Tupperware Brands Corp. and several of its subsidiaries filed for Chapter 11 bankruptcy protection on Tuesday, September 17, 2024. The once-iconic maker of food storage containers has faced dwindling demand and increasing financial losses, culminating in this significant legal move.
The company’s troubles began after a brief boost in sales during the pandemic when more people were cooking at home, driving demand for its colorful, airtight plastic containers. However, after the pandemic, Tupperware struggled as costs of key raw materials, including plastic resin, labor, and freight, skyrocketed. This sharp increase in expenses severely impacted the company’s profitability.
Laurie Goldman, Tupperware’s Chief Executive Officer, acknowledged the company’s ongoing difficulties in a press release, stating, “Over the last several years, the company’s financial position has been severely impacted by the challenging macroeconomic environment.” These challenges have included inflationary pressures and shifts in consumer behavior, especially among lower and middle-income buyers who were deterred by rising prices.
In the filing with the U.S. Bankruptcy Court for the District of Delaware, Tupperware reported that it has between 50,001 and 100,000 creditors, reflecting the widespread nature of its financial obligations. This move has been expected, as Tupperware had previously breached the terms of its debt agreements and had begun working with legal and financial advisers to explore options, as Bloomberg reported earlier.
Tupperware’s financial woes extend back several years, with the company struggling to regain profitability for more than four years. The company has reported falling sales for six consecutive quarters, starting from the third quarter of 2021. Persistently high inflation has hurt its core customer base, which consists largely of low- and middle-income households, contributing to its prolonged sales decline.
In 2023, Tupperware sought to restructure its debt by finalizing an agreement with lenders and signing Moelis & Co., an investment bank, to help explore strategic alternatives. Despite these efforts, the company ultimately could not recover in the face of increasing competition from cheaper alternatives in the market, further eroding its once-dominant position in the food storage industry.
Tupperware’s bankruptcy signals a tough road ahead for the iconic brand, as it navigates the complex legal and financial processes to restructure and rebuild.