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Latin Beat: First Avon Door in Brazil

Cristina Kroll

Avon has invested $1 million on the implementation of Avon Expressa, the company’s first cosmetic sales center in Brazil. Located in Guarulhos, a city with more then one million residents, the stocking center will train the company’s Brazilian sales force and offer the opportunity for consumers to sample products.

The company currently operates similar facilities in Venezuela, Argentina, Panama, Puerto Rico, Estonia, Malaysia, the U.S and China, and has found the business model to strengthen company/reseller relationships.

Avon has had a presence in Brazil for 49 years, and operates a plant in the city of São Paulo and distribution centers in the states of São Paulo, Minas Gerais, Ceara and Bahia.

The Power of Luxury

Coty Prestige has confirmed its interest in Latin America due to the region’s growth potential. Argentina is of particular interest because of its remarkable recovery after devaluation of the local currency in 2001. In fact, Argentina’s current growth rate is better than that of Brazil, according to Bryan Aykroyd, vice president of finance, Coty Prestige. Currently based in France, Aykroyd gained practical strategic knowledge about Argentina working for a local subsidiary of Procter & Gamble until 2000.

The importance Coty places on Argentina was reflected recently in the regional launch of the new fragrance ckIN2U in Buenos Aires. Approximately 500 guest­s—including journalists and retailers from Argentina, Brazil and Paraguay­—were present at the launch in
the Ciudad Cultural Konex in Buenos Aires. “The fragrance’s target is young people between 18 and 24,” said Aykroyd.

In 2007, the company estimates 10 additional launches on the continent.

Finally, here is a follow up to a report printed in the June issue of GCI magazine. Haydee Luna, general manager Latin America for Coty Prestige Travel Retail and Export, did not give a precise date that the contract with the regional distributor Bright Star will end in South America (for the brands that the company acquired in 2005 at a global level). However, Luna affirmed that the company is very satisfied with the performance of Bright Star in the region. Further, Favio Palazzi, general manager of Coty Argentina, did not comment on this matter when he was consulted. For this reason, even though Coty has a branch in Argentina, it is very likely distribution will continue in the hands of the Brazilian company.

Ammonia-free in Argentina

During a crowded evening event at La Rural of Palermo, Buenos Aires, Farouk Shami, president, Farouk System Group, celebrated his company’s launch of its hair straightening system, to be distributed by Divina in Argentina.

Shami told GCI he was very enthusiastic about the ammonia-free system and its potential in the Argentine market. ANMAT—the Argentine regulatory body overseeing medicine, food and cosmetics—banned all the products containing ammonia in 2006.

The creator of CHI and Biosilk product, Shami further noted that the product is a better option for both consumers and hair professionals. “I founded Farouk Systems based on a mission and a dream: provide my fellow hair artists with a safer workplace environment, free of harsh chemicals,” he said.

Continued Expansion in LA

Lumene’s skin care products will be launched in 70 doors of Chile’s largest pharmaceutical chain, Farmacias Ahumada (FASA), in 2007. The first phase will feature all of Lumene’s top skin care ranges, which contain unique raw materials from the Arctic.
“FASA is constantly on the lookout for new internationally known brands for its product selections, and was attracted by the Lumene brand’s success in the United States,” the chain stated.

“This is an extremely important new territory for Lumene,” said Pekka Silvennoinen, vice president, Lumene International. “Strong distribution partners are a key factor in our internationalization strategy, and cooperation with the largest pharmaceutical chain in Chile and Latin America is an excellent example of this.”

FASA operates 350 Chilean locations that serve 45 million consumers annually.

Cosmetics and Food

Argentinean personal care company La Pasionaria has entered international markets. Its soaps and creams are now available in London, Mexico, Rome, Los Angeles, Lithuania and Estonia, and the company is negotiating for distribution in Chile, Brazil, Israel and Spain.

Founder and director Carina Cavazza created La Pasionaria on a foundation of childhood experiences and love of perfumery, food and cooking. “The mixture of these two crafts made me explore the home aromas of the kitchen and discover the incredible cosmetic properties of the food ingredients,” said Cavazza.

Cavazza opened her first retail location in 2005, while maintaining distribution through other Argentine retailers. The firm creates 40 varieties of soaps, creams and essences, and Cavazza believes that “the smells can reach every single moment in the daily activity of ironing, home decoration, relaxing moments, the election of the wardrobe and even the intimate rest.”

The company projects sales in 2008 to grow 55% over 2007’s numbers. Currently, the company’s annual revenues have reached $232,000, and Cavazza estimates she will open one retail location each year for the next five years and franchise in various places within Argentina.

Beraca, Corn Products Alliance

Beraca and Corn Products have formed an alliance to concentrate on innovations that combine Amazonian actives with vegetable polymers. The objective is to meet the demands of clients and serve the industry in the most efficient way possible. The agreement includes Beraca’s entire product portfolio.

“Beraca made this alliance to use technologies that Corn Products already dominate with the ones that we already dominate, creating new areas of innovation for the clients of both,” said Jefferson Santos, marketing manager, Beraca.

Eucerin’s Brazilian Relaunch

German manufacturer Beiersdorf has formed a strategic agreement with Aché, a Brazilian laboratory, to reintroduce the Eucerin laboratory in South America. Currently available in 50 countries, Eucerin had a Brazilian presence from 2003–2005, and is set to take advantage of the local 131% growth of skin care throughout the last five years.

Beiersdorf anticipates that the Brazilian laboratory will maximize the potential of the brand, and states that the agreement is in line with Beiersdorf’s growth strategies and goal to expand 10% annually.

“We expect to be among the most important five brands in Brazil in a period of five years,” said Nicolas Fischer, president, Beiersdorf Brazil.

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