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Founded in 1969
HQ in Sao Paulo State, Brazil
7,000 employees + over 1.9 million consultants worldwide
2016 turnover: USD 2.4 billion
3% of net revenue spent in R&D
Purchased the Body Shop for more than USD 1 billion in June 2017
Brazilian bio-economy - a force for good and bad
Over 89% of Brazil's area is covered with vegetation and plant life, with land use varying from large-scale agriculture to native forests. Over the last four decades the country has transformed itself from a net food importer to one of the world’s largest food exporters. A large proportion of Brazil’s economy relies on the output of two very valuable assets: its agricultural land and incredible biodiversity. The bio-economy sector is also significant from a social standpoint - about 20% of the workforce rely on agriculture for their livelihoods.
While Brazil's bioeconomy has flourished in certain ways, it has also led to many harmful externalities, both social and environmental. Local communities are abused by 'atravessadores', so-called middle-men in charge of acquiring raw materials at the lowest price possible. As commodity competitiveness increases, the threat of lucrative illegal logging grows, driven not only by potential timber revenues but also to yield space for cattle farming and agriculture plantations. In the past four decades, the equivalent area of California has been deforested, representing a devastating threat across many levels - regional water resources, biodiversity losses, indigenous knowledge and the wider global climate.
Responding to this, in 2011 Natura developed an inclusive business model for a range of its products that leverages traditional community knowledge to put into practice the valorisation of biodiversity assets whilst preserving natural capital.
The value of natural assets and community knowledge
The rich biodiversity of the Amazon represents Natura's main source of innovation and materials. The company philosophy is built on the concept of ‘floresta em pé’ (literally “standing” or “living forest”) and is designed to echo the regenerative cycles of the forest.
An illustration of Natura's approach can be found in the use of the species virola sebifera (pictured), also known as the red ucuuba, a tree found in Brazil's savannahs and evergreen forests. Natura had identified through their research in natural assets that the oil from the ucuuba nut is used by local people due to its therapeutic qualities.
Combining this 'bio-intelligence' (traditional community knowledge), with Natura's logistics and factory infrastructure, which enables the conversion of natural active ingredients into valuable cosmetic products; as well as business and marketing experience in making these types of products profitable, has led to numerous positive effects.
There are financial, social and environmental benefits to this activity. Natura has a brand new revenue-generating product line; long-term sustainable employment has been generated for more than 2000 families and the risk of the ucuuba tree being made extinct through timber felling has been decreased.
The key to the reduction in deforestation? Natura's simple but clear demonstration to local communities that trees are three times more valuable standing up, rather than being cut down.
- Revealing economic incentives to avoid deforestation: keeping forests alive allows for continuous value creation, as opposed to one-shot logging activities
- Sustainable, long-term employment for local communities under fair trade terms
- Sourcing unique products in the Amazon forest, looking for the best properties, gives a competitive advantage to Natura
Natura plans to enlarge its 'floresta em pé' to source 30% of all their raw materials from the Amazon rainforest by 2020. It also seeks to generate R$1 billion of revenue in the region by 2020.