In today’s Finshots, we explore the rise and fall of the plastic container giant Tupperware.
School tiffins. Office lunch packs. Picnic baskets.
All of this has one thing in common — plastic Tupperware boxes. Okay, maybe not so much in India because people love their stainless steel dabbas. But, globally, Tupperware has been a mainstay of every household when it came to packing and storing all kinds of foods.
But things aren’t looking good for the 77-year-old company. The stock price has crashed by a staggering 90% in the past year. And it needs cash to survive. Urgently.
Now before we get into what went wrong with Tupperware, let’s rewind a bit. To the 1930s.
A chemist called Earl Tupper (yup, Tupper!) who worked at a plastic manufacturing company had discovered he was allowed to take scrap materials from work. He could tinker with them in the comfort of his home.
Now Tupper was an inventor at heart and wanted to create better plastic. He figured out that if he used polyethylene — which is a byproduct from refining crude oil refinement — and applied the right pressure and temperature, the outcome was quite spectacular. He’d get plastic that was strong and translucent. It would be perfect for making all sorts of containers.
But the battle wasn’t over. He still needed the right kind of lid. He wanted to do away with the tin foils that most households used back then as makeshift lids. He knew he had to create one that would be airtight and protect the contents from spilling. That’s when he found inspiration in the lids of paint cans. He felt he could do the same thing with polyethylene. And he did. He created a lid with a seal that would simply snap over the container. He patented it.
And in 1946, Tupperware was born.
But having these wonderful containers alone wasn’t enough. People needed to be sold on why it was so great.
And that’s when the legendary salesperson Brownie Wise came in. She understood that people needed to see the miracle of Tupperware to really believe it. So she began organizing these ‘Tupperware Parties’. She’d invite a bunch of women home and demonstrate its strength by filling containers with liquid and then flinging them across the living room.
It was mighty impressive. And soon, ‘Tupperware parties’ were all the rage. The sales strategy to grow the business was simple — if a friend recommends a product, it’s more persuasive than an advertisement from a company. Just that these friends sold these boxes at group parties. It wasn’t a one-on-one sales pitch.
If you think about it, Tupperware salespeople were in a way like today’s influencers. People hung on to their every word.
And it wasn’t a capital-guzzling business either. It didn’t have to set up stores across the world. It could rely on people storing products in their homes. And prospective buyers could just hop over to the house to pick up a product.
The tribe kept growing. Sales consultants roped in other friends to sell Tupperware and the network grew. It was multi-level marketing at its finest. And it wasn’t touted simply as a way to make money. The pitch was financial independence for women. As the daughter of one of these Tupperware sale folks put it, “Tupperware . . . took those moms out of the kitchen where they were ‘supposed to be’ and let them enter the work force, and let them have something outside the home.”
Its impact on American culture was massive. It even found its way into the fabled Smithsonian Museum as part of its collection on American history.
And over time, Tupperware diversified its business. It created plastic water battles. It made microwavable grills. It even began selling beauty products. And it wormed its way into 80 countries all over the world.
But times changed. And Tupperware failed on two fronts.
Firstly, the product.
At its core, people associated Tupperware as being a plastic container business. And competitors emerged selling cheaper alternatives. People simply didn’t want to splash the cash on more expensive Tupperware when others could do the same job.
On the other hand, the ones who could afford the higher prices also began to rethink the cost of plastic itself. They were worried about plastic pollution. And even feared that chemicals in plastic would leak into the food if they used it in a microwave. These folks began to shift towards glass containers and Tupperware was late to the party.
But more than the product, the bigger problem was distribution.
You see, consumers had moved on from direct sales. They were shopping online. And social conversations happened on platforms like Facebook and Instagram. Those Tupperware parties are alien concepts to millennials and Gen-Z. They might have seen it in some old movie or sitcom. Or heard their grandmother waxing eloquent about it. But that’s the only connection.
Even as its sales fell by 40% over the past decade, Tupperware tried to cling on to its past. Even today, these direct sales channels account for 80% of Tupperware’s sales.
But most people don’t prefer to shop this way anymore. It’s either at the retail store or on e-commerce platforms. So with a broken primary sales lever, it’s no wonder that Tupperware began to slowly face extinction. Even their sellers have realized it’s not as lucrative anymore and they’re dropping out of the business.
And even when Tupperware tried an e-commerce foray in 2019 and getting into one of America’s biggest retailers Target in 2022, the efforts had come a little too late.
The end result is an ominous warning from the company — that it probably won’t survive. That it hasn’t filed its annual financial reports. And that the company could get thrown out of the stock exchanges.
Will this be the end of an epic run for Tupperware? We’ll have to wait and see.
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Ditto Insights: Why Millennials should buy a term plan
According to a survey, only 17% of Indian millennials (25–35 yrs) have bought term insurance. The actual numbers are likely even lower.
And the more worrying fact is that 55% hadn’t even heard of term insurance!
So why is this happening?
One common misconception is the dependent conundrum. Most millennials we spoke to want to buy a term policy because they want to cover their spouse and kids. And this makes perfect sense. After all, in your absence you want your term policy to pay out a large sum of money to cover your family’s needs for the future. But these very same people don’t think of their parents as dependents even though they support them extensively. I remember the moment it hit me. I routinely send money back home, but I had never considered my parents as my dependents. And when a colleague spoke about his experience, I immediately put two and two together. They were dependent on my income and my absence would most certainly affect them financially. So a term plan was a no-brainer for me.
There’s another reason why millennials should probably consider looking at a term plan — Debt. Most people we spoke to have home loans, education loans and other personal loans with a considerable interest burden. In their absence, this burden would shift to their dependents. It’s not something most people think of, but it happens all the time.
Finally, you actually get a pretty good bargain on term insurance prices when you’re younger. The idea is to pay a nominal sum every year (something that won’t burn your pocket) to protect your dependents in the event of your untimely demise. And this fee is lowest when you’re young.
So if you’re a millennial and you’re reading this, maybe you should reconsider buying a term plan. And don’t forget to talk to us at Ditto while you’re at it. We only have a limited number of slots everyday, so make sure you book your appointment at the earliest:
1. Just head to our website by clicking on the link here
2. Click on “Book a FREE call”
3. Select Term Insurance
4. Choose the date & time as per your convenience and RELAX!