Tupperware has been struggling for years. Three charts show just how bad it’s been.
Apr 23, 2023, 2:00 PM
(Stephen M. Dowell/Orlando Sentinel/Tribune News Service via Getty Images)
(CNN) — Tupperware may be on the verge of collapse, but the 77-year-old business’ potential demise isn’t necessarily a harbinger of worsening economic conditions.
While sales data shows the rest of the US consumer retail sector — including some of the company’s competitors in the food storage space — seems to be recovering from the pandemic dip, Tupperware sales continue to decline.
Some business experts say that’s because Tupperware has failed to adapt to changing consumer behaviors. And now, faced with mounting debt, declining sales and plummeting stock prices, perhaps little can be done to save the company from bankruptcy.
In a statement emailed to CNN, a Tupperware spokesperson said the brand has been affected by “the pandemic, inflation and high interest rates,” and is working with financial advisers and partnerships including Target and Amazon to strengthen the brand.
“For over 75 years, Tupperware Brands has been one of the world’s most beloved, iconic household brands — and we are excited to remain at the heart of dining room tables, kitchen counters and pantry shelves for many more years to come,” the spokesperson said in the statement.
The Tupperware brand name is so iconic that it’s become shorthand for all food leftover storage. That might be part of the problem, as other brands have emerged to compete against Tupperware, sometimes at lower price points.
“A great brand name can be a blessing or a curse,” said Christie Nordhielm, a marketing consultant and adjunct professor at Georgetown University’s McDonough School of Business. “It’s a curse when you kind of rest on your laurels and milk the brand for profits and don’t continue to invest in a brand.”
If you bought your “tupperware” in a store before October 2022, it was unlikely to be the actual brand. The company just introduced its products into Target stores last fall, a move that is likely, “way too little, too late,” said Barbara Kahn, a professor of marketing at the University of Pennsylvania’s Wharton School of Business.
“At worst, it’s one of these things where their brand name is almost generic, and not in a good way,” Kahn said. “That doesn’t have to be a bad thing… People might call things Kleenex, but they know the difference,” she added.
Tupperware has historically only sold to consumers through “direct sales,” most commonly at “Tupperware parties.” These parties were gatherings where people who enjoyed the product would demo and sell the Tupperware brand to their friends and acquaintances. That direct selling model worked well at first but fell out of favor as consumer habits changed in the decades preceding the pandemic, according to Kahn.
The fact that Tupperware moved away from that direct sales model and into Target was an “admission” that their core business model wasn’t working, said Tim Calkins, a marketing professor at Northwestern’s Kellogg School of Business. While some businesses may have taken hits during the pandemic, Tupperware’s decline wasn’t sudden.
“The company has gradually lost steam,” Calkins said. “It hasn’t gone off a cliff so much as over many years it’s just become weaker.”
The pandemic, which affected most businesses negatively, just exacerbated those failures of Tupperware to adjust to changing consumer behaviors and competitive landscapes.
“You could have seen them making that transition very beautifully, but instead they moved into brick and mortar stores,” Nordhielm explained. “If you go and look at Tupperware in a Target, all you’re doing is seeing how incredibly undifferentiated they are, how many other substitute storage containers there are available.”
Instead, people tend to compare the products based on price, Kahn said, and Tupperware’s most valuable asset — its brand equity — loses all its meaning. Tupperware has also failed to innovate in response to these changes in competition and consumer behavior, Nordhielm said. As a result, Tupperware’s sales have been declining for years.
Meanwhile the rest of the consumer retail sector is showing signs of recovery after the pandemic. At the worst of the pandemic, sales saw a stark decline, but they have been improving since, recovering more than 60 percent since their nadir in April 2020.
“The state of the consumer remains relatively strong,” Hamilton said. “If a recession is in the cards, it’s not showing up yet in measures for the consumer sector.”
But the recovery in sales doesn’t mean other retailers are immune to collapse. Calkins points out that financing remains tight, creating a challenge for businesses across the sector that face high debt burdens or need support for innovation. Tupperware may be an early casualty because it was already in a weak position. The brand had to restructure its debts in May 2020.
“Sadly, I think this is not the last one of these stories we’re gonna hear,” Calkins said.
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