SÃO PAULO, BRAZIL — Natura & Co has become the fourth largest beauty company in the world following the acquisition of Avon, as it vies for dominance in the purpose-driven beauty segment.
With consumers increasingly expecting businesses to look beyond their balance sheets and take more accountability for their impact on the planet, purpose-driven beauty is growing in tandem with the clean-beauty market, predicted to be valued at $54 billion by 2027. And as high-profile acquisitions from last year demonstrate — such as Unilever’s purchase of Japanese clean-beauty brand Tatcha for $500 million and Shiseido’s acquisition of cult-favourite start-up Drunk Elephant for $845 million — legacy brands are increasingly making moves to futureproof themselves in an era of conscious consumerism.
In an interview with Fortune, newly-appointed Group CEO, Roberto Marques, explained that consumers expect “companies to do more” and “[Natura & Co’s] aspiration is to build not just the best beauty company in the world, but the best beauty company for the world.”
Natura is certainly no stranger to social enterprise. From its inception in 1969, the Brazilian brand has focused on sourcing local, natural ingredients, preserving the Amazon rainforest, and community development through its Amazônia programme. Long before environmental issues entered the consumer zeitgeist, the company has been implementing refill packaging, as well as using water footprint guidelines as a deciding factor in its production and supply chain.
However, Natura co-founder Antonio Luiz Seabra, who led the acquisition of The Body Shop from L’Oréal in 2017 for over $1 billion, argued that the latest buy-out would further unite the company’s shared vision and a passion for beauty and relationships. “Together, we will be an even stronger force for good, striving to build a fairer and more beautiful world,” he said in a recent statement.
With the rise in consumers willing to pay a premium for brands that deliver on social responsibility claims, it’s not surprising that the journey forward for Natura & Co will necessitate the completion of more purpose-driven goals for Avon – which was recently added to PETA’s cruelty-free list.
Natura & Co has already been a driving force in bringing the Body Shop back to its ethical beauty roots, after eleven uninspiring years under L’Oréal. In fact, under the group’s leadership the Body Shop recently achieved B Corp certification. “We are going back to our brilliant founder’s vision that we should never have departed from,” commented the Body Shop’s General Manager, Andrea Blieden at the time.
Certifications like B Corp, Leaping Bunny and Guaranteed Fairtrade have all gained favour with consumers as they seek to buy from ethical brands. However, businesses need to go beyond marketing strategies to acquire them, and Natura & Co acknowledges that Avon certainly still has work to do.
Nonetheless, Avon shareholders approve the $2 billion deal – the company’s share price increased 10% after the announcement, with Marques commenting: “We want to unleash, to celebrate that legacy of Avon again. We want people to be proud.”
Meanwhile, with its strengthened portfolio of Natura, Aesop, the Body Shop and Avon, Natura & Co is expected to gross annual revenues of more than $10 billion. A bolstered multi-channel, worldwide presence is also expected to further enable its “purpose-driven goals”.