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Brazil Now World’s Top Market for Fragrances

By: Fernanda Bonifacio
Posted: July 13, 2011, from the July 2011 issue of GCI Magazine.

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Besides Nivea, Beiersdorf Group’s brands are directing their attention to the Brazilian market. In spite of its upmarket prices, luxury skin care brand La Prairie is estimated to have a 1–2% share of Brazilian women as consumers, and the brand has set a goal to reach 5% penetration by the end of 2011. The brand’s products are as much as 50% more expensive in Brazil than abroad.

Natura Plans to Start Manufacturing Overseas

With 6.3% growth in the first quarter of 2011, Natura is investigating the possibility of adding manufacturing capabilities outside of Brazil to supply domestic Brazilian demand. The appreciation of the real (R$) combined with high tax burdens are among the reasons for exploring the possibilities, the company noted. The company paid approximately R$1.5 billion in taxes on its R$5.13 billion 2010 net revenues.

“In a globalized world, it is essential to ensure high productivity at reasonable costs,” said Alessandro Carlucci, CEO, Natura.

Natura currently manufactures in Brazil and Argentina (through an outsourced factory). Starting in 2011, the company will also produce shampoos, makeup and fragrances in Colombia and Mexico. “We are committed to manufacturing close to consumers in order to reduce costs, carbon emissions and also to accelerate the delivery of products,” said Carlucci.

Natura’s revenues in Argentina, Chile and Peru totaled R$255 million in 2010, with an increase of 17% over the previous year. According to Carlucci, the company is among the top three cosmetic suppliers in those countries.

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