Tupperware's problems building for years

Latest: Tupperware to close its only US manufacturing plant in fall 2024

Tupperware's shocking news that the company may not be able to survive probably should not be so shocking after all.

And even if Tupperware Brands Corp. ends up going out of business, one retail analyst believes the brand name will live on.

The company, etched in so many minds for a lifetime now, had been heading toward April 7, 2023, for a long time, according to Neil Saunders, managing director of the retail division at GlobalData, an information and analytics company.

That's when company officials gave the stock market warning that the company might not survive.

"Tupperware as a business has really been in decline for quite a while. It had a brief rally during the early part of the pandemic. Because we were all cooking from home and buying home stuff. But really the long-term trend is decline," Saunders said.

"The model that Tupperware uses, that direct selling model, is still a valid model. But it's just not as popular as it once was in terms of consumers, especially younger customers. It just really doesn't have much traction with them," he said.

The company's stock price was trading last week for a buck and some change after company officials warned the company might not be able to survive, shedding about 40 percent of its value or so compared with before the news hit. Shares were around $4 at the first of the year and around $20 a year ago.

In late 2013, almost a decade ago, shares traded at one point over $95. And sales that same year were $2.67 billion, double the $1.3 billion that the company posted in 2022.

Make no mistake, Tupperware is in a world of hurt. The signs have been coming for quite some time, it turns out. But this latest round of bad news is the one that's truly caught the public's attention.

"This has come to a head now, but a lot of this isn't a new thing," Saunders said.

Linda Bolton Weiser, up until recently, followed Tupperware as a stock analyst for D.A. Davidson & Co. She recently dropped coverage because of the company's low stock price but did provide some perspective on the company's situation.

Weiser, who had covered Tupperware on two different occasions during her career, said years of underinvesting in the company is causing the current problems. The company has not spent enough money on technology, a point that both a former chief financial officer and the current CFO have mentioned, she said.

Another issue is that Tupperware, which has long relied on at-home sales parties, also decided to start selling through retail at Target stores.

"The current CEO is embarking on more of an omni-channel approach. So that has required some investment. To go into the regular retail channel, Target and other stores, that requires a lot of investment to be able to have a supply chain that can support selling to Target," she said.

Tupperware now finds itself in danger of being delisted from the New York Stock Exchange because it has not filed its annual report for 2022. And the company is saying the market should not rely on certain past fiscal reporting.

Tupperware's demise actually goes back several years, but the company had been able to manage because of a relatively strong position in the past, Saunders said.

Even though COVID-19 gave the company a temporary boost early on, the ongoing challenges of lockdowns eventually created more problems than advantages.

"Over the past year, they have seen a massive reduction in the number of people going out and selling Tupperware. And, of course, when you have fewer boots on the ground, your reach is really diminished and that put pressure on top line numbers which now are filtering through to the bottom line on the profits that Tupperware is making, or not making, in this case," Saunders said.

People's views about gathering, thanks to COVID-19, have fundamentally changed. And this makes it harder for sales reps to make money.

"A lot of people are saying, 'It's too much effort, it's too much hassle, the rewards aren't good enough,'" he said.

Tupperware is still an iconic brand with great name recognition, but times have changed.

"Tupperware is great solution and a great product, but it's somewhat more expensive," Saunders said, and many people are not willing to pay the difference in a food storage container market that has become commoditized.

In other words, this is no longer the 1950s, or even the 1970s for that matter. And plastic containers purchased at discount stores are viewed as being good enough.

"In some ways, it was an important part of setting up a home. If you go back to Tupperware's roots, it was something that people would aspire to have. It was a new-fangled gadget almost. It was kind of a status thing. You have your important brands that formed part of your household and Tupperware was one of those," Saunders said.

"That has gone out the window. No one would see Tupperware as being a status symbol. A lot of people are just focused on convenience. I'd say storage containers, especially for the kitchen, are seen as commodity products," he said. "It's just not seen as must-have brand anymore. It's a brand that people remember and have an affinity to. But it's not a brand that they would necessarily aspire to have."

In other words, Gen Z just does not care.

The retail analyst does not know whether Tupperware Consumer Brands, the company, will survive.

But he does know the Tupperware name still has value and will remain one way or another.

"At the end of the day, it's still quite a strong brand. It's a well-recognized brand. It's an iconic brand. If somebody could buy it at a discount they could do something with it. They can reinvent it," he said.

He believes the company's ultimate success involves moving away form the direct-selling model and moving deeper into retail.