He said that the method of selling direct to younger customers through Tupperware parties “was not connecting” and that even older customers who “remembered Tupperware in its heyday” have moved on - customers can now buy cheaper or more fashionable containers in shops or online.
Meanwhile, Tupperware said in March that its workforce of direct sellers had shrunk by 18% in 2022 compared to the previous year. It was also impacted by Covid lockdowns in China which hit consumer access to products.
Mr Saunders also said that Tupperware - while considered innovative many years ago - was perhaps not as inventive and stylish as other brands such as Joseph Joseph, the home goods design company started by twin brothers Antony and Richard Joseph. Younger customers have also embraced more environmentally-friendly products such as beeswax paper (2) to keep food fresh which can be used again and again, he said.
(1)
(2)
Beeswax wrap is a food wrap material consisting of a coated fabric, most commonly cotton. It is made by infusing cotton with food-grade beeswax, rosin, coconut oil, and jojoba oil. The wrap is mouldable, grippable, and tacky. It can be shaped around containers or food products. Beeswax wrap is a reusable and sustainable alternative to plastic wrap and single-use plastic. It has the ability to counteract environmental issues such as plastic pollution and food waste.
Beeswax wrap’s main use is food preservation. It is breathable and allows food to stay fresh for longer, reducing food wastage. After each use, beeswax wrap can be washed and air-dried. Beeswax wrap usually loses its grip after one year. When the wrap loses its grip it can be composted. Beeswax wrap is criticized for its high price when sold commercially and the high level of maintenance it requires, especially when compared to its single-use plastic alternatives.
It’s competition, although to be honest I’m surprised Lakeland have survived so long. Their main competitive advantage is that they have been very shrewd in choosing their locations. Usually in shopping areas near luxury shops or coffee shops, they catch shoppers when they are at their most relaxed and open to the new experience of a banana holder or mushroom cleaning brush.
Tupperware did very well until China took over markets with mass produced cheap substitutes. Seems they didn’t try very hard to differentiate their brand in a changing market environment.
The business, which was founded in 1956 in Windermere, Cumbria, has posted pre-tax profits of £1m for 2021, up from £332,000 in 2020.
The last time the company’s profits were higher was in 2017 when they totalled £2.3m. Lakeland had been loss-making in both 2018 and 2019.
According to the newly-filed documents with Companies House, Lakeland’s turnover also rose from £151m to £153m but the number of people it employed during 2021 fell from 1,488 to 1,405.
Tupperware is worldwide but no longer has a presence in the UK. Its products, however, are still available online.
Tupperware Corporation, a $1.1 billion multinational company, is one of the world's leading direct sellers, supplying premium food storage, preparation and serving items to consumers in more than 100 countries through its Tupperware brand.
In partnership with more than 1.3 million independent sales consultants worldwide, Tupperware reaches consumers through informative and entertaining home parties; retail access points in malls and other convenient venues including SuperTarget; corporate and sales force Internet web sites; and Home Shopping Network(SM).
Additionally, premium beauty and skin care products are brought to customers through its BeautiControl brand in North America and Latin America.
The companies differ markedly both in size and served markets.
Despite attempts to freshen up its products in recent years and reposition itself to a younger audience, it has failed to stop a slide in its sales.
The firm’s ‘Tupperware parties’ made it an icon during the 1950s and 1960s consumer revolution, and its air-tight and water-tight containers took the market by storm.
But its core business model of using self-employed salespeople who sell primarily from their own homes has been going out of fashion for a while, and was retired altogether in the UK in 2003.
Now company bosses have admitted that, without new funding, a brand name which has passed into common parlance could vanish from the market.
“We use it (Tupperware) as a noun, which is quite unusual for a brand,” said Catherine Shuttleworth, founder of retail analysis firm Savvy Marketing.
“I think a lot of younger people will be surprised it is a brand in itself.”
While Tupperware was a “miracle product” when first sold decades ago, Ms Shuttleworth added, the market has been flooded by companies offering cheaper alternatives in recent years.
