◼ BUSINESS Bloomberg Businessweek August 5, 201917ILLUSTRATION:
CYNTHIA
KITTLER
THEBOTTOMLINE Natura’snatural,ethicallysourcedcosmetics
havebeena hitathomein Brazil.It’saimingforsimilarsuccess
globally,asyoungerconsumersleantowardpurpose-drivenbrands.ofitsproductsarevegan.Thechallengewillbe
stayingloyaltoitssustainablerootsasit rapidly
grows.ExecutiveChairmanRobertodeOliveira
Marquessaysthe“valuepropositionsthatarethe
veryessenceofNatura”areappealingtoconsumers,
particularlymillennials,wholookfor“authenticity”
inproductsandthecompaniesthatmakethem.
Purpose-drivenbrandsresonatemorewithyoung
consumers,accordingtoresearcherEuromonitor
International.About60%ofmillennialsresponding
toa lifestylesurveysaidtheyfelttheycouldmake
a differenceintheworldthroughtheirchoicesand
actions,comparedwithabout45%ofbabyboomers.
Foundedin 1969 asa storeinSãoPaulo,Natura
soonmovedtodirectsales,adding2,000consul-
tantsoverthenextdecade.Novelties,suchasoffer-
ingproductrefillsinthe1980sanda lineofsoaps
andcreamsthatcouldbeusedbybothnewmoms
andbabiesinthe1990s,fedsteadysalesgrowthin
a countryobsessedwithgoodlooks.Butthough
Braziliansareleadersinplasticsurgeryandpopu-
larizedtheinfamousBrazilianwax,thenationalcon-
ceptofbeautyis morenatural—thinkofmodelGisele
Bündchen,withhersignatureloosehair.
“Natura’s broader portfolio, morefocused
onwellnessasopposedtoonlybeauty,putsit in
a uniquepositiontoexpandabroad,”saysDavid
Marcotte,a retailanalystwithKantarConsulting.
“Inothermarkets,youseethemovementofbeauty
goingintowellness.InBrazilit startedtheotherway
around.That’sthegroundingfortheirsuccess.”
Naturagets30%ofitsrevenueoutsideBrazil.
Thecompanybeganwideningitsscopeinthepast
decade,buyinga controllingstakeinAustralianlux-
uryskin-carebrandAesopin 2013 andBritishsoap
makertheBodyShopin2017.It’stakenstepstobring
itssustainableethostothosebrands.Naturabrought
theBodyShop’smarketingbacktothecruelty-free
causethatjump-startedthebrandinthe1970s.It’s
alsotakenthefair-trademodelit usestoprocureits
ingredientsfromtheAmazonandexpandedit tothe
Africancommunitiesthatprovidemoringaoiltothe
BodyShop.AtAesop,packagingchangeswillreduce
plasticconsumptionby 124 tonsperyear.
It’sunclearhowmuchNaturawilltransform
Avon,whosesalesplungedbyhalfoverthepast
10 years,to$5.25billion,infiscal 2018 amidcom-
petitionfromtrendierbrands.Thecompanyhad
givenupontheU.S.,sellingthelastofitsstakein
theAmericanoperationsearlierthisyear,tofocus
oninternationalmarkets.Butit’sstillstruggledto
adapttochangingconsumertastes.
TheAvonacquisitionwillgivetheBraziliancom-
panyaccessto 27 new markets—including in China
and Eastern Europe—as well as greatly expandthedirect-salesmodel,whichNaturasaysit can
modernize and diversify. Marques plans to turn the
combined companies’ army of 6 million direct sell-
ers into social media sellers and influencers—who
increasingly drive millennials’ cosmetics purchases.
Natura is also giving door-to-door associates pay-
ment machines and helping them open web stores.
“This powerful sales network that gets into consum-
ers’ homes already existed offline, and now it’s con-
verting itself into an online network,” Marques says.
That’s in line with industry trends. Elton
Morimitsu, a Euromonitor analyst, says several
brands are “abandoning the use of influencers with
millions of followers,” he says. “They’re bettinginsteadonmicroinfluencers with several thousands
of followers, because the conversion rate into sales
that the brand will have will be much higher.”
Natura doesn’t sell only through its consultants;
it’s made several brands available in drugstores,
cut deals to sell others at big retailers, and opened
52 proprietary stores, mostly in Brazil, to showcase
its goods. It also has its own virtual store and is using
the network of Body Shop franchisees in Southeast
Asia to open Natura locations there. It has opened
two stores in the New York area, but has no plans
to expand quickly in the U.S., Marques says. Until
that changes, American consumers need to rely on
online shopping and influencers such as Ana Kcira,
whose @fashionstylefoodie on Instagram has about
45,000 followers. She posted a photo of herself
spraying Natura’s pataua oil, a hair strengthener,
on a friend’s braid in Central Park—which generated
almost 700 likes. �Fabiola Moura, with Tiffany Kary● Number of direct-
sales associates Natura
will have after its
purchase of Avon6m