Tupperware’s -57% Stock Plunge Has The Plastic King Out of Lids and Out of Luck (Bankrupt)

Well folks, it looks like Tupperware, the home of food containers with lids that magically disappear is in turn, seeing its profits magically disappear. Now unless you’ve been hoarding your leftovers in sad, mismatched containers from the Dollar Store, I’m sure I don’t need to remind you about the company that pretty much invented the concept of plastic food storage.

(Source: X) 

However, despite being the iconic brand that was once synonymous with suburban housewives and home parties since 1946, the company is officially on life support - set to file for bankruptcy this week. The reason? Well it turns out, due to the consumers’ conscience pivots away from plastics, and a mountain of debt… Tupperware is facing a future about as uncertain as the mystery Tupperware lid in my kitchen drawer.

(Source: Bloomberg News) 

Now with that said, as shocking as all this may be, this has been a long time coming. Tupperware’s been warning us for years that it’s on the brink of collapse and now, the last shoe has fallen with its stock cratering -57% yesterday after reports of the bankruptcy filing started circulating. 

(Source: QZ) 

Of course, the company has been trying to turn things around for what feels like forever, but nothing seems to stick. For instance, last year, they swapped out their CEO (spoiler: didn’t help) and in June, the company closed its last U.S. factory, sending nearly 150 employees packing. Which is pretty devastating for a company that’s been in the limelight of kitchens for over 70 years.

The bad part about the rise and fall of this American icon, is that Tupperware didn’t just sell plastic containers. It changed the game. The brand revolutionized food storage with its airtight lids, which, let’s be real, were a bigger innovation than we give them credit for. And the way they sold it? Genius.

(Source: The Quota) 

The Tupperware "party" was the original MLM (multi-level marketing), where saleswomen hosted demos in their homes to show off the goods. It was like Avon, but with the added bonus of keeping your leftovers fresher, longer.

But what’s really interesting, is that throughout what seemed like a seven decade monopoly, the company still had over 300,000 independent sales people worldwide in 2022.  That’s a lot of people pushing plastic tubs. The problem now? Nobody’s buying that way anymore. The door-to-door model that once made Tupperware a household name couldn’t keep up with the rise of Amazon, Instagram/TikTokshops, and, well, the 21st century.

(Source: Giphy) 

Plus, add the growing plastic pandemic to the mix - where consumers are becoming increasingly wary of plastic’s environmental impact. It’s evident that filling your kitchen with non-biodegradable containers isn’t as novel as it used to be. 

Additionally, Tupperware’s massive debt, which has hit more than $700 million to be exact, has ultimately played a major part in its demise as well. Now I know what you’re thinking, how can a company that focuses on plastic containers rack up almost a billion dollars in repayments. Well apparently, selling plastic containers wasn’t enough, as Tupperware borrowed heavily to fund a doomed expansion strategy.

(Source: New York Post) 

For instance, They tried their hand at water filtration devices and even beauty products (yes, really). Which as you can imagine, did not go well at all. Yet, while these moves have since been reversed, the damage had already been done. Not to mention the fact that due to the “shiny” object syndrome of funding other ventures, Tupperware gave way for competitors like Rubbermaid and OXO to swoop in and crush its market share. So yeah there’s that.

Now with that said, looking onward, and hopefully upward, what’s next for Tupperware? Well, under bankruptcy protection, Tupperware is hoping to reorganize itself—like when you finally clean out that chaotic kitchen drawer of mismatched lids and containers. The plan is to slim down, renegotiate its debt, and come back leaner and meaner. 

(Source: Giphy) 

Earlier this year, lenders gave Tupperware a bit of breathing room after they violated their loan terms. But things have only gotten worse since then. And now, with the bankruptcy filing looming, it’s time for serious changes. Whereas, Laurie Ann Goldman—who used to run Spanx—was brought in as CEO last year to try and turn things around. 

But even with her at the helm, the question remains: Can Tupperware stay relevant in a world that’s moved on from plastic?

(Source: Giphy) 

Of course, given all of this, while Tupperware is in deep trouble, the brand isn’t dead yet. They still pulled in about $1.3 billion in revenue last year, which, while not great for a company with a $700 million debt problem, shows there’s still some life left in the old brand. They’re selling through retailers like Target and Macy’s now, trying to pivot away from the in-home party model that’s almost as outdated as AOL dial-up.

But again, will it work? Even if they manage to survive bankruptcy, Tupperware will be a much smaller company. They’ll have to compete with brands that have already beaten them at their own game. And they’ll need to convince a new generation of consumers—who are more concerned about sustainability than sales parties—that they’re worth keeping around.

(Source: Giphy) 

Adrienne Yih, managing director at Barclays, put it best: “The business and brand has not been able to keep up with rapidly changing consumer behaviors or capitalize on many of the broader tailwinds in the food storage category.” Translation: Tupperware missed the boat like Intel missed the AI boat. 

In the end, it looks like Tupperware’s about to go from the top shelf to the clearance aisle, and it’s not clear if they can claw their way back. And unfortunately, the brand that once revolutionized food storage is now just another casualty of the 21st century. *sigh*... 

(Source: Giphy) 

In the meantime, let this be another cautionary tale to make sure the stocks in your portofolio are keeping up with the sign of the times… and as always, stay safe and stay frosty, friends! Until next time…

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Stocks.News holds positions in Intel and Amazon as mentioned in the article.