Compared to traditional names like Estée Lauder or younger incubators like Kendo, Natura & Co. is not your average beauty conglomerate. Devoted to sustainable and ethical business practices since its founding in 1969 — long before it was trendy — the company has also taken a slow and steady approach to its acquisitions, even amidst the recent M&A tear in the industry.
Although it first launched with Brazil’s top-selling beauty and personal care brand, Natura, it’s the company’s two other brands — The Body Shop and Aesop — that Americans are likely to be most familiar with. Natura purchased the former from L’Oréal in July of last year for roughly $1.2 billion, in a bid to ramp up its international presence. (The Body Shop has stores in 70 countries.) It acquired the Australia-born Aesop, known for its hip, minimalist aesthetic, in 2012.
Taken together, the brands operate in 70 countries, have 18,000 employees and 3,200 stores and are worth $6 billion. While significant, that’s still smaller than its competitors like L’Oréal Group (worth $23.9 billion) and Estée Lauder Companies ($12 billion).
On the surface, the three brands couldn’t be more different: Natura thrives largely off of a direct-selling model in Brazil, The Body Shop is — at this point — a struggling mall brand, and Aesop is a cult, hipster favorite sold in boutiques and online stores like Need Supply. They operate independently of each other, too, using entirely separate manufacturers and production processes.
However, what they share, according to Roger Schmid, Natura & Co’s global advisor on sustainability and innovation, is a belief in corporate responsibility.
“What unites us is our shared values of sustainability and the concept of doing business for good,” he said, pointing to the brands’ collective community outreach and sustainable sourcing as examples.
Natura, for its part, became the largest company to receive B Corp certification in 2014, a testament to its environmental and social transparency. It’s long been devoted to maintaining the health and economy of the Amazon rainforest, opening sustainable factories there, sourcing many of its ingredients from the locals and reportedly conserving more than 632,000 acres of its land.
“If the Amazon goes broke, we all go broke,” said Schmid. “It’s a very crucial region of the world, and we often forget the importance of it.”
Anita Roddick, who founded The Body Shop in 1976, incorporated similar values into her brand, even if they’re lesser-known today. The company has long waged a war against animal testing and has a Bio Bridges program that protects against biodiversity loss, which can isolate and endanger animals.
“We just have to make sure that these stories are now being told in the right way,” said Schmid, who added that the brand will undergo a reinvention of sorts in the next year, the details of which are still being finalized.
Aesop’s contribution in this area is less overt, though it does privilege plant-based materials and take a less-is-more approach to product launches. Sustainable store design — or, reworking spaces that are already there — is also a core tenet of the brand.
“Aesop has always been a frugal, minimalist company,” said Schmid, “but they’re not vocal about it because that’s not really their message. They’re more about elegant simplicity and design.”
Unsurprisingly, Aesop is also the least media-friendly of the brands and what Schmid described as the most independent. “It has a very strong culture of its own.”
The goal right now is to bring some of that strength to both The Body Shop and Natura, at least as far as its brand recognition in the United States goes. All plans are being led by what the company is calling its Group Operating Committee, a body of executives from all three brands that’s helmed by the three respective CEOs: David Boynton (The Body Shop), Joao Paulo Ferreira (Natura) and Michael O’Keeffe (Aesop).
While plans for The Body Shop are still mum, Natura’s American expansion, via its sub-brand NaturaBrasil, began in March of 2017 when it opened its U.S. flagship store in New York City’s NoLita neighborhood. This January, it built off of that with a store in New Jersey’s largest mall, Westfield Garden State Plaza.
Schmid is cautiously optimistic: “I think it’s going to take some time to build [brand] recognition, but we’re not in any rush. We know how competitive this market is.”
The rest of the year will be dedicating to continued learning from those stores, as well as absorbing and reshaping The Body Shop, he said. There are no plans to acquire more brands anytime soon.
“We take it very steadily and strategically,” said Schmid, noting that other companies often make acquisitions to make up for their own lack of innovation, or for financial reasons. The current rush to scoop up young, buzzy brands like Too Faced and Hourglass Cosmetics doesn’t phase him. “[Rather than newness], it’s about whether or not there’s a cultural fit. We’re not looking every week just to see who’s available.”