Story behind Tupperware's $1.9 Billion Loss!

Did you know that The Guinness Book of World Records named Tupperware as one of the greatest inventions of the 20th Century?

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Tupperware was founded by Earl Tupper in 1946. Tupper, a packaging engineer, aimed to create airtight containers that would keep food fresh.
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His Vision was to develop a line of durable, flexible plastic containers that provided superior food storage solutions, making it easier for households to preserve food and reduce waste.
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Its first Product launch was the “Wonderbowl”, which featured a ground-breaking airtight seal. The innovative design quickly garnered attention for its functionality and convenience.

Cultural Impact:

Did you know that the airtight lids wouldn’t seal unless they were “burped” beforehand, and that confused consumers, who returned them to stores claiming the lids didn’t fit?

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Owing to its new design and initial awareness challenges, Earl Tupper needed a new sales strategy. Around the same time, a cleaning products company called Stanley Home had debuted the “home party,” a new method of selling products directly to housewives.
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Stanley Home parties were a chance for women to buy products from salespeople in their home, not their doorstep, and to do so along with their friends.
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Tupper hired the brainchild behind Stanley’s home party strategy, a divorced and Single mother called Brownie Wise, she gave a new twist to the “home party” structure and made her own “Patio Parties” to promote Tupperware product, once she saw its potential for housewives. Earl wasted no time and quickly hired Wise as his General Manager Sales and then their was no looking back for them, Tupperware quickly made its space in households and became synonymous to Tupper ware Parties.

Critical Milestones:

• Tupperware’s revenue crossed $25 million in 1954, with sales rapidly expanding due to the success of the direct-selling model.
• By 1970s, Tupperware had expanded to Europe, Latin America and Asia, with global sales surging to $200 Million.
• Tupperware breached the historic figure of $1 Billion in Sales in 1990s, and went public in 1996.
• By 2000s, Tupperware expanded its presence internationally, with sales in over 100 countries, establishing itself as a global brand.

Impact on American Households:

• Women Entrepreneurship: Tupperware’s model provided women with opportunities for entrepreneurship and income generation during a time when traditional job options were limited.
• Symbol of Working Class: Tupperware became a household name and was referenced in popular culture, symbolising the post-war American lifestyle and Middle Class.

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Tupperware achieved its highest Annual revenue of $1.9 Billion in 2005, but the sales plateaued and the company struggled to maintain this momentum due to increasing competition and changing consumer preferences. There were 2 Major reasons for that:

1. Changes in Customer Preferences: As people’s awareness of their health increased, they started to favour glass and stainless steel containers over plastic ones because they thought they were safer and more environmentally friendly.
2. E-commerce as a rival: Tupperware found it difficult to hold onto its market share through traditional direct sales as e-commerce platforms gave consumers access to a greater selection of food storage solutions.

5 Lessons for Startups in Tupperware’s loss of $1.9 Billion Revenue:

1. Agility to Customer Preferences: New companies should keep an eye on market changes and be ready to tweak their products and services to match.
   ​Who adapted better?: Blue Apron grew from just meal kits to offer a range of food items adjusting to what people want in healthy eating.
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2. Embrace Digitalisation: Invest in digital marketing and online sales to expand your customer base. Tupperware’s emphasis on outdated sales techniques prevented it from expanding.
   ​Who adapted better?: Warby Parker, the eyewear brand, successfully transitioned to selling directly to consumers online, facilitating and streamlining the shopping experience for clients.
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3. Leverage Community Engagement: Leverage your Community to Create focussed groups around your product to build consumer feedback loop. Tupperware’s initial success came from its community-based sales approach, this had to be adapted to modern demands.
   ​Who adapted better?: Peloton, the fitness chain, builds a community through its workout sessions and social interaction boosting customer loyalty.
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4. Product Innovation is Irreplaceable: To keep up with with shifting consumer demands, put utmost priority on Product Innovation.
   ​Who adapted better?: Dyson literally pours money into R&D, to create cutting-edge and Top of the line products that keep pulling in customers.
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5. Recalibrate Distribution Mix: Explore multiple sales channels to reduce reliance on a single model. Tupperware’s challenges highlight the risk of over-reliance on a single distribution channel and it caused the dearly.
   ​Who adapted better?: Dollar Shave Club **successfully integrates online subscriptions with retail partnerships, providing customers with flexibility and convenience.