For João Paulo Ferreira, the group’s CEO, one of the main reasons for Natura’s success lies in Brazil’s huge biodiversity, particularly in the Amazon region, where the group has forged partnerships with local communities to extract natural essences. “The Amazon is a global heritage. We are lucky to benefit from it as a large part of the forest is in Brazil,” said the leader, who received AFP at the group’s headquarters, near São Paulo, the economic capital of the country. Natura “has shown that it is possible to combine economic progress with the protection of the environment,” said Ferreira.
Such remarks are far from being innocuous in a country widely divided by the environmental policy of President Jair Bolsonaro. This notorious climate sceptic has provoked much controversy because of its intention to promote the expansion of agribusiness and mining activities in the Amazon, where deforestation and fires have increased sharply in recent months. “Let’s hope that when this moment of polarization is behind us, we will succeed in fostering dialogue” between government, landowners, traditional communities and NGOs, Ferreira adds.
Natura’s head considers the activities of the company have contributed to protect 1.8 million hectares in the Amazon region, “almost half of the entire surface of the Netherlands.” As an example, Mr Ferreira points ucuuba, the fruit of an Amazonian tree also known as baboonwood or wild nutmeg (Virola surinamensis), which is part of many of the group’s products. According to the CEO, picking this fruit has tripled the income of local communities, without cutting any tree. “It shows that it is possible to create wealth from the forest while leaving it standing,” he insists.
According Paulo Branco, a researcher at the Getulio Vargas Foundation (FGV), “Natura faces a constant dilemma: how to continue with a strategy of growth while respecting the ecosystems and local communities?” Mr Branco considers that Natura is”a pioneering company” in Brazil.
Natura’s founder, Luis Seabra, opened his first store in 1969, and the group took off on a direct sales model. Today, the Natura&Co group is established in 73 countries, with 32,000 employees around the world, including 6,600 in Brazil.
In 2018, the group achieved a turnover of 13.4 billion Brazilian réais (approximately USD 3.7 billion at the annual average conversion rate), an increase of 35% compared to the previous year. Net profit, however, fell by 18% to 584.4 million réais, mainly due to the absorption of the debt of UK’s The Body Shop, that Natura took over in 2017.
In May, Natura acquired Avon, another iconic brand originating from the United States. Once this transaction is approved by the shareholders of both groups and by the anti-trust authorities, Natura&Co will become the world’s fourth largest seller of cosmetic products, lagging just behind France’s L’Oréal, US’s Procter & Gamble and the Anglo-Dutch conglomerate Unilever. This expansion was welcomed by investors at São Paulo’s Stock Exchange where the share price of the Brazilian group is currently twice as high as one year ago.
“Ten years ago, 95% of our business was in Brazil. But during this decade, we have experienced strong growth in Latin America and a third of our sales now take place outside Brazil,” highlighted the CEO, who does not hide his ambition to transform its company into a leading global player.