💎 The Decline of the $2 Billion Tupperware Empire

When I was young, I remember my mother's Tupperware containers were essential to our kitchen. And god forbid we forgot our Tupperware snack box in school; we would be reminded every few hours till the box reached home safely.

The brand's innovative products and robust quality made it a household name, becoming synonymous with food storage in the 1990s and early 2000s. However, Tupperware's fortunes have changed dramatically over the past few years.

The 77-year-old US plasticware company is beginning to notice cracks in the formerly ground-breaking airtight sealing industry. Rising debts and declining revenues have raised questions about the company's solvency, and there are talks that the company would go bankrupt if fresh investments are not made.

In this week's newsletter, let's dive into the rise of Tupperware and explore the critical factors contributing to its decline.

Tupperware, the favourite household name

Tupperware's journey began in the 1940s when Earl Silas Tupper created the first-ever plastic container with an airtight seal. The company expanded globally and entered the Indian market in 1996, capturing hearts and dominating the market for years. At its peak, Tupperware had a global revenue of over $2 billion in 2013.

The revolutionary business model

Tupperware wasn't a loved product from day one of the launch. Tupper came up with a brilliant, flexible, odourless, non-toxic plastic and made it into storage containers with a unique Tupper Seal. Unfortunately, the Seal remained on the shelves since customers couldn't figure out how to use it.

Until Brownie Wise, an 8th-grade dropout, took the reins. She introduced what is famously known as the 'Tupperware parties' — or direct selling. Wise trained women across the US to host parties in their living rooms while selling the product to other homemakers. And in a few years, the product became an instant hit among homemakers.

Source: ABC News

Direct sales were an instant hit in India too. It eliminated intermediaries and kept prices competitive while fostering a social network of consumers who influenced purchases from their homes. This approach empowered women socially and financially from the comfort of their homes.

Other factors that contributed to Tupperware's popularity:

• Innovative products: Tupperware's patented airtight containers, modular design, and durable materials distinguished it from competitors and made it a popular choice worldwide.
• Strong brand image: Tupperware was perceived as a premium brand, with consumers associating its products with high quality and reliability.
• Global expansion: Tupperware entered new markets, capitalising on the growing demand for practical and durable food storage solutions.

But, the party is now nearing an end.

The end of the Tupperware era?

Despite its strong start, Tupperware's journey has slowed in recent years. In 2022, its global net sales fell to $1.3 billion, a significant drop from its 2013 peak. It may seem like this brand fell prey to the economic turndown caused by the COVID-19 pandemic. But the sheen of the Tupperware party met a gradual decline way before the pandemic caused a crack in retail sales.

What spurred the decline of Tupperware?

I recently found a thought-provoking Daily Mail article suggesting that women's professional growth contributed to Tupperware's decline.

Yes, Tupperware has always been a women-centric brand. They launched their products in the US when women gave up their jobs after their husbands returned from the war. But that was half a century ago.

The role of women in society has changed drastically since then. And I didn't completely resonate with that argument.

Avon is a prime example of a brand that thrived despite women's changing roles.

Established in 1886, Avon started as a door-to-door perfume sales company and later expanded into cosmetics and personal care products. Like Tupperware, Avon initially relied on a direct selling model, empowering women to become independent sales representatives.

With time, Avon adapted by revamping its marketing strategies, embracing digital channels, and diversifying its product range to cater to modern lifestyles.

I believe that the evolving society cannot be blamed for the collapse of its primary sales channel. Instead, its inability to adapt and innovate as effectively as brands like Avon spurred its decline.

In my opinion, two factors led to Tupperware's fall -

• The product's core - Tupperware is known for its high-quality plastic containers. Growing awareness of plastic pollution and shifting towards eco-friendly alternatives made Tupperware's plastic products less appealing to environmentally conscious consumers. There has been an increase in awareness about the impact of plastic usage in the kitchen. Further, consumers increasingly opt for glass and other material products to store their food from a health perspective.
• Inability to adapt - By the 21st century, the world had moved from direct sales to online shopping. Women moved on from being homemakers to working professionals. Yet, 80% of Tupperware's business still relied on direct sales. Its late entry into e-commerce and lack of a robust online presence made it difficult for the company to compete with digitally-savvy brands.

In conclusion, Tupperware's rise and fall is a cautionary tale for businesses to adapt and innovate constantly. The changing market dynamics and consumer preferences demand companies stay agile and embrace new trends to remain relevant and competitive in the long run.