You don’t have to look too far into most kitchen cupboards to come across a Tupperware container or two, or three – maybe more.
The plastic may have aged well, or, it may have been granted a new lid or two under Tupperware’s famed warranty, these days subject to postage costs and a fair list of conditions.
Tupperware’s been an iconic household item for nearly eight decades, but it’s lost its foothold in the market as disruptive online shopping has overtaken in-house demonstrations and, importantly, as significantly lower-cost alternatives have emerged on supermarket shelves.
Aside from a small surge in popularity during the COVID pandemic, when shoppers were home-bound, the NYSE-listed company has lost its customers and its relevance to younger generations.
Tupperware was founded in 1946 after Earl Tupper came across the lightweight, flexible and durable plastic. Something so new, it amassed global interest, with demonstrations required to educate customers on how the then-innovative products worked.
Demonstrators earned commissions by presenting at Tupperware parties often held in-home by friends, sisters, mums, aunts and grandparents for special events, or just an outing and get-together. Party hosts would be rewarded with product gifts and discounts.
But the kitchen storage and gadgets brand has struggled to connect to younger e-savvy consumers who don’t come with the patience to sit through a product-endorsing party or live demonstration.
And so, Tupperware shares are down 68 per cent year-to-date, they’ve dropped more than 80 per cent over the past six months, and they’re down more than 96 per cent over the last five years.
In March this year, Tupperware reported its net sales for 2022 were $1.9 billion (US$1.3 billion), down 18 per cent from the previous year.
The 77-year-old brand now faces cash flow and liquidity issues with mounting pressure from its creditors. It also faces the threat of de-listing from the NYSE if it can’t file its annual report.
The alternatives
At the front of a kitchen plastics cupboard, these days are more likely to be reusable containers from last night’s takeaway or cheap containers from Woolworths (ASX:WOW) or Coles (ASX:COL).
For comparison, Tupperware sells a singular square Modular Mate Airtight Container for $30, whereas a similar Sistema sandwich box is $10 at Woolworths.
Tupperware’s Premiaglass 1.5-litre container is on sale for $21, while a similar Decor Glass Vent and Seal 1-litre container can be purchased for $12.50 at Woolworths.
Whilst that’s not comparing warranty or other factors, the bottom line is shoppers can get an item to do the same job as Tupperware for about a third of the price.
And it would appear that Tupperware could be having its very own ‘Kodak Moment’. It needs to find financing fast in order to survive.
Kodak and other iconic brands that lost their edge
Once a giant in film photography, Kodak became a sensation in the 1970s with its innovative ideas and new camera inventions. Despite releasing its first digital camera in 1991, for the 20 years thereafter, sales continually declined – leading to bankruptcy in 2011.
Unfortunately for Kodak, the industry continued to take many turns in the shift to digital cameras and social media and the brand was unable to stay relevant to the market.
Experts put the demise down to the company’s failure to reinvent itself, complacency, and a lack of organisational agility.
Polaroid, established in 1937, was best known for its instant film and cameras. It suffered a similar fate in 2001.
Another example is Blockbuster, which struggled after the introduction of Netflix. Its own Blockbuster Online came too late; it declared bankruptcy in 2010; and, it was delisted from the NYSE.
MySpace lost its space to Facebook.
Set up in January 2004, the site became the world’s leading social media platform. It reached more overall page views than Google and 22 million users in its first three years. It had 100 million accounts by 2006.
But MySpace was unable to innovate and evolve at the same pace as the fast-growing Facebook.
So what can investors learn from all of this?
A key learning from the latest big brand to be teetering on the edge is that companies need to keep an eye on the future. They need to stay abreast with technology, with societal trends and remain relevant.
Relevance is a company’s ability to be nimble and stay up-to-date with changing market conditions, technological advancements, and shifting consumer and generational preferences.
They also need to remain cost-effective and competitive with existing alternatives and those that are emerging.