13. Natura Cosméticos

Cajamar, Brazil

www.natura.net

Beauty Sales: $3.1 billion

Key Personnel: Alessandro Giuseppe Carlucci, chief executive officer; Agenor Leão de Almeida Junior, senior vice president, digital technology; Gerson Valença Pinto, senior vice president, innovation.

Major Products: Premium and mass personal care products, fragrances and cosmetics under brands including Ekos Natura, Aquarela, Una, Chronos, Natura Naturé, Vitaplant.

New Products: Natura Una deo parfum, Tododia line body spray, Chronos Tinted sunscreen, Natura Amó, Natura UNA makeup.

An eye on retail? The acquisition of like-minded Aesop could mean a new cycle of growth for Natura.

Comments: Brazil-based direct seller Natura is a company that strives to be corporate, socially and environmentally responsible, and says that due to “its corporate behavior, the quality of its relationships, and the quality of its products and services, Natura is bound to become an international brand.” The majority of the company’s sales are currently in Latin America, and the company touts more than 1.5 million consultants, up more than 10% over the previous year. In Brazil, alone, there are about 1.2 million consultants. The company also maintains an operation in France.

Thanks to Brazil’s strong Personal Hygiene, Fragrances and Cosmetics market, Natura’s corporate net revenue increased 13.5%, to reach $3.1 billion in 2012. Personal hygiene showed the most growth, but Natura’s position weakened due to increased competition, particularly in hair care and deodorants. The company’s market share in the Cosmetics and Fragrances categories increased.

For Brazil, alone, Natura’s net revenue hit nearly $2.7 billion, a 10.3% increase. Combined net revenue for Argentina, Chile and Peru came in at about $238 million. For Mexico and Colombia: $110 million.

Natura says it started a new growth cycle in 2012 and the double-digit results obtained resulted from investments made during the past two years. Among the improvements: The company reduced the delivery time to consultants, doubled the number of orders delivered within 48 hours, and reached the lowest rate for products out of stock in the past 10 years.

The company has put great effort into connecting with consumers via live demonstrations, social media and Internet efforts and has reaped good results.

It even launched a television program that promotes its key principles—well-being in all its forms.

Innovation remains at the heart of Natura’s product development as well as its corporate and sustainability practices. Notable launches in 2012 included brands in both premium and lower range segments that outsold corporate expectations. Natura Una deo parfum, a joint project with IFF, was designed for the premium segment, and sold more than 600,000 units in its first launch. In the lower price range, the Tododia line body spray sold more than 3.5 million units in its initial launch.

Applicators also make a difference, such as with Mamae e Bebe (Mother & Baby), whose packaging now includes valves to make application easier at bath time.

While Natura maintained its position as the preferred brand in the Cosmetics, Fragrances and Toiletries market, with 46.5% market share, it was 50 basis points lower than in the previous year. The consumer loyalty indicator also decreased, from 66% to 51% in the period, both indicators of the increasing competition in the industry. Brand awareness increased in Argentina, Chile and Mexico last year.

Natura continued to focus on its supply chain, monitoring a number of performance factors of its partners. The bonds established with suppliers are particularly relevant for Natura’s expansion plans for Latin America in the coming years. Natura’s goal is to have, in three years, 30% of the products sold abroad in this region (except Brazil) produced locally by third party suppliers (manufacturers of finished products on behalf of Natura).

In the second half of the year, Natura was able to report a decrease in product delivery time from six days to 4-1/2.

For the second consecutive year, Natura ranked as the second most sustainable company in the world by the Canadian organization Corporate Knights, and by Bloomberg.

In January, Natura announced that it had entered into a definitive agreement with Aesop, the Australia-based personal care company. Natura acquired a 65% stake in Aesop for approximately $68 million in cash, which included the anticipated acquisition of Aesop’s distributors. Natura’s investment will help Aesop to grow internationally. While they continue to operate independently, both organizations share competencies and regional expertise that could lead to Aesop potentially entering the Brazilian market and Natura exploring the concept of signature stores in select markets.