An upsurge in well being well
Worthy of note in the quarter, Natura's entry into new product categories and the roll-out of the Natura Network in the state of São Paulo are the latest examples of the company's medium-term strategy, focused on boosting its value proposition
Just eight months elapsed between approval of the concept and the May roll out of the pilot stage of the Natura+ project, one of the company's main innovations in a quarter in which it posted consolidated net revenues of R$ 1.802 billion, 5.1% up on the same period last year.
Fully aligned with the organization's growth strategy for the coming years, focused on expanding the Natura value proposition (based on well being well) through new forms of relationship with consultants and consumers, new brands and new product categories, Natura+ comprises some 120 fashion and household products available through the Natura Network – a digital platform that moves relationship selling online.
The Natura+ portfolio has been developed by 15 partners chosen for their affinity with Natura's vision and way of doing business. “These are small and medium-sized entrepreneurs who develop creative, original proprietary products. Natura+ values diversity, local production and entrepreneurship”, states Maria Paula Fonseca, New Business director.
According to Maria Paula, the company is at present engaged in a learning process. “We intend to gradually increase the number of partners, and to do so we need to observe public acceptance of the product mix on offer, the profile of the consumer acquiring Natura+ products and the development of relations with our new partners”, she explains.
Expansion of Natura Network
Another highlight in the second quarter was the expansion of the Natura Network. After trials in Campinas (São Paulo) and São José dos Campos (São Paulo) in 2013, the network went live throughout São Paulo state at the beginning of July. The expectation is that the Natura Network will be extended to other regions in the country during the remainder of 2014.
Open to all consultants, the Natura Network enables NCs to sell via the two models: face-to-face and virtual. In parallel, a new consulting format was introduced, the Natura Digital Consultant, for those who prefer to work exclusively via the internet. According to the head of the Natura Network, José de Luca, in addition to refining technology solutions and operating processes, the trial period was necessary to understand how this new format would work in conjunction with the existing conventional direct selling model.
To scale up the project, a communication strategy was developed for the sales force. This involved emails and talks for consultants during Natura Encounters, as well as specific measures aimed at the sales managers and relationship managers who provide support for consultants.
In addition to the 5.1% increase in consolidated net revenues, Natura posted a net profit of R$ 175.8 million and EBITDA (profit before interest, tax, depreciation and amortization) of R$ 352.3 million, both down on the year ago quarter. See the company's complete 2nd quarter results, released on July 25.
To resume the pace of growth in the second half of the year, Natura will continue to pursue its medium-term strategy and invest in marketing, in new product launches and in measures to drive productivity in its consultant network.
Review of socio-environmental indicators
The main thrust of Natura's new Sustainability Vision, announced in April, is the generation of positive social, environmental and economic impacts for its entire relationship network rather than just reducing and offsetting the company's impacts.
To measure fulfillment of the commitments established in its new vision, Natura reviewed its quarterly indicators. The company now monitors and discloses the percentage of post-consumer recycled content in its packaging, the percentage of packaging material that is recyclable and the percentage of eco-efficient packaging* used. Natura continues to track indicators on emissions, water consumption, business volume generated in the Amazon region and the amount raised through its Believing is Seeing product line.
From now on, results will be linked with Natura's 2020 ambitions instead of with the company's annual commitments. The year-to-date figures are available here.
*For Natura, eco-efficient packs are those that represent a reduction of at least 50% in weight compared with a similar/regular pack; or which consist of 50% post-consumer recycled material and/or renewable material, as long as there is no increase in mass.