News from Latin America

Things of Beauty In Latin America

Consumer demand for beauty products continues to surge in Latin America. This new column in Happi reports on the companies and the trends that are driving the market.

Beauty product sales in Latin America totaled $54 billion last year, and accounted for a 15.3% share of the global market, according to data from the Chamber of Latin American Cosmetics Industry (CASIC). According to industry sources, one in four products that are sold in Latin America go through direct sales channels. Brazil dominates the region, with a 52.9% market share; followed by Mexico, 14%; Venezuela, 10%; Colombia, 6%; Argentina, 5%; Chile and Peru, 3% each; Ecuador and the Dominican Republic, about 1% each.


Multinationals Dominate
The biggest players in the region are multinationals such as Colgate-Palmolive, Procter & Gamble, Unilever, Johnson & Johnson, L’Oréal, Avon and Reckitt Benckiser. But there are also important local companies that have grown to become multinationals in their own right. This list includes companies such as Natura, L´Ebel and Yanbal.

The Brazilian Association of Personal Care, Perfumery and Cosmetics Industry (ABIHPEC) reported in February that the sector’s 2010 revenues totaled $16.2 (ex-factory). That was a 12.6% increase over 2009 results and marked the 15th consecutive year in which the Brazilian market grew at a double-digit rate.


Latinos Love Color
According to ABIHPEC data, sales of color cosmetics in Brazil rose 9.7% in 2009 to $2.17 billion. By segment, eye makeup sales reached $550 million, while lipcolor topped $710 million. One of the color cosmetic segment leaders is Contém 1g, which sells more than 500 items in approximately 220 stores in the country.

Last year, 840 million units of nail color were sold in Brazil. The biggest brands in the category include Impala, Risque and Colorama.

The Brazilian direct sale company Natura, which boasts more than 1.2 million beauty consultants and operations in Argentina, Chile, Peru, Mexico and Colombia, had net revenues of $5.1 billion in 2010. It competes in the door-to-door sales channel with Avon, which has its own army of 1.1 million consultants.
Eudora is the new brand from Boticário Group, owner of the O Boticario brand and 3000 franchise stores in Brazil. With more than 300 SKUs, Eudora will explore the sensual aspect of body care, hair, fragrance, makeup products and accessories. The line debuted this month via a multichannel system that includes door-to-door sales, catalogs and e-commerce with social networking options to enable interactivity among consumers.

E-commerce is expanding in Brazil. The channel is led by Sacks, an online retailer of fragrances, cosmetics and toiletries, which was acquired last year by LVMH. Sacks carries more than 270 brands, and its client base exceeds 830,000. According to sources, Sacks is one of the top-three most frequently accessed pure-play e-commerce sites in Brazil, attracting 4 million unique visitors each month.

Outside Brazil, the largest color cosmetics markets in Latin America in 2009 were Mexico, $862 million; Colombia, $212.2 million; Argentina, $174 million and Peru, $131.3 million, according to Euromonitor International.


Accessible Fragrances
Latin America is also a growing market for fragrance companies. Fragrance sales in Brazil, for example, rose 5% to $4.8 billion in 2009, according to ABIHPEC. That total gave Brazil a 13.1% share of the world market. The direct sales channel accounted for 72% of sales, followed by franchise (20.5%) and retail (7.5%).

Fragrance suppliers certainly recognize Brazil’s importance. Sources say that Givaudan, Firmenich, Symrise and IFF, the four major fragrance houses in the world, invested $90 million in the country during 2009 and 2010.

Elsewhere, fragrance sales in Argentina rose 14.3%; Mexico added 4.7%; Peru, 2.3% and Colombia, 0.9%, according to Euromonitor. In value terms, Mexico’s sales topped $1.2 billion; followed by Colombia, $580 million; Argentina, $414 million and Peru, $157.5 million. In Peru, L’Ebel (Belcorp Group) is a major producer of perfumes.


Hair Care Diversification
According to ABIHPEC, Brazilian hair care market sales exceed $6.1 billion. In second place, according to Euromonitor International, is Mexico, at $1.6 billion, followed by Argentina, $717.3 million; Colombia, $427.2 million and Peru, $376.7 million.

Brazil is the regional leader in several individual categories, as well. For example, the country holds a 37.3% share of the Latin American market for permanents and straighteners. The country is also a leader in the conditioner segment with an 18.8% world market share. With sales of $2.37 billion, one in four conditioners sold worldwide can be attributed to Brazil, according to ABIHPEC.
On a far smaller scale, according to the Argentine Chamber of Cosmetics and Perfumery, one of the categories with the highest exporting index is hair dyes with $6.9 million and shampoos with $4.2
million.


Skin Care For All
The Brazilian skin care market, which includes body care products, totaled $3.69 billion in 2009, good for a 4.5% share of the global market, according to Euromonitor International. Brazilian companies, especially Natura and O Boticário, are investing heavily in technology to compete with international brands that arrive in Brazil. Both Natura and O Boticário have developed special complexes based on local plants with optimized effects, such as the pariparoba, which is included in Seiva Creme (sap cream) within the Natura Ekos line. Pariparoba is said to regenerate skin’s collagen and elastin.

According to ABIHPEC, sun protection products and skin care products will be the two categories with the greatest potential for growth in Brazil this year.

As in other product categories, Mexico is in second place in the body care segment, with sales of $421.6 million. Colombia was next at $230.6 million, followed by Argentina ($137.3 million) and Peru ($49.9 million).

According to the Argentine Chamber of Cosmetics and Perfumery Products, the deodorant category has the greatest export potential among personal care. In fact, exports reached $35.6 million in 2009.

Elementos Essenciales is one of the Argentinean companies counting on the country’s natural assets. Its products combine aromatherapy with a romantic Latin feature. One of its newest offerings is Cacao, a fresh body care line based on aromatherapy that includes notes of white woods, fruits and flowers.

In Brazil the most appreciated products are the fresher ones, with innovative jelly textures and scents of Brazilian wild fruits such as pitanga.

Demand for cosmetics continues to build throughout Latin America. Although Brazil dominates the region, growth opportunities exist in Mexico, Argentina and other countries on the continent.



Sueli Ortega, Correspondent
Sueli Ortega has written forIsto É and O Estado de São Paulo. Since 1987, she has served as a correspondent for Cosmetics International. In addition, she created the beauty channel for El Sitio, an Argentinian website and the Women Channel.

She has her own website, Cosmeticos BR and can be reached at [email protected]