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Tupperware Keeping Fresh In Developing World

Founded in 1946, the U.S. company now counts half its business in emerging countries


PARIS - When you hear Tupperware, you think door-to-door sales, plastic boxes and part-time jobs for 1960's housewives. Here in Paris, the brand is looked at with sarcastic nostalgia. But on Wall Street, Tupperware is a serious brand. Its share price has double in the past five years, and the company is now worth some $3 billion. And if all goes according to plan, next Tuesday it should publish record profits, with net pre-tax margins forecast at 13.5% of its sales against 5.1% in 2005.

Rick Goings, the CEO, who was in Paris to be decorated Chevalier de la Legion d'Honneur, one of France's highest tributes, explained that the recent success is largely due to the company's development in emerging countries. "Every second and a half, a Tupperware meeting is being held somewhere in the world," Goings says.

Today, less than 15% of the Orlando-based company's activity takes place in the US. In Indonesia, where the company has been present for 19 years, activity doubled in 2009. The company posted 50% growth in 2010. There is a similar picture in India. Only African (save South Africa) and Middle-Eastern countries have yet to experience the famous Tupperware meetings.

On average, these meetings only bring in $100 in emerging countries, against $450 in advanced markets. But emerging economies are growing so rapidly that they already represent half of the company's sales: about $2.3 billion in 2010. Just before coming to Paris, Goings was in Baghdad. In the company's tradition, he spoke in front of female students about the role and education of women in a reconstructing society. Tupperware in Iraq? "Why not, in a few years," says the CEO.

The plastics retailer has managed to withstand the ups and downs of oil prices in recent years. "Commodities are just a fraction of the price. About $10 million a year," says Goings, adding that the gross margin can reach about 70% on technological products.

High-tech accessories

Tupperware has not only expanded geographically, but has also explored new sectors of the market, mostly notably cosmetics, with eights profitable brands in South America. But the Tupperware boxes and cooking utensils still make up most of the sales (about 70%).

Fifteen years ago, the company chose to scale back its output of its basic containers, and move into more profitable high-tech accessories, which can be used in freezers and microwaves. The company also adapted its products to specific markets, with special boxes for Korean kimchi or cheese bells made of Gore-Tex to please the French. France, the biggest and most profitable European market, is also where the company produces its high-tech products destined for consumers across Europe and South Africa.

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