Head of the Brazilian branch of the group L’Orealthe world’s largest cosmetics manufacturer, Marcelo Zimet celebrate achievements and face challenges. Under his management, which began in April 2021, the first by a Brazilian in the company’s 63-year position in the country, revenues grew by 18%, three times the market average. The company does not disclose detailed data, but the subsidiary is estimated to account for 70% of sales in Latin America, which recorded 1.7 billion euros in 2021. Even so, it is an extremely competitive market, with two competing brands. aggressive nationals, Natura and Boticario. In addition to heavy trade disputes, the beauty industry also navigates a complex landscape involving issues of racial affirmation, gender, and environmental activism. From his office in the port region of Rio de Janeiro, Zimet, 47, spoke with VEJA about the French giant’s challenges for the country.
Brazil has a very racially diverse population and is experiencing a time marked by a profound revision of beauty standards. How is it satisfying the interests of this consumer profile? We are an open-air laboratory. From the point of view of the cosmetics industry, we have here, for example, eight hair types and 55 skin tones, among the sixty cataloged by our scientists around the world. That’s why they say that if a formula works for Brazil, it will likely be very successful globally. Currently, we carry out in-depth work to get to know our Brazilian consumers and develop ever more specific products, respecting the identity of each of our brands.
How is the local consumption pattern compared to other countries? Brazil is the fourth largest market in the world for beauty products, behind only the United States, China and Japan. Brazilian women use, on average, five hair products a day, while French women, in comparison, use three. In recent years we have launched specific products for these women. On the other hand, less than half of the Brazilian population uses skin care products, including the most basic ones. This is why we have tried to better understand the needs of this type of consumer.
In the past, the cosmetic industries were precisely responsible for reinforcing stereotypes of beauty standards that are now questioned. How has the transition to a more inclusive business model been achieved? There is no longer a global model of beauty. I have lived abroad for a long time and when I returned to Brazil I had a very positive surprise. Women got rid of straight blonde hair and took on their identity. The past five years have shown significant changes in the profile of Brazilian women: curly hair has gained prominence. We have evolved a lot in recent years with offering makeup and skin and hair products targeting a wider range of consumers, and this transformation will intensify even more in the coming years.
“There is no longer a global standard of beauty. Brazilian women got rid of straight blond hair and took on their identity. Curly hair has gained importance “
Many companies sell themselves as diverse and inclusive, but in practice it is very difficult to verify this change. How can we ensure that these actions are not just talk? Gender diversity and racial diversity are increasingly relevant in organizations. We understand that working with diversity brings tremendous value and results in better results. So, the first point is to recognize that diversity is not just a matter of raising a cause, but a more modern and dynamic way of working. Of our 3,000 workers, 13% are self-reported LGBTQIA +, 33.4% are black – in 2021 alone, 49% of our hires came from black professionals. And our racial representation goal is to reach 30% of black leaders by 2025.
L’Oréal had a transgender executive a few years ago at the helm of one of its brands in France. Does the company have trans employees in Brazil? Yes. We work in partnership with TransEmpregos and CIEE to increase the representation of trans people in our workforce. We have affinity networks within the company and among these is Prisma, with 75 people trying to promote the LGBTQIA + agenda in the company, welcoming community members. In our selection processes, it is our policy not to make any distinction of gender identity or sexual orientation. In addition, we invest throughout the year in educational actions and actions to combat LGBT phobia. We understand that it is our role to provide an inclusive work environment and advertising campaigns, which means ensuring representation and respect for all gender identities and sexual orientations.
And what about the products, are they also specific to this audience? None of our products are for a specific gender. Beauty has no gender. Obviously some communication campaigns address the product to a reference target, but in the digital universe today, language can be for everyone. Communication has lost this character of differentiation and product development no longer has this focus.
How do you assess the competition for the beauty market in Brazil? Here we have two large national beauty and cosmetics companies, a peculiarity that does not happen in the other countries where the group operates. Natura and Boticário are very strong and this takes us out of any kind of comfort zone.
Have the pandemic and isolation affected the consumption habits of beauty products? With isolation, people have had more time to take care of themselves, so we’ve seen an increase in the consumption of beauty products around this time. We have four business divisions with different focus and price ranges and, albeit with socio-economic limitations, consumption continued, albeit with a small migration from one category to another. Some categories for skin and hair care have seen a huge increase, but the category of cosmetics such as makeup, for example, has seen a significant decline.
How do you approach the issue of testing products on animals, a critical point in the beauty sector? The company has not tested on animals since 1989. Today, we have several technologies for evaluating products, such as the first artificial human skin created in the laboratory. We also have digital models that can be used to test new formulas. Today we no longer need animal testing.
But in some countries they are still carried out, right? Yes, there are governments that still require it. It is not a sector issue, it is a government issue, such as in China, where animal testing is still required by law. Some governments still do this, but it is not carried out by the industry.
And have the tests on faux fur proved to be safe? Super insurance Artificial leather looks just like human skin. It can also be used in case of burns. In these bioengineered tissues, possible skin reactions in contact with different topical products are simulated. This product is also used in Brazil in our Research and Innovation Center, located in Rio de Janeiro.
It is known that the production of conventional cosmetics uses about more than 10,000 chemicals that are harmful to the environment. What has the company done to mitigate 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 the products launched or refurbished by the company in Brazil have had an improved environmental profile. In addition, we achieved an average biodegradability of 91% in shampoos and conditioners.
“Today we no longer need animal testing. For example, we have created the first artificial leather and digital models that can be used to analyze products “
Some countries already ban the use of plastics, and some companies have already decided to phase out the material. Has this discussion advanced at L’Oréal? It is a priority for us to migrate to recycled and recyclable packaging. The goal is that by 2030, 100% of the plastic used will come from recycled sources. In addition to this commitment, 100% of the ingredients of organic origin, included in the formulas and packaging materials, will be traceable and sourced from sustainable sources. None of these ingredients will be linked to forest deforestation.
How was the effect of inflation on the hygiene and beauty category? Inflation has an indirect impact on costs. What we are doing is trying 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 back down. And inflation also affects consumption. We have begun to see this in terms of the number of units, volume has been declining in recent months, even in situations where there have been no price transfers.
Is the country’s economic environment worrying? We are more concerned with winning over consumers and gaining market share than with justifying the lack of growth on an external or macroeconomic basis. But, of course, we are aware of the social impacts on consumers.
And the exchange rate? We import few products from abroad. Virtually 90% of the volume sold is produced in our factory in Brazil and 80% of the suppliers are local. Some commodities are commodities, so there are exchange rates and inflation impacts, but we are not a large importer.
What kind of economic agenda do you expect for the next few years? You need to have a clear vision of where the country wants to go and how to get there. A simplification agenda is also important, with fundamental reforms, such as the fiscal one. And there is still the social part, which today has worrying unemployment rates. You have to focus on people.
Published in VEJA dated May 18, 2022, issue 2789