Natura Cosméticos: Fragrance that Captured Brazil’s Heart

Natura Cosméticos S.A. is one of the leaders in marketing fragrances and cosmetics in the fifth largest cosmetics market in the world – Brazil. The company has strong 450,000 salesmen called “consultants” who pioneered direct selling in Brazil. Natura Cosméticos S.A. only trails Avon Products Inc.’s subsidiary in Brazil, the Avon Cosméticos Ltda.

Natura is said to have a distinct corporate value and has the reputation of a high corporate ethical standard. The company executives make sure that they are updated with recent developments in biochemical, chemical and pharmaceutical researches.

Natura’s story started with an economist named Antonio Luiz da Cunha Seabra who was with Sperry Rand Corporation when he established Natura in 1969. He started the business with just $9,000 and a handful of Jean-Pierre Berjeaut’s cosmetic formulations. The first store was in Sao Paulo. It started like a luxury boutique with four workers who promoted Berjeaut’s natural lotions and creams.

The store did not do well so Natura changed from a retail store to a direct selling business in 1974. The salesmen did a door-to-door marketing of the products and earned by commission. The sales force grew to 2,000 and the annual average sales rose to $5 million.

Natura’s growth in direct selling was the result of the company’s ability to anticipate the market trends. Before the retailers realize their need, Natura has already responded earlier. By the time the needs arise, Natura is already there with the solutions.

Direct selling has also enabled Natura to sell all their product lines as compared with focused sales only on best selling products with retailing. With direct selling, selling efforts are concentrated on all potentially earning products.

In 1990, Natura’s sales were reported at $180 million. But the economic recession in 1992 forced Natura to lay off 270 workers. During the recession, Seabra and another partner named Guilherme Peirao Leal purchased the stakes held by Yara Pricolli, another partner, for $25 million. Seabra and Leal recruited experienced executives from their large competitors and laid the basis for Natura’s further growth.

In 1994, Natura’s sales reached $350 million. The company held 14% of the Brazilian cosmetics and personal hygiene market. In 1996, sales reached $580 million. Salesmen were up by now to 160,000, with each consultant sold selling an average of $5,760.

In 2000, Natura’s portfolio reached 300 items. The recent years also featured Natura’s commitment to R&D making the company as Brazil’s biggest investor in scientific research and testing.