Tupperware CEO blasts cheap US consumers

Rick Goings blames a 'Wal-Mart market' for his company's problems but ignores its dated domestic image.

By Jason Notte Feb 1, 2013 1:48PM
Image: Woman holding empty purse ( image100/Corbis)When a guy whose entire job involves getting you to buy plastic kitchen storage containers calls you cheap, it just might be true.


As Tom Gara at the Wall Street Journal gleaned from Tupperware (TUP) chief executive Rick Goings' Tuesday earnings call, he's not exactly happy with the buying habits of the average cheese-product-eating, soda-swilling, dollar-store-dwelling American.


In fact, in a quarterly report made available on Seeking Alpha and dominated by the 60% of Tupperware's business from emerging markets in South America and Asia and its growth in European countries like Germany, Goings bluntly explained to Bank of America Merrill Lynch analyst Olivia Tong why his mix of products isn't succeeding in the U.S.:


We are a high-quality product and a brand. Why do we do better in Europe than we do in the U.S.? Hey, take a look at the average brand of cab that you get in the New York cities. I mean, they're filthy, they're junk. Get in a cab over here, it's a Mercedes or an Audi. The U.S.A. is basically a Wal-Mart (WMT) market. Our top-tier products like the Microsteamer or the Ultraplus that are 100-year-old products, hard to sell them in the U.S., because that's a discount market over there.


That most Americans have no idea what the Microsteamer reheatable steamer/colander and Ultra Plus casserole dish lines are bolsters his point a bit. Still, The Huffington Post argues that most Americans aren't springing for $30 steamers they can hand down to the grandkids, because the money just isn't there.


The Social Security Administration puts the median annual wage at $26,965, while the Corporation for Enterprise Development notes that most Americans are one emergency away from financial ruin. Combined with stagnant unemployment numbers and a recent downturn in the gross domestic product, the loss of the payroll tax break has taken a toll on U.S. consumer confidence.


But that's letting U.S. consumers off a bit too easy. As Goings says, "Europe buys quality, Japan buys quality." As the Guardian acknowledges, Japan just fell into a recession, while Europe's austerity measures and bailouts couldn't prevent a double-dip recession there. The U.S. isn't the only nation going through hard times, yet it's the one coping with disposable plastic from the supermarket instead of slightly costlier product that will last far longer.


What that has to do with the brand or reliability of cabs in either market is still anyone's guess, but the greater point about Americans' fear of the up-front cost shouldn't be lost on a country that made Wal-Mart the largest retailer in the nation and No. 2 on the Fortune 500 one cheap plastic resin chair at a time. Just because it's true, however, doesn't make it a great thing to say to potential customers.


Nor does that truth make it Tupperware's only problem in the U.S. market. Sure, its products aren't cheap, but they're also attached to a dated image of mid-century American domesticity that no longer exist. Those Betty Draper-style semi-mute subservient housewives in pearls have faded into suburban history and aren't throwing Tupperware parties anymore. Even Goings admits that one of his "dumb" decisions in the U.S. was "recruiting younger women by giving her products that a 50-plus-year-old woman would like." Maybe American consumers can do better than a $1.99 pack of disposable plastic containers, but why should they buy Tupperware if the product they're being sold doesn't differ much from the sets their parents and grandparents are handing down for free?


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697Comments
Feb 1, 2013 4:40PM
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Well, when he climbs down from his ivory tower, he might understand that the average person doesn't want to spend $30 on a plastic bowl.  I purchased Tupperware when I was younger, when I thought I would have the pieces for life. NOPE. I have a couple pieces that have survived, but with all the chemicals that plastic leaches, I prefer my glassware. Get your head out of your posterior, sir.

Feb 1, 2013 4:40PM
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Wow,for someone who needs to improve sales,slamming potential customers as cheap would be the last method for positive results. But corporations are people too.

Trying to compare countries buying habits will also show how badly ones head is buried.

And,according to Mr Shiilings post of the officers,they do not like to include possibly including their best bet of influence: women in charge.

Key Executives 
 PayExercised
Mr. E. V. Goings , 67
Chairman, Chief Exec. Officer and Chairman of Exec. Committee
3.88M4.22M
Mr. Simon C. Hemus , 63
Pres and Chief Operating Officer
2.04M829.00K
Mr. Michael S. Poteshman, 49
Chief Financial Officer and Exec. VP
1.07M497.00K
Mr. Christian E. Skroeder , 64
Group Pres of Asia Pacific
2.42M1.25M
Mr. Pablo M. Munoz , 55
Group Pres of Latin America
783.00K0.00


Feb 1, 2013 4:38PM
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Tell you what, Goings, now that you've opened your fat mouth to denigrate how Americans spend their money, I have bought my LAST piece of Tupperware!  What an A$$!!!
Feb 1, 2013 4:38PM
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He's taken a page from Obama's playbook and points his finger elsewhere for the excuse of his woes.

Feb 1, 2013 4:38PM
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I'll bet he won't be CEO much longer!!!
Feb 1, 2013 4:37PM
Feb 1, 2013 4:37PM
Feb 1, 2013 4:37PM
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You're right, Mr CEO of Tupperware,
We don't want to pay more for a plastic container to put
our leftovers in.  They are $1. at the Dollar Store.
Maybe you should invest in the Dollar Store chain instead of 
acting like you are somehow entitled to our money for your overpriced
products. Europe??? Maybe you should relocate there with their economy
in the toilet and high taxes for people just like you. Common people dont care what make
a cab is, they just need a ride. Obviously a sign that you are out of touch.




I'm sure you are very welcome there.
Feb 1, 2013 4:36PM
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I still buy Tupperware but at GARAGE SALES at a fraction of the inital cost.
Feb 1, 2013 4:36PM
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Tupperware was always for leftover's or lunch at the office. During the 60's-80's if you needed some you had to buy it. 

 

In today's food service industry whether its restaurant take out, or leftover's to take home, or bought at the grocery store you often get great reusable plastic containers (Tupperware) thrown in with your food. Rarely does one need to buy reusable plastic food containers.

 

It's a low margin business on the food side and the only reasonable move is to become a supplier to the food prep and restaurant industry.

 

Tupperware should focus on the nonperishable storage side of it's business, clothing, memorabilia , photo albums, etc. Items that need to be kept airtight and moisture free.

Feb 1, 2013 4:36PM
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Rick Goings needs to stop burping it...and just seal it shut.
Feb 1, 2013 4:35PM
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He must have shorted the stock first?
Feb 1, 2013 4:35PM
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I LOVE Tupperware, but I recognize the fact that it isn't made like it used to be AND the new stuff doesn't last as long. So why should I pay more for it?  Rubbermaid is just as good, less expensive too.
Feb 1, 2013 4:35PM
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i am more comfortable in a Japanese cab than MB, or Audi cab.  Sorry, cheap (including me)  but long-lasting.  Some people like to think the world never changes.  This is not old days where my Dad work his whole life with one employer.   Wake up , open your eyes, rich man.  i am cheap but live updated rather than rich and outdated.
Feb 1, 2013 4:35PM
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well to answer his question. I have purchsed tupperware products and they were all pure and simple no good. The lids wont stay sealed and don't fit correcctly. I had a micro ave safe bowl that cracked in the micro wave after about 3 months of use. I don't have these issues with the much lower priced rubber maid products I get at Wal Mart. Also if one of these does develop a problem I know where Wal Mart is, if I have a problem with a tupper ware product.. well where do you take that back to.
Feb 1, 2013 4:35PM
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Rest my case on how stupid Europeans are.
Feb 1, 2013 4:34PM
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Mr. Goings, you just bit the hand that feeds you...consumers no matter what country they are from are listening to you. Didn't your mother ever tell you that you don't let every thought that  pops into your head come out of your mouth. I am one of those 'American' consumers & attended tupperware parties in the earlier years of my marriage. You are arrogant to think that Americans are cheap just because they no longer consider your overpriced plastic wares to be any better than rubbermaid or any other plastics they can find for a fraction of your prices.  You were only able to get those prices through the years by pressuring young housewives to hold parties with the promise that they would receive free items by doing so. Once they gave a party then they had to attend the parties of any friends or relatives that scheduled parties (in order to help out their hostess) & therefore felt obligated to also order from those parties.  Very few young housewives back then really had the money to spend on overpriced plastic...they did it through pressure tactics & obligations.  Granted some of the products you produced, just like other companies also, were unique & well made. The difference is that yours were the most expensive. Did your products hold up better than the others? Bottom line is...ITS PLASTIC.  Any plastic, including yours, will warp, stain, crack, fade & hold odors over time. Yes, some of your earlier tupperware is handed down from 'Grandma' but does it look like anything most people would want to use? Probably not. Honestly, I have tupperware in my cabinets right now that I have had for years but rarely use. The only products that you made that I still use are an egg white separator & a smidget container that I probably got as freebies at one of your parties. After your insulting comments aimed at all American housewives you probably better look at markets elsewhere in the world because you've pretty much screwed yourself here. And for the record, we housewives are not 'cheap' , just smart enough to know that we're not going to give our money to a company that made a fatal mistake in hiring a moron as a CEO. 
Feb 1, 2013 4:33PM
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I prefer glassware...enough said

 

Feb 1, 2013 4:33PM
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Sorry Tuperware, my "cheap" plastic works just fine and lasts for years.  We own a Lexus and are willing to spend money for quality, but not waste it, American consumers look for value which is why Ebay and Craigslist are successful and Tupperware is not.  Great business model, when your business isn't working, blame the customer. 
Feb 1, 2013 4:33PM
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Oh yes, insult the consumer... that'll get'em to buy your product!
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