Tupperware Bankruptcy: What Went Wrong?
News about Tupperware’s bankruptcy came as a shock to everyone. The company has been seeing financial trouble for the last couple of years - making it only the right choice to file for Chapter 11 in September 2024. From being a household name to filing for bankruptcy, Tupperware made several developments whether it was in the form of introducing new products or expanding the network of direct selling agents.
But what pushed the food storage brand to the point of bankruptcy? The article tries to explore this question.
Tupperware was started by Mr. Earl Tupper. No point in guessing that the brand name has its roots grounded in the chemist who eventually saw the contributions of Brownie Wise in forming a rock-solid foundation for Tupperware. She was the brains behind organizing a party plan system wherein the product would be pitched to other housewives through a demonstration. The strategy worked as women in large numbers were dearly impressed by the product and its quality to store food for a long time.
Some reports highlight that the core intention to adopt Tupperware products was to feed fighters of World War 2 better food. Irrespective of the objective, the Tupperware brand instantly struck all the right chords with women. Thereby, becoming a product that could be found in every household.
The brand came to India in 1996 with its first operation in Delhi. It had a workforce of not more than 15 employees along with around 30-40 sales force of women. Its direct-selling model worked in India, that is Bharat, and everywhere else. While many brands were struggling to reach the endpoint, Tupperware was thriving on its quality, product line-up, and the sentiment of personal touch via the sales model network.
Bankrupt Tupperware, as now known in the market, was once a leader in designing, manufacturing, and distributing food storage products. Details about Tupperware brands still show the company listed on the New York Stock Exchange (NYSE) with the ticker symbol TUP.
Analyzed reasons behind the downfall of Tupperware are:
Increase in competition; and,
Direct selling model losing its momentum.
The trigger point for increased competition is credited to the global Covid-19 pandemic. Once the wave worldwide started to cool down, customers were seen more inclined towards alternatives that were comparatively cheaper. All they wanted to do was continue storing food but at a lower price because the pandemic had left them in a bad financial position.
The direct selling model is not outdated. It is merely the rise of online stores and other shops among modern customers that is impacting the model.
Tupperware has done a lot to empower women in the business world by giving them independence with a support line of the corporate world. In fact, many women reported supporting their families with their hard-earned money.
The first thought everyone got in their minds after the news about Tupperware's bankruptcy was that the brand would fade out forever. As of now, there is no confirmation because the company is in talks with a group of lenders. If the deal goes through, then the group of lenders would officially take over the brand name and its operating assets. The deal is worth approximately $23.5 million in cash and more than $63 million in debt relief. It would transition Tupperware to a privately held company following its bankruptcy.
Not a lot has been said about the path that the new Tupperware brand would follow. However, it is likely that the company will hold on to its direct selling network through independent sales consultants. Also, products of the food storage company could soon be available in their original form over online platforms like Amazon in an increased number.
A talk between Tupperware and the group of lenders was initiated in October 2024. This solution first came as an alternative to the planned asset auction which has now been scrapped.
Sales of Tupperware had started showing weak signs. Not that the company never paid heed to it. Tupperware launched its gifting range, product sets for kitchen makeovers, and boosted its presence through exclusive brand stores plus webstore or eCommerce. It was simply a time for the company to introspect, or restructure itself with time - something that it never thought about or ignored the level to which it should have done.
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