What is slowing down the 'Tupperware Party'?

It's a tall order for a brand to become a household name in India. For the American manufacturing giant Tupperware, the same is applicable. Along with triggering a sense of nostalgia, it still can be found in the Indian homes. For many, the brand's name was once synonymous with tiffin boxes and water bottles.

The American brand only entered the Indian market in 1996. This was 50 years after its establishment in the American market. At that time, tiffins and storage containers were primarily made up of aluminum, steel, or copper. The brand was able to create a place in the Indian households in the past two decades of its operation in the country.

However, recent reports point out that the business for Tupperware is going downhill at the moment. Tupperware is on the brink of going out of business as it's shares plunged by 49% on April 10.

On April 7, in a regulatory filing before the New York Stock Exchange (NYSE), Tupperware said that certain conditions and events have created a substantial doubt about its ability to continue its operations.

Without adequate funding or changes to its loan agreements, the brand’s management anticipates that it won’t have enough capital for its operations in the near future. The company said it is currently exploring layoffs, and reviewing its real estate portfolio in a bid to save money.

The company forayed into the plastic containers market in the US in the late-1940s. It made use of a unique marketing strategy incepted by Brownie Mae to gain prominence in the market. It popularised multi level marketing method. At 'Tupperware parties' people host a social event during which they sell the product(s) to earn a commission.

These ‘Tupperware Parties’ were extremely successful for the brand. After establishing a strong base in the US, the brand expanded its operations to Canada in 1958 and then explored the South American market. The brand’s marketing strategy remained mostly unchanged throughout its existence.

It entered with the same marketing strategy when it entered the Indian market. Initially, every month, Tupperware hosted demo parties for housewives, who could then earn money by selling the company’s products.

The brand's use of the direct selling parties in India also found them success. There were about 50,000 direct sellers, primarily housewives, for Tupperware in Inida as of 2020.

The brand successfully used this model to expand its business to 82 countries. However, the returns started diminishing for the brand, as times changed. Since 2011, the brand has pulled out of the UK, Ireland, Israel, Netherlands, among a few other markets.

The multi-pronged spear that took down the Giant

In order to understand what led Tupperware down the dire straits, afaqs! got in touch with brand analysts.

The general opinion has been that Tupperware has been unable to keep up with business innovations in the recent past that has led to a decrease in sales for them.

Speaking from a tech perspective, Jaspreet Bindra, founder of a digital transformation advisory The Tech Whisperer and former digital transformation advisor for Mahindra Rise, believes that the company didn't properly leveraged tech advancements in ensuring relevance in the market.

Did failure to launch on e-commerce dent Tupperware?

He believes that a brand like Tupperware could have grown significantly during the COVID pandemic. This is because most restaurants had shut down, and food packaging and domestic storage of food picked up during that time.

According to the AP report, Tupperware's sales fell from $500 million in the fourth quarter of 2020 to $313 million in the same quarter of 2022. It ended last year with $705.4 million in total debt.

“There’s been a surprising lack of interest in expanding its e-commerce business. It wasn’t focusing on e-commerce as much as it could have. Today, if you go to Tupperware's website, you won’t be able to buy any products. You will be redirected to a physical location, where you can purchase the products,” Bindra points out.

Tupperware did expand to e-comm business two years ago. People can make online purchases for Tupperware products on https://shoptupperware.in/. The e-comm wing of the business in India is not that heavily promoted as the brand's focus is more on physical retail.

He adds that the brand also lost touch with younger audiences, Gen-Z, as it failed to make an impact with its social media communication.

Brand communication and innovation

Calling Tupperware’s fall from prominence as a marketing disaster, Tarun Singh Chauhan, partner, TSC Consulting, believes that the brand was unable to capitalise on its legacy in the modern era. He further identifies that the problem with Tupperware is that the brand has not been able to maintain its position because of a lack of brand communication. While noting that the brand has had a rich legacy, the transition to the digital era for it was not so smooth.

“Tupperware product's story is not really clear to the customer as there is no communication from the brand. There fall from the top is because they have been repositioned by smarter and younger brands who have more innovative products. These brands are also able to tell a more compelling story to their consumers in their marketing initiatives.”

Many competitors of the brand, like Signoraware, Milton, Cello, etc., are cheaper and are easily visible on popular e-com platforms like Amazon and Flipkart. Tupperware's plastic container market has also seen other brands like Puma making an entry as well.

With the newer players entering the market, Tupperware has now become a brand that is known for offering premium plastic storage products only.

Angel investor and business strategist Lloyd Mathias shares that while Tupperware is experiencing a tough time, the category in itself is facing a lot of pressure.

This is because of an increasing rise of environmental concerns with plastic. Tupperware’s consumers, people who are more likely to pay more to ensure quality, are greatly impacted by such environmental news. Hence, many are switching to products that don’t use plastic. Lloyd expresses that many prefer using packaging products made of glass or metals than plastic.

He believes that while communication and marketing are an aspect where Tupperware could have lacked, there was also a lack of innovation. “The brand lost its initial mojo, i.e., product innovation. In order to stay relevant, it could have adopted other ways of communication to make sure that people are aware of the type of plastic it uses in its products.”