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Contrary to pessimistic forecasts spurred by the current global economic crisis, the Brazilian beauty industry’s revenue grew 10.4% in 2008. According to the Brazilian Association of the Cosmetic, Toiletry & Fragrance Industry (ABIHPEC), the sector’s labor opportunities increased 3%, employing more than 3.5 million people—90% of whom are women.
João Carlos Basilio, president, ABIHPEC, expects that the results obtained in 2008 will turn Brazil into the second largest cosmetic consumer market in the world, pulling ahead of Japan and behind only the U.S. “The sales were favorably atypical in December and maintained good rhythm in January,” said Basilio. “The cosmetic, toiletry and fragrance market depends on consumers’ incomes and habits. If unemployment is contained primarily in specific sectors and in large companies, we can still expect an increase in sales.” As most beauty products are bought with cash, credit restrictions haven’t affected the industry; investments are forecasted to reach $300 million in 2009.
Natura Strengthens Position Throughout Latin America
Natura has been strengthening its position in markets throughout Latin America, notably in Mexico. The company first entered the Mexican market in 2004.
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According to Rodolfo Gutilla, director of corporate affairs, Natura, the country has proven to be surprisingly receptive to the Brazilian company, with sales well above expectations. “The projects will not only be maintained, but also expanded—the opening of the second Casa Natura outlet in Mexico is one example,” he said. Despite having postponed its incursion into the U.S. market due to the economic downturn, Natura intends to strengthen its position toward North America by investing in a country “that shares cultural similarities with Brazil.” Venezuela and Colombia are also potential growth markets, according to the company.
Overall, Natura’s 2008 numbers show that Latin American revenues grew 38% during January–September 2008, compared to the same period in 2007, to reach $60 million. The company’s goal is to hold a 4.5% market share in Latin America by 2012.
Elizabeth Arden to Reenter the Brazilian Market
Elizabeth Arden’s products will reenter Brazil in 2009 under the administration of a new importer, Sigma do Brasil, part of the Swiss selective distribution group Weitnauer. The company is planning to introduce cosmetics and fragrances in approximately 200 prestige points of sale in São Paulo, Rio de Janeiro and other southeastern cities.
Walter Marcantoni, business development manager, Elizabeth Arden, believes Brazil has been widely expanding selective channels, which attracts high-end brands to meet sophisticated customers’ demands.
Aroma do Campo Acquires Vita-A
Aroma do Campo, which has operated in the Brazilian market for more than two decades, has announced the acquisition of the hair care and hair coloring manufacturer Vita-A. The brand’s commercial team will be maintained, and all products will be incorporated into Aroma do Campo’s lines. The purchase was estimated at $14.34 million.
Farmais Foresees Growth in Summer Sales
With more than 500 stores in the south, southeast and midwest regions of Brazil, drugstore chain Farmais estimates a growth of 40% in perfumery and cosmetics sales during summer 2009. Growth will be driven by sunscreen and tanning lotions, hair lighteners, moisturizers and depilatories. Director Paulo Shima believes coastal cities can show even better performance.
Cimed Launches Cosmetics Lines
Cimed—Brazil’s fifth largest pharmaceutical company, in terms of units sold—entered the personal care market with three lines of products: sunscreen lotions, intimate wash and repellents.
According to new business manager José Ribeiro Suso, the company’s credibility in manufacturing medicine was essential to the successful acceptance of the cosmetic brand among both distributors and customers. Cimed has scheduled the launch of these products by mid-2009.
Fernanda Bonifacio is a Brazilian journalist who focuses on the beauty industry, and has been published in the U.S. and Europe. During 2002–2008, she represented ABIHPEC and its member companies globally.