Natura Brings Retail Model to Brazil with São Paulo Opening

Photo: Inside Natura’s São Paulo, Brazil, store.


Natura Cosméticos is the leading cosmetics brand in Brazil, but the beauty company is looking to expand its customer base with a brick-and-mortar approach.

At the end of April, the sustainability-minded brand opened a retail store in São Paulo, Brazil, also home to its global headquarters. The store is one of two operated by the $2.4-billion company, which just a year ago added e-commerce to its direct sales model. Natura opened its first store in Paris eight years ago as part of a multi-channel operation in France.

The São Paulo store was more than two years in the making, including a test run in a smaller Brazilian city, where Natura found that brand recall increased as a result of its brick-and-mortar presence. In the design phase, the company even constructed life-size mockups of two different concepts, in order to collect feedback from stakeholders.

The retail strategy is part of a larger effort to connect to consumers who, historically, have not formed strong ties to Natura. For example, management believes an in-store experience will draw young consumers in big cities, where direct selling is not as widespread, as well as crowds shopping for holidays and other special occasions.

According to João Paulo Ferreira, Vice President of Sales, the model creates important synergies for Natura, attracting shoppers who will eventually buy through all available channels, including the brand’s consultants, who number 1.5 million in Brazil and 400,000 across international markets.

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Oriflame CEO Talks Potential Expansion into U.S., Brazil

Expansion into the United States and Brazil could come in the not-too-distant future for Oriflame, the Swedish cosmetics maker that currently counts Russia as its largest market.

The Swiss company’s CEO, Magnus Brannstrom, who will keynote the DSN Global 100 Celebration in April, told Reuters that Oriflame is looking to enter the two major markets within a few years. In 2014, Brazil was the fifth-largest market for direct sales, according to the latest data from the World Federation of Direct Selling Associations. The market accounted for 7 percent of global revenue, trailing only the U.S. and Asia-Pacific powerhouses China, Japan and Korea.

The focus on new markets comes as Oriflame seeks to recover from turmoil in Russia and Ukraine, another key market. Brannstrom said he is “cautiously optimistic” about 2016, after the company’s mid-February report that local currency sales in the first quarter were up 9 percent from a year earlier. Management last month released fourth-quarter profits that beat expectations and discussed bringing back a dividend in the fourth quarter, after cutting the payout for the past two years.

As the company eyes the U.S. and Brazil, emerging markets will continue to drive growth in the long term, with China or India likely surpassing Russia as Oriflame’s biggest market, said Brannstrom. Turkey and Mexico also are top markets for the company, which sells its beauty products through more than 3 million Consultants worldwide.

Natura Named One of the World’s Most Ethical Companies

For the past decade, the Ethisphere Institute has recognized companies that lead the world in ethical business practices and standards. This year, Brazil’s Natura Cosméticos has once again secured a spot on Ethisphere’s list of the World’s Most Ethical Companies.

The program aims not only to showcase forward-thinking organizations, but also to highlight the connection between good ethical practices and good performance. Ethisphere reports that, on a financial basis, the companies on its list historically have outperformed their peers.

“Companies that demonstrate leadership in areas such as citizenship, integrity and transparency create greater value to investors, communities, consumers and employees, thereby solidifying a sustainable business advantage,” Timothy Erblich, CEO of the Ethisphere Institute, said in a statement.

Natura has graced every World’s Most Ethical Companies list since 2011, as well as the inaugural 2007 list. The seller of cosmetics and personal-care products is the only Brazilian honoree in this year’s crop, and one of only four companies in the Health & Beauty industry. In all, the 2016 list names 131 companies from 21 countries, with more than 45 industries represented.

The vetting process is centered on Ethisphere’s “Ethics Quotient”—a proprietary rating system that evaluates companies in the areas of ethics and compliance programs, corporate citizenship and responsibility, culture of ethics, governance, and leadership, innovation and reputation. Honorees are selected for promoting good ethics internally, empowering managers and employees to make good choices, and shaping industry standards through their efforts.

Amway Opens $13 Million Botanical Research Center in China

Photo: The Amway Botanical Research Center in Wuxi, China.


To facilitate the study of plants integral to Amway’s best-selling Nutrilite supplement line, the company has opened the Amway Botanical Research Center in Wuxi, China.

The $13 million site, which Amway developed over the past two years, comprises a laboratory and large greenhouse built on 84 acres of farmland. In a statement, the Michigan-based company said it will use the site to research soil nutrients, plant physiology, extract quality standards and processes.

Chinese herbal medicines, which use plants and botanicals to promote optimal health and natural balance, were a source of inspiration for Carl Rehnborg, the creator of Amway’s Nutrilite brand of vitamins and dietary supplements.

“The new ABRC is our effort to research and understand botanicals to a greater extent—using the most advanced technology and scientific practices—and integrate the findings into our products,” George Calvert, Chief Supply Chain and R&D Officer, said in a statement.

Amway has acquired 6,400 acres of certified-organic farmland across Brazil, Mexico and the U.S., in addition to its newest site in China. The company spent three years inspecting various sites before selecting the Wuxi location on account of its optimal growing conditions.

Direct Selling’s Strength in the World’s Billion Dollar Markets

by Andrea Tortora

Direct selling continues to gain ground worldwide, with global retail sales and the total salesforce both reaching record highs in 2014.

The World Federation of Direct Selling Associations (WFDSA) estimates that retail sales rose 6.4 percent to $182.8 billion in 2014, up from $171.8 billion in 2013, with all regions and three-quarters of direct selling countries posting gains. The total salesforce grew by 3.4 percent in 2014 to 99.7 million people, up from 96.5 million in 2013. All of which lights the stage for coming geographic shifts in market dominance.

“The most recent figures highlight the increasing opportunities that direct selling offers,” says WFDSA Chairman Doug DeVos. “Customers seek personalized service and quality products, and direct sellers are able to meet those needs in a way that is convenient and enjoyable. At the same time, people who aspire to earn a little extra or launch a full-time business venture are drawn to direct selling due to its flexibility and pay-for-performance structure.  It’s exciting to see more people, both customers and distributors, enjoying the benefits of direct selling.”

As part of WFDSA’s annual global statistics gathering, data is collected in local currency figures, which are then converted to U.S. dollars using 2014 exchange rates for all years. When comparisons are made to determine year-over-year change, this practice eliminates the impact of currency fluctuation, explains Judy Jones, Market Research Insights Leader at Amway and Chair of the WFDSA Global Research Committee. The 2015 report comes with an expiration date of May 2016, when the next year’s data will be published. For some markets, sales are estimated until the respective country reports its official figures to the WFDSA. At that time, actual data is restated and accounted for the next year.

These most recent figures confirm direct selling’s strength and its ability to keep reaching more people—as sellers and consumers—in all corners of the globe. The industry’s 6.5 percent three-year compound annual growth rate (CAGR) from 2011 to 2014 is evidence of that power.

The Top 5 countries account for 61 percent of all global sales. All but one report a positive CAGR (2011-2014):

  1. United States, 4.9 percent
  2. China, 18.7 percent
  3. Japan, -2.3 percent
  4. Korea, 8.1 percent
  5. Brazil, 6.7 percent

In all, 23 countries posted retail sales from direct selling of $1 billion or more in 2014. That group accounts for 93 percent of global sales from direct selling.

Leading the pack of the Top 5 countries once again is the United States, where the 2014 sales of $34.5 billion set a record and grew by 5.5 percent from the prior year. The U.S. CAGR for 2011 to 2014 is 4.9 percent. There are 18.2 million people who distribute products, up 8.3 percent from 2013. Nearly 75 percent are women, which means 14 million females are building their own businesses.


Overall estimated retail sales rose 6.4 percent to $182.8 billion in 2014, up from $171.8 billion in 2013.


Companies that are members of the U.S. Direct Selling Association (U.S. DSA) employ 55,300 people who are highly trained experts in their field. For example: 3,000 employees are science professionals, including chemists, biologists and engineers.

“Robust salesforce and revenue figures only tell part of the story behind direct selling’s success in the United States and around the world,” says Joseph N. Mariano, President of the U.S. DSA. “Our channel also provides …

Click here to read the full article in Direct Selling News.

Avon North America Sees Rare Profit in Second Quarter

Sales at Avon Products Inc. (AVP—NYSE) continued to decline in the second quarter, but the beauty company’s lagging North America division posted its first quarterly profit in several years, Avon said Thursday.

Second-quarter revenue fell 17 percent to $1.8 billion, weighed down by currency pressures in several foreign markets. On a constant-dollar basis, overall sales remained flat, with growth in Russia and the Philippines offset by declines in Brazil, China and the U.S.

The New York-based company reported adjusted earnings of 11 cents a share, surpassing the 7 cents predicted by analysts but dropping 20 cents from a year ago.

Heavy cost-cutting initiatives are paying off for the company in North America, where it saw a modest profit for the first time since the first quarter of 2012. Despite an improving bottom line, the number of Avon sellers in North America fell 16 percent from the second quarter of 2014. Overall, the brand’s salesforce shrunk by 2 percent from a year ago.

Avon said its expectations for the full year remain the same. The company forecasted modest constant-dollar revenue growth, with continued negative effects from currency exchange rates.

Former Avon Bidder Scoops up 43 P&G Brands

Photo: P&G Headquarters in Cincinatti.


The beauty industry is undergoing one of its biggest shake-ups in recent history with the announcement of a deal between Procter & Gamble Co. and Coty. Following weeks of speculation, the two beauty conglomerates have confirmed that Coty is buying 43 beauty brands from consumer products giant P&G.

The $13 billion deal—which includes leading brands such as CoverGirl cosmetics, Clairol hair color, and Hugo Boss and Dolce & Gabbana fragrances—is part of P&G’s strategy to streamline its sprawling business and focus on marketing everyday staples like its Tide laundry soap and Crest toothpaste.

P&G said it will transfer the brands into a separate company that will then merge with New York-based Coty, whose beauty and fragrance brands include Calvin Klein, OPI, Sally Hansen and Marc Jacobs. P&G has shed about 15 percent of its portfolio of brands, with the latest round accounting for annual sales of $5.9 billion.

In early 2012, Coty made a similar $10.7 billion offer for Avon’s business as the larger company faced lagging sales that continue to affect its bottom line. After two months of back-and-forth, Coty withdrew its bid, citing a “lack of engagement” on Avon’s part.

The P&G merger will position Coty as a global leader in fragrances and boost its share of the color cosmetics market. In a statement, the company said it is looking to build its presence in major beauty markets like Japan and Brazil, where Coty partnered with Avon last year to sell its fragrances through Avon’s 1.5 million Brazilian representatives.

Jeunesse Announces Acquisition of MonaVie and mynt

Two prominent brands in the health and wellness segment are joining forces in a strategic acquisition announced this week.

Skincare and supplement manufacturer Jeunesse Global has completed the acquisition of MonaVie LLC, a nutrition company that markets juice blends, energy drinks and shake mixes. The acquisition includes the MonaVie-backed mynt brand, which launched in 2014 as a platform to attract a younger generation of tech-savvy, community-minded entrepreneurs.

It’s the second acquisition for Orlando, Florida-based Jeunesse. In 2011 the company acquired GreatLife Intl., another direct seller in the health and wellness niche.

Jeunesse’s leadership was not aggressively looking to acquire, Chief Visionary Officer Scott Lewis told DSN, but they found the brands compatible in more than just the shared French origin of their names. The companies have developed similar cultures and established global brands. MonaVie is operating in key markets such as Brazil, which Jeunesse has targeted as a strategic next step in its international expansion. Through its mynt brand, MonaVie is also actively courting young entrepreneurs.

“From a strategic point of view, we’ve been trying to come up with strategies to penetrate Gen Y and attract a younger demographic as well,” said Lewis. Jeunesse has announced plans to launch the mynt brand in Europe this summer and in Japan soon thereafter.

Another factor that came into consideration was the loyalty MonaVie has inspired among its sales leaders. “We respected the fact that a lot of the top leaders who have been there since the heyday are still there,” Lewis noted. “There is a lot of attrition, but when you look at the top distributors, a lot of them have remained loyal.”

Salt Lake City-based MonaVie launched in 2005 and soon experienced exponential growth. After posting three-year revenue growth of 5,883 percent, the company appeared on the 2009 Inc. 500, an annual list of the fastest-growing companies in the U.S. MonaVie ranked No. 18, with $854.9 million in 2008 revenue.

In the following years, MonaVie experienced growing pains and incurred considerable debt, which Jeunesse has cleared as part of the acquisition agreement. The company has not disclosed further details of the transaction.

“This is an exciting step forward for MonaVie and our distributors,” MonaVie President Mauricio Bellora said in a statement. “Our diligent work over the past two years has resulted in a right-sized company with innovative products and an efficient sourcing platform.”

Under the Jeunesse umbrella, the combined businesses represent a network of more than 4 million distributors in more than 100 countries. The two brands will carry on business as usual, maintaining their respective product lines and distributor structures, as they undergo a gradual integration.

“We’re not in any rush,” Lewis emphasized. “We want to get the company profitable, make sure they have the support to grow and see what happens.”

Natura Becomes World’s Largest B Corps Certified Brand

Natura Cosméticos, Brazil’s leading cosmetics, fragrance and toiletries maker, has built its business on a commitment to sustainable development. The brand’s purpose-driven practices emphasize respect for and preservation of the planet, as well as a strong sense of social responsibility. Pursuing that core philosophy, Nature has now become the largest—and first publicly traded—company to attain B Corps certification.

The nonprofit B Lab certifies B Corporations for voluntarily meeting rigorous standards of social and environmental performance, accountability, and transparency. More than 1,000 Certified B Corps across 33 countries and more than 60 industries are currently working to give new meaning to success in business.

Like its fellow B Corps, Natura leverages the power of business to solve social and environmental problems. For example, the company has long used refill packaging with less than half the environmental impact of conventional versions, and consistently works to reduce its consumption of water, energy and raw materials. Natura is also working to preserve Brazil’s biodiversity through a research program in partnership with Brazilian universities. A focus on people and place has led Natura to build “equitable” relations with numerous traditional communities to obtain ingredients found in local flora.

Natura joins two other large, high-profile businesses recently added to the B Corps ranks. Crowdfunding platform Kickstarter and energy company Green Mountain Power both announced certification earlier this month. With these latest additions—Natura is a 7,000-employee company with $2.65 billion in net sales last year—B Corps has added considerable heft to its community of small, privately owned companies.