Natura was founded in 1969 in Sao Paolo, Brazil by Antonio Luiz Seabra as a cosmetics retailer. The shop he ran was far from being a success. Yet, this situation changed five years later in 1974, after he adapted the direct selling method.
By 1977, company’s product portfolio still contained only 40 products. However, growth was amazing in the following years: Natura’s sales grew at a 43% compound annual rate between 1979-1989!
2000s
In 2003, the company announced it was ending testing its products on animals. Natura became a public company and was listed on Sao Paulo Stock Exchange in 2004. The same year Natura overtook Unilever to become the market leader in the Brazilian cosmetics industry.
2005 was the year when the company expanded into France. The same year marked the appointment of Alessandro Carlucci to lead the company. Carlucci had been with Natura for 15 years, having joined right after finishing his university education.
Natura celebrated another milestone in 2009: 1 million consultants on the field.
2010 and the Following Years
By the year 2010, an article on The Economist was praising the company saying, “Natura Cosmeticos is emerging as a cosmetics giant by dint of clever marketing and borrowing from others. Everything about the company, from its use of recyclable materials in its packaging to its use of ordinary women rather than supermodels in its advertisements, is designed to emphasise the twin themes of naturalness and sustainability. Natura is also a master of what might be dubbed ‘lean innovation’. About 40% of its revenues come from products introduced in the past two years.”
In a Harvard Business Review article in 2012, Natura’s success was noted as “exceptional”. This was due to its first-class performance in Brazil, world’s third largest beauty market in an era when all emerging markets were dominated by international brands that also placed it among world’s top 20 beauty companies.
Natura was the 10th Most Innovative Growth Company on Forbes’ 2013 list.
In late 2014, it was granted the “B Corp” sustainability certification. This certification is given by B Lab, a non-profit organization, and is developed to promote high standards of environmental and social stewardship and transparency. At that time, Natura was the largest and the first publicly owned company that obtained this certification.
In late 2015, Natura took an important step. After a long period of offering its products only through the direct sales channel, it announced it would also open retail outlets and start retailing as well. Before this, Natura had a store in Paris and a concept store in Brazil. It was then said, the concept store was a part of company’s learning process before launching the omnichannel strategy.
Dependency on the Brazilian Market
For a very long time, Natura did not show any strong intentions to expand into the international arena. This was mainly due to the existence of a lucrative domestic market and its strong leadership position there. However, this would change. In 2013, Euromonitor was saying, “Natura Cosmeticos’ position as the leading cosmetics company in Brazil may ultimately depend on its ability to connect to international markets.” That year, Brazil accounted for 84% of Natura’s global revenue of BRL 7 billion (approx. US$2.2 billion) and the remaining 16% was generated by its other markets like Argentina, Chile, Mexico, Venezuela, Colombia, and France.
Once a rising star, Natura was shown as “the world’s worst performing cosmetics company” in a Bloomberg article in 2013. And the reason to this was the stagnant revenue from its core Brazilian market.
Acquisitions
As a sign of being forced to turn its face to international markets, in December 2012, Natura announced it would acquire 65% of the Australian retailer Aesop for about US$70 million. Aesop at the time had 60 retail locations in 11 countries.
In 2016, the company exercised its purchase options to acquire the remaining 35% of Aesop. Aesop had 177 stores in 20 countries that time.
In June 2017, roughly five years after Aesop’s joining, came a bigger move from Natura: Acquisition of The Body Shop. This transaction was worth US$1.1 billion. The Body Shop was founded in the UK in 1976 by the late Anita Roddick. She and her company pioneered the manufacturing and selling of cosmetics that had not been tested on animals and had used natural ingredients.
The Body Shop was operating 3,000 stores in 66 countries when it was acquired.
The most sensational (and costly) of all of Natura’s acquisitions was the addition of Avon to the group of companies. After rejecting Mary Kay’s, Amway’s and Coty’s offers in years, Avon this time chose to accept Natura’s.
The news first started leaking in the media during 2018. In May 2019, it was reported that Natura would pay US$2 billion for the transaction. Including the debt, the transaction was valued at US$3.7 billion. In January 2020, Avon’s acquisition was official.
Rebranding and Then, Restructuring
After acquiring Aesop and The Body Shop, Natura announced in early 2018, a new corporate brand that would consolidate all of its brands under one roof: Natura &Co.
Each brand would continue to operate independently under the leadership of their own CEOs. The rebrand aimed to improve the integration and interdependence of the existing three brands, Natura, Aesop and The Body Shop, the company said. Avon would then, join these brands after its acquisition in 2020.
In June 2022, Natura &Co announced a group reorganization plan that included a CEO change. As reported, this was in line with its strategic direction to increase the accountability of its individual brands. The company was expected to transition to a simpler holding company structure.
To this end, Non-Executive Director Fabio Barbosa would be the new Chief Executive Officer, succeeding Roberto Marques.
Divesting of Aesop
In late 2022, Natura &Co management started the process of selling a minority stake in Aesop. The management was initially exploring an initial public offering (IPO) for Aesop, but the volatility of the stock market caused the company to reassess its focus, as reported. It was estimated that Aesop could be worth about US$1.7 billion. On April 3, 2023, both L’Oreal and Natura announced that Aesop was acquired by L’Oreal at an enterprise value of US$2.5 billion.
Natura &Co said with this transaction, it will strengthen its balance sheet and free up resources to focus on its strategic priorities: The integration in Latin America, as well as the further optimization of Avon’s footprint and the improvement of The Body Shop´s business. The acquisition is subject to regulatory approvals, and the closing is expected to be in the third quarter of 2023.
Brands’ Revenue Contributions to the Group
Natura &Co’s 2022 consolidated group revenues were BRL 36.3 billion – approx. US$6.9 billion. 61% of this volume came from Natura &Co Latam (Natura, Avon, The Body Shop and Aesop brands in Latin America), 20% from Avon international (Avon markets excluding Latin America), 12% from The Body Shop (The Body Shop markets excluding Latin America) and, 7% from Aesop (Aesop markets excluding Latin America):
Click to read Natura &Co’s recently released 2022 Annual Report.
From 1969 to 2023, quite a journey, isn’t it?
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Hakki Ozmorali is the Founder of WDS Consultancy, a management consulting and online publishing firm in Canada, specialized in providing services to direct selling firms. WDS Consultancy is the publisher of The World of Direct Selling, global industry’s leading weekly online publication since 2010. Hakki Ozmorali is an experienced professional with a strong background in direct sales. His work experiences in direct selling include Country and Regional Manager roles at various multinationals. You can contact Hakki here.
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