Tupperware parties are here to stay as part omni-channel approach: CEO
Tupperware (TUP) containers may be available in Target now, but the 76-year old brand also plans to keep its original strategy — independent sales reps and home sales parties (though now you don't need an invite — you can find a local seller on the company website).
As part of an omni-channel approach to take the brand into the next generation and gain brand relevance, the parties will stay, CEO Miguel Fernandez told Yahoo Finance.
"Our direct selling channel and our Tupperware parties are going to continue to be there ... Are they going to change?... I think they will because, obviously, we have technology."
Fernandez says many customers now use video demonstrations to see products and attend e-parties in addition to in-person events, particularly in South America.
"What we're seeing in many of our developed countries are more and more parties, what we call e-parties, which is people that host consumers, and they have these communities around the screen, so a combination of both [in-person and online]," he explained.
In the company's most recent quarterly earnings report, total net sales came in at $340.4 million, a decrease of 18%, yet boosted by the strength of South America, particularly from recruitment and retention efforts. Excluding the impact of foreign currency translation, sales in South America increased 13% from the year prior.
"In some parts of the world like Latin America and some parts of Asia, direct selling is a very relevant channel," Fernandez told Yahoo Finance. "We're going to be investing 99% of our resources into making our core business, which is direct selling, even better and better in those countries."
In-person parties aren't nearly as popular in the U.S. market, however.
"Some other countries like Western Europe or the U.S., we understand the consumers moved, or some other consumers move from direct selling into e-commerce or retail and that's where we want to be, " Fernandez said.
Target will hold "only 20, 25 SKUs (stock keeping units)," while Tupperware over all carries over 200 SKUs every single month on its site.
"Once we start competing like any other consumer brand in the shelves or in the screen of the major retailers, then we're going to be considered like any other CPG company and our performance is going to be judged by our performance of the numbers," he noted.
Though the stock is under pressure, down nearly 40% compared to two years ago and down more than 71% year-over-year, Fernandez seemed optimistic about the retail approach to help boost returns and compete against the likes of Rubbermaid, The Container Store, KitchenAid and other companies that sell food storage containers.
Fernandez joined the company in April of 2020 from Avon, where he led a transformation strategy, and hopes to do the same at Tupperware.
"The most important thing about the brand is that, let's face it, it was a little bit dated and it was dated because we were reaching just a certain amount of consumers. What we're trying to do right now is to gain brand relevance and to be where the new consumers are, where the new people are, and wherever they are."
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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