One of the most iconic house brands in business for 70 years, Tupperware, may not be able to “contain” its losses. With more operations 100 countries and more 10,000 employeesTupperware has a large international presence and its products are used by thousands of people every day.
Tupperware saw its stock drop by more than 45% after the company announced it was scrapping its full-year guidance and explained it needed more time to fix its operations. Meanwhile, other companies in the S&P 500 index have only lost about 9%. The company also saw a steady decline sales over the past five years. The company is looking to raise more capital or credit modifications to remedy the situation in order to continue its operations. The company hired financial advisors to help Tupperware determine the next steps for the future of the business.
Tupperware has built its business for years on “the face to face party plan template.” Wherever there was a holiday party, family reunion, or important meal, Tupperware products were likely to be found, full of leftover food to send home with family and friends. During the COVID-19 pandemic, the company was unable to capitalize on its face-to-face party plan model, which contributed to the company’s overall decline and the need to borrow more credit. than usual. Some of Tupperware’s biggest competitors, like Newell Brands And Lifetime brandshave maintained/increased their income over the past few years, despite the difficulties of the COIVD-19 pandemic.
The warning signs of Tupperware’s decline began to appear in August 2022 when from new zealand only Tupperware importer went bankrupt. The COVID-19 pandemic has hurt the in-person party model and created huge challenges for international supply chains. Combined with inflationary pressures and fluctuating exchange rates, this particular importer could not escape industry forces and had to close the business for real. Moreover, since the start of the COVID-19 pandemic in 2020, the price of plastic materials and resin has increased by more than 36%likely resulting in extreme price increases for Tupperware’s raw material inputs.
If Tupperware Brands can’t stay in business, the effects of its closure could be felt around the world. A large proportion of the company’s employees work at the headquarters in the United States. While unemployment rate have returned to pre-COVID-19 rates, the US labor market is quite volatile. A massive layoff could put thousands of employees in a tough job market where they might not be able to find work for months. Employees in Portugal, Taiwanand other offices around the world could be moved in the same way.
Additionally, Tupperware’s competitors may see increased demand for their food storage solution products. Tupperware has been at the forefront of durable, reusable food storage solutions for years, and other companies in the market should prepare to meet this demand if Tupperware Brands exits the market.
Regardless of how the future of Tupperware Brands unfolds, this serves as a warning signal to other companies; they need to ensure their finances are in order and have strategies in place to mitigate the effects of the COVID-19 pandemic on their finances and supply chains.