Products And Underdeveloped Business Models Make Tupperware Party End

The Tupperware brand, which was once the caretaker of the women's prestige, said it was bankrupt after 78 years of existence. (X)

JAKARTA The push for plastic food containers from the United States, Tupperware, has officially gone bankrupt. The company filed for bankruptcy protection Chapter 11 because it could no longer survive when sales continued to decline. Previously, Tupperware managed to become a favorite brand for mothers in various countries, including Indonesia.

Tupperware announced it had filed bankruptcy at Bankruptcy Court A for Delaware District on Tuesday (17/9/2024) before midnight local time, having previously doubts the ability to keep running business in August of the same year.

During the COVID-19 pandemic, Tupperware sales actually had increased, but the situation changed after the pandemic ended.

"The company has a debt of US$812 million (around Rp. 12.4 trillion)," read the court file quoted by Reuters.

"The new lenders have been trying to use their debt positions to confiscate Tupperware assets including its intellectual property such as its brand, prompting companies to seek bankruptcy protection," the company said.

Citing the company's official website, the Tupperware product was first introduced in the 1940s in Massachusetts by Earl S. Tupper, a chemical manufacturer. Tupper was inspired when he made a print at a plastic factory, shortly after the Great Depression (1929-1939). He wants to help families who are tired of the war save money to store food.

Tupper launched its first product, the Wonderlier Bowl and Bell Tumbler food storage containers in 1946. To run its business, Tupperware applies the Tupperware Home Party or Tupperware Party method, which Brownie Wise business first used.

He promotes Tupperware products by throwing parties in people's homes. At the party, the equipment used and exhibited came from Tupperware. Thanks to his trading style, Wise was appointed Vice President of Marketing for the company Tupperware

Tupperware finds solutions to food waste, empowers women's entrepreneurship through social sales, making home parties popular, the company's official website reads.

The selling agent who is usually a woman will invite other women to come to her house to see and buy various Tupperware products. Not only is it an effective direct marketing model, the Tupperware Party is also a popular social event. From this way, Tupperware products have succeeded in dominating households in the US and even the world.

Tupperware thrived in the 1960s when its products were sold in Europe, Central America, and South America. Until now, Tupperware claims to have succeeded in selling products in 70 countries.

In Indonesia itself, Tupperware sales began in 1991. In 2013, Indonesia became Tupperware's largest market, with sales figures reaching more than 200 million US dollars and 250 thousand distributors.

Tupperware became the idol brand of mothers at that time. Because of its popularity, the name Tupperware is often mentioned to refer to plastic containers with different brands, as most people call mineral water Aqua. With a fairly high price compared to other brands, it has Tupperware as a matter of pride, so many people are crazy.

But over time, there are more and more choices of other brand products with more diverse designs and more affordable prices.

"Some time ago, the Tupperware party has ended," said Susannah Streeter, analyst of financial services firm Hargreaves Lansdown.

He explained several reasons that made Tupperware collapse, for example, errors in financial reporting that had occurred for 2021 and 2022. In addition, Streeter also said there was a change in consumer behavior that made plastic containers not popular.

"Changes in shoppers' behavior make the container outdated, because consumers have started to get rid of addiction to plastic and find ways to be more environmentally friendly in storing food," Streeter said.

This is in line with the results of research by Tetra Pak, a Swiss food and beverage processing and packaging company, which shows that the majority of consumers now tend to buy products from companies that show concern for the environment. Therefore, plastic products are increasingly being abandoned, including Tupperware, which was once an idol for mothers in Indonesia.

Tupperware sales techniques are also considered as one of the reasons why this brand is difficult to compete in the digital era. As previously mentioned, 90 percent of Tupperware products are sold direct selling and marketing tiered or known as multi-level marketing (MLM)

According to Alpha's Seeking analysis, the MLM approach is a very limited business model for the long term. Despite resulting in strong and repeated sales, there are still large disadvantages including overpriced prices compared to competing products, as well as less exposure.

Especially in today's era, when online sales allow consumers to access more quality products, even at lower prices. The MLM industry faces big challenges to grow.

"Even with 100 launches of new products and increased marketing to gain sales partners in the emerging country market, the MLM business model is one that doesn't seem capable of competing in the modern world with giant rivals such as Wal-Mart, Costco, and Amazon," analysis Seeking Alpha said.

Citing Fastcompany, Tupperware didn't really jump into online sales until the 2020s. They just opened an official store on Amazon in June 2022 and in October the same year the company started selling their products on Target.com. You could say Tupperware was late through the two largest e-commerce in the US.

Retail analyst and managing director of GlobalData Retail Neil Saunders said Tupperware had experienced a sharp decline after the pandemic and was judged to be still not connected to young consumers.

"This company used to be the most innovative like a sophisticated gadget in the kitchen, but now it's completely lost its lead," said Saunders.