Why is Tupperware bankrupt? Food storage brand’s Chapter 11 filing reveals how it failed to change with the times
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Tupperware Brands Corporation (NYSE: TUP), owner of the iconic food storage brand Tupperware, has filed for Chapter 11 bankruptcy protection. The filing comes after years of financial struggles despite a pandemic boost when many were under lockdown orders, leading to an increase in people cooking at home. Here’s what you need to know about Tupperware’s bankruptcy.
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The reason for Tupperware’s bankruptcy
Many reasons typically lead a company to the point of bankruptcy. In a press release announcing the filing, Tupperware blamed a “challenging macroeconomic environment” for “severely” impacting its financial position.
When companies blame the “macroeconomic environment,” they are pointing to broader factors that most companies suffer through, such as rising costs due to inflation, undesirable interest rates, and hesitancy from consumers to spend on discretionary items as a result.
But if you look at the bankruptcy petition that Tupperware filed with the the U.S. Bankruptcy Court for the District of Delaware, the company gets more specific about the factors behind its financial woes.
Notably, Tupperware says the main sales channel that it has relied on for decades—getting independent consultants, which the company calls its “Sales Force,” to sell Tupperware’s goods directly to their friends, colleagues, and communities—doesn’t work as well in the 21st century as it did in the 20th.
“The historical strengths of a widespread direct selling model began to turn into weaknesses,” the company wrote in its bankruptcy petition. “The Company’s focus on its direct sales model ultimately came at the cost of developing an omnichannel strategy, or even modern e-commerce infrastructure to support its Sales Force.”
A lack of a strong online presence
Tupperware said that nearly 90% of its sales came via its direct sales channels in 2023. That’s an astonishingly high figure, especially considering that e-commerce has been a thing since the 1990s.
Yet Tupperware did not readily start embracing e-commerce until the 2020s. It wasn’t until June 2022 that Tupperware opened up a storefront on Amazon.com. In October of the same year, the company began selling its wares on Target.com.
To say Tupperware was late to the game in selling via two of the biggest online retailers in the United States is an understatement.