Beauty industry begins to recover

After the earthquake generated by the pandemic in March and April, the hygiene and beauty products sector sees a faster recovery than expected at the start of the crisis.
The reaction began in May and became more so in June and July.
According to the manufacturers, two factors contribute to this movement: emergency assistance of R$ 600, mainly in regions such as the Northeast, boosting sales of hygiene items, such as soap, gel alcohol and shampoo; and, a consumer self-indulgence in the crisis, combined with the tendency to take more care, which increased the demand for creams and perfumes.
"July was fantastic. We sold 15% up from last year in the middle of the pandemic. It's surprising," says Renato Massara Jr, Commercial Director of Wheaton, Brazil's largest manufacturer of glasses for the beauty market, especially perfume bottles.
The company, which employs 3,500 people in São Bernardo (SP), came out of a perspective of laying off 500 employees, according to projections made at the beginning of the pandemic, for 80 hiring in July. This month, it reactivated an oven that would not operate again until December. In April, it projected a 25% to 30% decline in the year. Now, it expects to at least match the 2019 revenue of R$ 1 billion.
According to the Brazilian Association of the Personal Hygiene, Perfumery and Cosmetics Industry, the sector's revenues advanced 0.8% in the first half, compared to the first six months of last year. João Carlos Basilio, president of the entity, considers the percentage encouraging.
"The recovery was very large from May, considering that we had significant falls in the previous two months," he says.
In April, at the height of social isolation measures and while manufacturers were still adapting to the new reality, sales fell by 19.4%. In May, there was an increase of 5.2% and, in June, 4.9%, compared to the respective months of 2019. In perfumes alone, the advance in June was 20.7%.
"In addition to the increased concern with self-care, we observed a greater demand for gifts, with people wanting to show affection for those who have stayed away from social distancing," said Roberto Marques, President of Natura & Co, commenting on the group's results.
After a 23.5% april drop, Natura brand revenue in the country grew 23.6% in May and 29.4% in June on an annual basis. In the first half of the year, the increase was 8.7%.
The bet that was already being made on digital channels also contributed. "The level of digitization of the consultants was a great lever for them to navigate this new world," says Erasmo Toledo, Vice President of Business Brazil at Natura. Today, 80% of the brand's 1.2 million resellers sell by app or internet. In June, 889,000 of them had their own online store (65% more than a year ago) and orders for that channel tripled compared to June 2019.
In the Apothecary, online sales also tripled during the pandemic. "In the first three weeks, we had 40% of new consumers in e-commerce," says Artur Grynbaum, the group's president. The company has adopted new digital tools, such as a whatsApp service system that integrates the brand's resellers into physical stores – there are 4,000 stores in the country, mostly franchises. The sale is closed by the consultant and the delivery is made by the store closest to the customer's house.
Grynbaum does not cite sales figures, but does chorus with other executives and entrepreneurs in the beauty market who see a recovery level above what was expected at the beginning of the crisis.
For him, in addition to the concern with protection, which increased the sales of soaps and alcohol gel, people sought to anchor themselves in habits they already had and had a sense of well-being – such as using a cream, taking care of hair or perfume - in the face of total loss of control over other aspects of life in the pandemic. "It's a pleasure that's still within reach," he says.
The company reviewed product planning to adapt to the new consumer moment. Reduced releases in makeup – mainly lipstick, which lost prominence because of the masks – and directed commercial efforts to new lines of the brand's native spa body care and perfumes.
The recovery is also being felt by smaller companies, such as Phisalia, which manufactures hair products and children's toothpaste. "We realized that emergency aid of R$ 600 was very important in the North and Northeast, where our sales grew 25% in June," says Eduardo Amiralian, partner and president of the company. Sales in the country grew 15% in June, compared to a year earlier. Now, instead of a drastic drop, the expectation until December is to match last year's revenue of R$ 90 million.