Responsible for the Brazilian branch of the group L’Orealthe world’s largest cosmetics manufacturer, Marcelo Zimet celebrates achievements and faces challenges. Under the company’s first-ever management by a Brazilian, which began in April 2021 in its 63-year position in the country, revenue grew 18%, tripling the market average. The company does not disclose detailed data, but it is estimated that the subsidiary accounted for 70% of sales in Latin America, which recorded 1.7 billion euros in 2021. Even so, it’s a highly competitive market with two competing aggressive national brands, Natura and Boticário. In addition to heavy business disputes, the beauty industry also has a complex landscape involving issues of racial affirmation, gender, and environmental activism. Zimet, 47, spoke to VEJA from his office in Rio de Janeiro’s port area about the French giant’s difficulties in the country.
Brazil has a racially diverse population and is experiencing a moment marked by a radical overhaul of beauty standards. How will this meet the interests of the consumer profile? We are an open air laboratory. From the perspective of the cosmetics industry, here we have, for example, eighty-eight hair types and 55 skin tones cataloged by our world-class scientists. So they say that if a formula works for Brazil, it will probably be very successful globally. We are currently working in-depth to get to know our Brazilian consumers and develop increasingly specific products while respecting the identity of each of our brands.
How is the local consumption model compared to other countries? Brazil is the world’s fourth largest market for beauty products, after only the United States, China and Japan. Brazilian women use an average of five hair products a day, while French women use three in comparison. Over the past few years, we’ve launched products specifically for these women. On the other hand, less than half of the Brazilian population uses skin care products, including the most basic ones. Therefore, we tried to better understand the needs of such consumers.
In the past, the cosmetic industries were responsible for reinforcing the stereotypes about beauty standards that are questioned today. How did the transition to a more inclusive business model take place? There is no longer a global beauty model. I lived abroad for a long time and was very positively surprised when I returned to Brazil. Women took on their identity by freeing themselves from straight, blonde hair. The last five years have seen significant changes in the profile of Brazilian women: curly hair has come to the fore. We have improved a lot in recent years by offering make-up, skin and hair products to a wider consumer base, and this transformation will intensify in the coming years.
“There is no longer a global standard of beauty. Brazilian women took on their identity by freeing themselves from straight and blonde hair. Curly hair stood out”
Many companies sell themselves as diverse and inclusive, but in practice this change is very difficult to justify. How can we be sure that these actions are not just speech? Gender diversity and racial diversity are gaining more and more importance in organizations. We recognize that working with diversity brings tremendous value and translates into better outcomes. Therefore, the first point is to recognize that diversity is not just a matter of raising a case, but a more modern and dynamic way of working. Of our 3,000 employees, 13% self-proclaimed LGBTQIA+, 33.4% black – 49% of our hires in 2021 alone were black professionals. And our goal of racial representation is to reach 30% of black leaders by 2025.
One of L’Oréal’s brands in France was run by a transgender manager a few years ago. Does the company have trans employees in Brazil? Yes. We are partnering with TransEmpregos and CIEE to increase the representation of trans people in our workforce. We have affinity networks within the company, among them Prisma, 75 people working to promote the LGBTQIA+ agenda at the company and welcoming community members. It is our policy not to discriminate against gender identity or sexual orientation in our selection processes. We also invest in educational activities and actions to combat LGBTphobia throughout the year. We understand that it is our duty to provide an inclusive work environment and advertising campaigns – this means ensuring that all gender identities and sexual orientations are represented and respected.
And as for the products, are they also exclusive to this audience? None of our products are intended for a particular genre. Beauty has no gender. Obviously, some communication campaigns direct the product to the target audience, but in the digital universe nowadays language can be for everyone. Communication loses this differentiation character and product elaboration no longer has this focus.
How do you evaluate the beauty market competition in Brazil? Here we have two major national beauty and cosmetics companies, a feature not found in other countries where the group operates. Natura and Boticário are very powerful and it takes us out of any comfort zone.
Did the pandemic and isolation affect the consumption habits of beauty products? With the isolation, people have had more time to take care of themselves and we have observed an increase in the consumption of beauty products during this period. We have four divisions of labor with different focuses and price ranges, and despite socioeconomic constraints, consumption continued, albeit with a small migration from one category to another. Some skin and hair care categories saw a large increase, but a significant decrease was seen in the cosmetics category, such as makeup.
How do you deal with testing products on animals, which is a critical point in the beauty industry? The company has not tested on animals since 1989. Today we have a variety of technologies for evaluating products, such as the first artificial human skin created in the lab. We also have digital models that can be used to test new formulas. Today we no longer need animal testing.
But it’s still done in some countries, right? Yes, there are governments that still need it. This is not an industry issue, but a government issue, for example in China, where animal testing is still provided by law. Some governments still do, but they are not carried out by industry.
And have tests on faux fur shown to be safe? super fuse Artificial skin, just like human skin. It can be used even in burn cases. In these tissues developed by bioengineering, possible skin reactions on contact with different topical products are simulated. This product is even used in our Research and Innovation Center in Rio de Janeiro, Brazil.
It is known that more than 10,000 chemicals that are harmful to the environment are used in the production of traditional cosmetics. What has the company done to reduce this impact? We are accelerating our sustainable innovation system for more natural beauty. By 2030, 95% of the ingredients used in our formulas will be derived from renewable plant sources, abundant minerals or circular processes, and 100% of our formulas will respect the aquatic environment. Today, 92% of products launched or refurbished by the company in Brazil have improved their environmental profile. We also achieved an average of 91% biodegradability in shampoos and conditioners.
“We no longer need animal testing today. “For example, we created the first artificial leather and digital models that can be used to analyze products.”
Some countries already ban the use of plastic, and some companies have decided to eliminate the material. Has this discussion progressed at L’Oréal? Switching to recycled and recyclable packaging is a priority for us. The goal is for 100% of the plastic used by 2030 to come from recycled sources. In addition to this commitment, 100% of organic-sourced ingredients in formulas and packaging materials will be traceable and sustainably sourced. None of these components will be linked to deforestation.
How did inflation affect the hygiene and beauty category? Inflation has an indirect effect on costs. What we do is try not to pass them on to consumers. There are several internal efficiency projects to improve operating costs, but there comes a time when the company can’t take it back. Inflation also affects consumption. We started to see this as a number, and even in cases where there is no transfer to prices in recent months, the volume decreases.
Is the country’s economic environment worrying? We are more concerned with winning over consumers and gaining market share, rather than justifying the lack of growth on external or macroeconomic reasons. But of course we are also aware of the social impacts on consumers.
What will the exchange rate be? We import very few products from abroad. Almost 90% of the volume sold is produced in our factory in Brazil and 80% of the suppliers are local. Some raw materials are commodities so they have exchange rate and inflation effects, but we are not a big importer.
What economic agenda do you expect for the next few years? It is necessary to have a clear vision of where the country wants to go and how to get there. A simplification agenda is also important, along with fundamental reforms such as tax reform. And there is the social part that still has alarming unemployment rates today. You need to focus on people.
Published in VEJA, May 18, 2022, issue 2789