New Delhi: Till at least as late as 2014, Tupperware was a B-school case study. An example of how innovation at a product level alone is not sufficient, unless backed by innovative sales approaches. When Earl Tupper launched his leak-proof double-sealed patented soft plastic containers in 1946, no one in the US thought much of it. Jars were meant to leak, and so what if they didn’t? There wasn’t much of a need gap being sealed by those fancy plastic boxes with a unique lid. Tupperware would have never survived 78 years if it wasn’t for one woman who later became its Vice President for Marketing.
Tupperware’s moment of reckoning came in the post-World War II era when the boomer generation returned home and the baby boom meant more wives were at home, with arguably more time at hand.
In came Brownie Wise, a socialite and motivator, who convinced Tupper to allow her to sell Tupperware at social gatherings. In her first of many to follow ‘sales parties,’ Wise invited a group of friends – all women – to her home and started hurling Tupperware jars filled with cold coffee at her guests. If they caught it, nothing spilled on them. If they didn’t, the jars fell but didn’t break. Even the lid didn’t come off. The weapons she attacked her guests with came in different shapes, sizes and colours.
This simple exercise established to her affluent group the three USPs of Tupperware – 1) leak-proof boxes; 2) unbreakable; 3) diverse.
Welcome to Direct Marketing 101
Brownie Wise’s simple sales strategy was direct and effective. She converted all her friends into ambassadors of the Tupperware brand, and in turn, sales agents. Each of these already impressed ‘customers’ enrolled as saleswomen. They organised their own sales parties, invited their own friends and played the same trick on them to eventually covert them into a sales force. They took a cut from the margins. The network grew exponentially, as did sales.
Tupperware innovated with form and introduced water bottles and sippers to its mix. All its products came with a lifetime guarantee. Its colours never faded, they never broke, and the lid always fit. The microwave and dishwasher wave of the 1980s and 1990s made Tupperware a kitchen favourite in the US. But Tupperware didn’t want to box its ambitions.
The brand expanded to 80 counties across six continents. Then it wanted Antarctica in the mix, so even though it did not sell specifically at the south pole, the company introduced a line of compact and round-edged boxes that were safe to freeze food in. Interestingly, this was branded as Tupperware Antarctica.
By the early 1990s, Tupperware was clocking sales of over a billion dollars a year. 2013 was Tupperware’s best year as it recorded sales of over $2.7 billion worldwide. Almost a third of that came from North America. When it listed on the bourses in 1996, its shares traded at $42 apiece. In December 2013, the year it recorded peak sales, the share price had more than doubled to $94.
Today, the shares are trading at 50 cents. Tupperware filing for bankruptcy was in the making for years. Sales consistently de-grew from the 2013 peak, barring a marginal uptick in 2020 during the Covid-19 pandemic.
How did Tupperware fail?
A great idea is often defined by its timing. Direct selling outlived its real utility. Women were no longer domesticated or kitchen-bound. The customer had evolved, so had competition. Rivals came from all directions – Walmart’s China-made plastic boxes to the emergence of glass as a preferred material.
Tupperware’s popularity made the brand a generic noun for plastic boxes that looked and felt like Tupperware but were cheap imitations. And guess what? They did the job too. The USP of airtight, leak-proof, unbreakable plastic boxes weren’t USPs anymore. That the original brand sold at a premium did not help its reach widen to utilitarian bargain hunters.
And then came the great US slowdown. High inflation, high unemployment, and high interest rates soiled the consumption story. Tupperware had to think out of the box. In October 2022, it finally ditched the direct selling ‘only’ approach and occupied shelf space in Target stores in the US. The strategy proved to be too little, too late to tame declining sales.
A mountain of debt, reportedly $700 million, with a topline tapering down to just $1 billion resulted in repayment defaults.
A New Case Study
Nothing lasts forever. The Tupperware case study will need to be rewritten with a new chapter that innovation in product and sales is not enough. Companies need to constantly question their existence and reevaluate their strategies to adapt to a changing world, diversify into new territories, or admit to management failure and sell out before the music stops.
As the US Bankruptcy Court in Delaware admits Tupperware into insolvency, the last few years reek of leadership incompetency in sensing trouble. An aggressive distribution strategy should have been implemented back in 2014-15 when the direct selling model stopped delivering numbers. A new product approach to appeal to the Gen Z consumer at a price and place of the spoilt-for-choice consumer should have made its way into Tupperware’s boardroom.
The product-market fit was beginning to smell. The leakage of consumers needed plugging. Tupperware’s management failed the brand and broke the unbreakable.
Companies need to constantly question their existence and reevaluate their strategies to adapt to a changing world, diversify into new territories, or admit to management failure and sell out before the music stops. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
