Tupperware Brand Check-up: When the Parties Stopped
Tupperware filed for Chapter 11 on September 17, 2024, and the New York Stock Exchange suspended trading in its shares the next day. The company says its 1946 container created the modern food storage category. Its last reported annual sales were less than half their 2013 peak, its sales force was shrinking and warnings about its survival had piled up. We look at why.
Key takeaways
- Tupperware’s last reported annual net sales, $1.30 billion for 2022, were less than half the $2.67 billion it reported in 2013.
- The party plan that built the brand was shrinking: the average active sales force fell 18% in 2022, and retail made up only four percent of revenue.
- Going-concern warnings in November 2022 and April 2023, a late annual report and $705 million of borrowings left little room to fund a turnaround.
- A 2023 share rally from $0.62 to $5.38 in two weeks came with reports of atypical retail investor interest, while sales for the first nine months of 2023 fell 16%.
Download the full Tupperware Brand Check-up (PDF): vital signs, timeline, diagnosis, treatment and sources.
The symptoms
Net sales peaked at $2.67 billion in 2013. In 2022, the last full year the company reported, they were $1.30 billion, down from $1.60 billion in 2021. The slide continued: sales for the nine months to September 30, 2023 were $828.3 million, against $990.4 million a year earlier.
The sales force shrank too. The average active sales force fell 18% to about 313,000 in 2022. In the third quarter of that year, the active sales force was down 12% from a year earlier, and net sales fell 20%.
Diagnosis: a famous brand tied to one channel
Earl Tupper set up Tupperware Home Parties in April 1951. For decades, the party plan was both the sales channel and the brand experience. In its 2022 annual report, the company still said it primarily used a direct selling model, and that retail sales made up four percent of revenue. The party system had worked so well, the Associated Press noted, that Tupperware eventually removed its products from stores.
A channel carries its own audience. When Tupperware products reached more than 1,900 Target stores in October 2022, then-CEO Miguel Fernandez wrote on LinkedIn that younger customers less familiar with direct sales would “now find our brand in retail.” The job customers hire a food container for had not changed. Where they went to buy one had.
The money ran short before the turnaround worked
In November 2022, the company said its risks raised substantial doubt about its ability to continue as a going concern. In April 2023, it repeated the warning, said a breach of its credit agreement covenants was probable and missed the deadline for its annual report while it worked through accounting problems and restatements. The shares fell nearly 49% on April 10. The company had $705 million of borrowings under its credit agreement at the end of 2022. Its 2022 annual report did not arrive until October 2023.
This is a brand problem as well as a debt problem. Retail partners, lenders and independent sellers all need to believe a company will be around next year.
The 2023 share rally
Meanwhile, the shares went from a $0.62 close on July 18, 2023 to $5.38 on August 1. The company’s annual report described “strong and atypical retail investor interest, including on social media and online forums,” and price moves “unrelated to the Company’s operating performance.” By October 5, 2023, the last sale was $1.26. Sales kept falling.
Chapter 11 and the NYSE suspension
On September 17, 2024, Tupperware and some of its subsidiaries filed for Chapter 11 in Delaware. Laurie Ann Goldman, chief executive since October 2023, said “the Company’s financial position has been severely impacted by the challenging macroeconomic environment.” The company said it would seek court approval for a sale process “to protect its iconic brand.” The filing listed $1 billion to $10 billion in estimated liabilities. The NYSE suspended trading the next day, and the shares are set to be removed from the exchange on October 15. Their last NYSE close was $0.51 on September 17, against a record $96.00 in December 2013.
Treatment
Whoever owns the brand next inherits a known name and a channel problem. A Target listing is a tactic. Deciding which channel leads, and what the others are for, is the strategy. Our treatment:
- Make retail and online the main routes to buy, and keep consultants as a service and community channel.
- Give shoppers a plain reason to pay more for the name than for an unbranded container.
- Report clean numbers on time, so retailers, lenders and sellers can plan with the company.
What growing companies can learn
Your channel is part of your brand, and channels age with their customers. Watch the leading signals, such as active sellers, repeat buyers and the share of sales from new customers, not only revenue. And treat a channel shift like brand building: it takes years, so start while the core business can still pay for it.
This check-up uses public information available on October 8, 2024. It is brand and marketing analysis, not investment advice.
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Brand Doctor is based in Vancouver and offers a free marketing diagnosis to businesses across Canada, in person or remotely. You leave knowing what’s holding growth back and what to fix first.
