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 2:35PM
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The reason In Europe cab drivers drive mercedes and audi is because those cars are diesel and they are cheaper that a ford or a toyota. I know that from spending allot of time there.

Other countries have the tendency to buy only what they really need so they do buy quality product most of the time. In US we buy because we can and if we don't like it we just throw away and buy something different

Feb 1, 2013 2:34PM
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I have one tupperware container. I throw my lose change in it because it did not keep food fresh.

Feb 1, 2013 2:32PM
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Cheap ??? My wife and I cook using American made stainless steel cookware we bought a long time ago, we use American made dinnerware and went out of our way (and paid) for our Revolutions tableware which is also American made in the old Oneida factory. We also use Pyrex products.

 

Where is Tupperware produced ?? This A-hole is just concerned with his possibly diminishing income. You want the Chinese to make your products.....sell to the Chinese too !!

Feb 1, 2013 2:32PM
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1. Is Mr. Goings related to Mitt Romney? Sure sounds like it.

2. Have they considered making a value line? Most companies have.

3. Who would buy anything from someone who calls you a piece of trash?

4. Does Tupperware value it's employees like they do the top brass, or is all about the upper crust?

 

Food for thought!

Feb 1, 2013 2:30PM
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I think the CEO should look into their distribution network, or lack thereof, in the US.  Quite simply put, where the heck do you even buy Tupperware anymore?  I haven't seen the brand in any major retailer.

They've got lots of competition, no distribution, and probably nothing to distinguish their plastic stuff from their competitors.  This is not the fault of the American consumer, it is the fault of corporate management.
Feb 1, 2013 2:29PM
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Tupperware is right. Americans buy crap products at wal mart and home depot in every category. Appliances, tools, plumbing and lighting fixtures , you name it.  The box stores go to big name brands and tell them to cheapen them up as much as possible so  they can give the lowest prices. Then we buy it and complain when they break and fall apart, as well as crappy service at the chain stores.   Guess what , you get what you pay for. you buy sh**. you get sh**. Spend a little more you get quality and better service.  Its not rocket science.
Feb 1, 2013 2:24PM
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The only reason Americans shop at Wal-mart, is because the American dipsh!t CEO will barely pay them enough to survive. Also, I would like to point out to Mr. CEO, you're products are friggin plastic, not gold plated. Just maybe you're overcharging a bit for your plastic.
Feb 1, 2013 2:20PM
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Isn't it her high paying job to convince American's to buy it? Because you've yet to figure a way to product and market to the American consumer you instead whine about it? Figure it out, do a little soul searching, a little harsh self inventory on what it is you're lacking as a CEO that leaves your  "high quality product" out of American cupboards.


Feb 1, 2013 2:19PM
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I sold Tupperware in the late 1980's and early 1990's.  I had cabinets full of all their products.  They are plstic and do not last.  Everything has either cracked, broken, blistered, or broke.  I cannot find one distributer willing to honor the "lifetime" warranty of any item.  That makes the products just as disposable as they cheaper brands.  Why pay more?
Feb 1, 2013 2:18PM
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maybe we average americans don't like Tupperware, or its A-hole CEO.
Feb 1, 2013 2:13PM
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I believe in buying the best that I can afford.  I buy Caphalon cookware.  I buy the Ziploc plastic storage containers.  I think the latter is fine for keeping my sandwich fresh until lunch.
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Someone who makes 3.88M per year calls mostly Middle class Americans cheap...

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
Amounts are as of Dec 30, 2011 and compensation values are for the last fiscal year ending on that date. Pay is salary, bonuses, etc.Exercised is the value of options exercised during the fiscal year.
Currency in USD.


Feb 1, 2013 1:54PM
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I'm far from cheap, I don't store or cook any of my food in plastic and my cabinet is full of Pyrex not Tupperware.
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