ORLANDO, FLA. — With its venerable home parties — aided by new strategies like e-commerce and mall kiosks — Tupperware Corp. remains shielded from the mass-retail world that crippled Tucker Housewares, according to Tupperware's top executive. Rick Goings, Tupperware's chairman and chief executive officer, made it clear in a May 10 speech that his company enjoys its unique position. He said Tupperware makes premium housewares — "Rolexes, not Timexes" — with an emphasis on design.
After his speech, Goings told Plastics News that housewares molders need to differentiate their products. He called focusing on becoming the cheapest producer, "a war of attrition. And then when resin prices go up, they all die. And it becomes who's got the lowest labor. It's the wrong battlefield."
Goings was a keynote speaker at Antec, the Society of Plastics Engineers' annual conference in Orlando.
Zeta Consumer Products Corp. is running its Tucker Housewares and Renew-brand trash bag operations on limited production after filing for Chapter 11 bankruptcy protection. Acting President Alfred Teo laid much of the blame on an inability to pass along higher resin prices to retailers such as Wal-Mart and Kmart.
The power of big-box stores also made headlines back in 1995, when Rubbermaid Inc. (now Newell Rubbermaid Inc.), pushed through price increases. Retailers cut back shelf space for Rubbermaid and handed it to competitors.
Orlando-based Tupperware has had some problems in recent years, too, struggling with key Asia-Pacific markets and sales hit by unfavorable currency conversions, Goings said.
In 1999, Tupperware reported a profit of $91.3 million on sales of $1 billion.
Goings said the average Tupperware storage container costs $7-$10, compared with $3 for a mass-retail item. The premium price gives the company a cushion against spiking resin prices.
"[Resin] is a very small component, compared to the Rubbermaids and the others," he said.
Founder Earl Tupper originally tried to sell his revolutionary food containers in stores, but shoppers couldn't figure out how to use them. Then he hit on the idea of direct selling through parties.
"When you demonstrate the product to people, he found that people understand it and they loved it. Well, the rest is history," Goings said in his speech.
Fortune magazine hailed Tupperware as a major innovation in the 20th century. Today, the company claims that every two seconds, a Tupperware party is held somewhere in the world.
Goings stressed the importance of home parties, led by 1 million distributors worldwide. He called them "partners" who run their own business and said the system remains a bedrock for Tupperware. The sales person can demonstrate special features, such as polycarbonate parts, that justify the higher price. "We show what it is, one-on-one, with a million people."
Party-goers can get a lesson in cooking with the microwave — an appliance he said too many U.S. households relegate to a "$400 popcorn popper."
But Goings said it's a mistake to concentrate on any one selling channel. Malls, which killed Main Street, are under attack from category-killer stores like Circuit City. E-commerce threatens them all. Consumers now want the option of Internet buying, going to a store or having a party, he said.
To reach a Martha Stewart-watching housewares buyer, Tupperware hosted a one-hour show on Home Shopping Network. Many distributors held house parties at the same time.
Another new strategy is the kiosk — small free-standing displays set up in malls. Independent sales people, not Tupperware, own the kiosks. "We tested a few of those in malls two years ago, and in one year we went to 400. We're expanding worldwide."
Tupperware also is moving into e-commerce. Through its main site, tupperware.com, "we've reached millions of stranded consumers who haven't known how to find us and who haven't seen our products in years," he said.
Tupperware's biggest e-commerce challenge was finding a role for its distributors, he said. "How do you do it without killing your legacy sales force?" Tupperware is setting up individual sites for sales people for a modest fee, giving them a piece of the action.
But again, freedom from mass retail gives Tupperware flexibility.
"Rubbermaid's got an issue with that right now, that, yes, they'd like to make their product available on the Internet. But the big giant from Arkansas said, `You put it on the Internet, you can't sell in Wal-Marts.' We've got an advantage over them," Goings said.
Goings took a few slaps at Newell Rubbermaid in his speech. Although most people assume that Rubbermaid products pose the biggest competition, that's not true, he said.
"Mostly it's products sold by [upscale retailer] Williams-Sonoma, if the truth be known," he said. "Our sales force says it more accurately: `You put your food in Tupperware and your garbage in Rubbermaid.' They make trash cans. We make food storage and serving items."
