Cosmetics growth roars ahead in Brazil

- Last updated on GMT

Related tags: Skin care products, Cosmetics, Personal care

The Brazilian cosmetics and toiletries industry is continuing to
demonstrate strong growth, after the country's industry body
revealed that sales have outstripped global growth in 2004. The
performance is being driven by the increased spending power of
women and the sustained strength of the economy. Simon Pitman
reports.

The Brazilian Toiletry, Perfumery and Cosmetic Association (Abihpec)​ says that industry sales jumped by 17.3 per cent to reach BRL 12.9 billion ($4.4bn) during 2004 - currently one of the strongest growth rates world-wide. In 2003 Euromonitor​ valued the global cosmetics and toiletries industry Euromonitor at just over €200 billion, with growth rates averaging 4.8 per cent.

The results reflect the continued improvement of the Brazilian economy following a number of difficult years at the start of the decade. Likewise it also shows that the country's cosmetics and personal care sector is living up to its potential, outstripping general economic growth in other sectors.

Between 1999 and 2003, the Brazilian manufacturing sector recorded a growth rate of just 0.5 per cent, reflecting the economic hardships during that period. However, the cosmetic and toiletries sector in the country has consistently bucked the overall trend in the economy, returning a compound growth rate of 8.7 per cent during the five yearss up to 2004.

Brazil's economic turmoil peaked in 2002, but since then the government has successfully managed the economy, stabilizing the value of the Real against the US dollar to level off high rates of inflation.

Combined with a more stable economy, the country's cosmetics and toiletries sector has been given added impetus by the number of women who are now working in Brazil, Abihpec says. This has helped to give women a new sense of economic independence, which in turn has helped to significantly increase their spending power in recent years.

Combined with this the fact that the country's ageing population is increasingly looking to preserve youthful looks is helping to fuel growth in skin care products, anti ageing products as well and sun care products.

Skin care products have become increasingly sophisticated in Brazil, with consumers taking to products that include more active properties combined with natural ingredients.

Likewise, the increasing awareness of the ageing affects and the risk of skin cancers caused by exposure to the sun is prompting Brazilian consumers to reach for sunscreens with higher sun protection factors. The most popular protection is currently 10 to 15 SPF, but equally sunscreens of between 30 and 50 SPF are becoming more common place.

For their part major cosmetic companies - and in particular direct sales businesses such as Avon and Natura - have been striving to increase their presence in this thriving market during the past couple of years.

Brazil-based Natura became a public listed company last year, having achieved an increase in its operational revenue of 35.4 per cent in 2003, to reach €612 million. On the back of this success it is looking to expand both in Brazi, as well as in the region.

Natura currently has around 350,000 consultants selling its products door-to-door, a figure that increased by around 20 per cent during the past couple of years. Likewise this is forming a significant part of both increasing economic independence of women in the country as well as the increasing use of cosmetic products.

Looking to the future Abihpec estimates that the industry's growth will edge off slightly in 2005, coming in at around 14 per cent. This figure still compares favourably to general industry growth in the country, which is estimated to run at an average of 7 per cent.

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