Is Tupperware set to go under in Australia? Brand stock drops 90% after pulling out of New Zealand

Tupperware has warned it could face extinction in Australia unless it can quickly find new funding as a leading retail expert on how things have all gone wrong for the brand.

Operating in Australia since 1961, the 77-year-old food storage company withdrew from New Zealand last year, having struggled in recent years with declining demand for home goods due to the growth of home delivery apps and lack of commitment to their iconic Tupperware. parties.

While sales of the brand rose briefly during the COVID-19 pandemic, as families prepared more home-cooked meals during the lockdown, the trend reversed sharply last year as dining in restaurants boomed again.

On Friday, Tupperware announced that it has “substantial doubts about its ability to continue operations” in the face of a cash crisis and creditor pressure after errors in its financial statements prevented the company from making a timely statement. submit an annual report.

Speaking to Daily Mail Australia, Professor Gary Mortimer, a business and retail expert at the Queensland University of Technology, said the company has failed to innovate or attract younger customers.

Tupperware sales have fallen since peaking in 2013. A rise in sales during pandemic lockdowns sharply reversed last year and the company faces insolvency

He explained that fewer people are at home than in the 1960s, and with women working outside the home, there is less appeal for Tupperware parties, the traditional sales method where consultants would come to a host’s home to present the assortment to friends and family. neighbors to sell. .

Over the years, the direct selling model has generally suffered from the rise of e-commerce and demographic changes leading to smaller households and the convenience of individual meals, leading people to cook less in bulk.

‘Tupperware as a brand is more than 75 years old. It grew in the 1950s, 1960s and 1970s through product innovation and the creation of innovative kitchenware solutions,” explains Professor Mortimer.

“But today there are significant ranges of competing products on the market, and there’s only so much innovation you can use in food storage.

He said because of the durability of the product, which meant many Aussies held on to their Tupperware for years,

“Part of the problem is the durability and longevity of the product itself,” he added.

“It is positioned as a high quality product, not something you would buy every year or so. I’m sure there are many kitchens in Australia with a few bits of Tupperware in them.’

Tupperware CEO Miguel Fernandez said the company has “started a journey to change our business”

He added that people tend to cook less for large groups and instead opt for convenient delivery options, meaning less demand for storage containers.

‘Data from the Australian Bureau of Statistics shows that we also have smaller families, and we are likely to live in smaller households, which means less batch cooking,’ said Professor Mortimer.

‘People no longer make large meals and store them, but opt ​​for more convenience around single portion control meals and consume them by throwing away the packaging’.

Professor Mortimer added that the consumers the brand first attracted in the 1960s and 1970s are now in their 80s and 90s and the brand doesn’t resonate with others in the same way.

He added that the brand does not advertise on TV or social media, and customers will not see it in stores, meaning it does not reach a younger audience, while similar products are popular on the shelves of supermarkets such as Coles and Woolworths, which people tend to opt for instead.

Traditionally, Tupperware products were sold exclusively at “Tupperware parties” that became popular in the 1950s. The first Australian party was in 1961

Tupperware is also struggling to avoid being delisted after the New York Stock Exchange issued a warning for failing to file an annual report. A Tupperware party is depicted in the 1950s

“When it started, it continued a party plan business model, and it worked really well through network selling.

“But now that moms and dads are at work, the party plan business model has diminished. Mothers are no longer at home, they are at work.’

Professor Mortimer added that there was still “a lot of nostalgia” associated with the brand, and that they thrived during the pandemic by launching a vintage range that people in their late 40s and early 50s could resonate with.

Tupperware’s dire situation came to light in a filing Friday, in which it said it was in the process of finding funding to stay in business but would not have enough money to fund its operations if it didn’t. .

A Tupperware salesperson is seen with the company’s products in 1989

A Tupperware party can be seen in the UK in 1963 as the food parcels boomed overseas

The company is reviewing its workforce and real estate portfolio as cost-cutting options, it said.

CEO Miguel Fernandez said in a statement: “Tupperware has embarked on a journey to turn around our business and today marks a critical step in addressing our capital and liquidity position.

“The company is making every effort to mitigate the impact of recent events and we are taking immediate action to seek additional funding and address our financial position.”

Tupperware is also struggling to avoid being delisted after the New York Stock Exchange issued a warning for failing to file an annual report by its March 31 deadline.

Shares of the company last traded Tuesday morning at $1.30, down 48 percent from a week ago and down 93 percent from a year ago.