Responsible for the Brazilian branch of the group L’Orealthe world’s largest cosmetics manufacturer, Marcelo Zimet celebrates achievements and faces challenges. Under his leadership, which began in April 2021, as the first Brazilian in this position in the company, over 63 years in the country, revenue grew by 18%, which is three times the market average. The company does not disclose details, but the subsidiary is estimated to account for 70% of sales in Latin America, which totaled 1.7 billion euros in 2021. Despite this, it is an extremely competitive market with two aggressive national brands. Natura and Boticario. In addition to serious commercial disputes, the beauty industry also faces a complex landscape that includes issues of racial assertion, gender, and environmental activism. From his office in Rio de Janeiro’s waterfront district, Zimet, 47, spoke to VEJA about the French giant’s problems for the country.
Brazil has a very racially diverse population and is going through a moment marked by a profound rethinking of beauty standards. How to satisfy the interests of this consumer profile? We are an open air laboratory. In terms of the cosmetics industry, we have, 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 the formula works in Brazil, it’s likely to be very successful around the world. We are currently working in depth to get to know our Brazilian consumers and develop increasingly specific products while respecting the individuality of each of our brands.
What is the local consumption pattern compared to other countries? Brazil is the fourth largest beauty market in the world, behind only the US, China and Japan. Brazilian women use an average of five hair products per day, while French women, by comparison, use three. Over the past few years, we have 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. That is why we have sought to better understand the needs of this type of consumer.
The cosmetics industry has been responsible in the past for reinforcing stereotypes about beauty standards that are being questioned today. How was the transition to a more inclusive business model made? There is no longer a global model of beauty. I lived abroad for a long time and when I returned to Brazil I was very pleasantly surprised. Women freed themselves from straight blond hair and took on their own identity. Over the past five years, the image of Brazilian women has undergone significant changes: curly hair has become noticeable. We have changed a lot in recent years, offering cosmetics, skin care and hair care products aimed at a wider range of consumers, and in the coming years this transformation will intensify even more.
“There is no longer a global beauty standard. Brazilian women freed themselves from straight and blond hair and embraced their own identity. Curly hair is famous
Many companies position themselves as diverse and inclusive, but in practice it is very difficult to test this change. How can we ensure that these actions are not just speeches? Gender diversity and racial diversity are becoming increasingly relevant in organizations. We understand that working with diversity brings great benefits and leads to better results. So, first of all, we need to recognize that diversity is not just a matter of raising the motive, but a more modern and dynamic way of working. Among our 3,000 employees, 13% are self-described LGBTQIA+, 33.4% are black—in 2021 alone, 49% of our employees were black professionals. And our goal of racial representation is to reach 30% black leaders by 2025.
A few years ago, L’Oréal had a transgender executive who ran one of its brands in France. Does the company have transgender employees in Brazil? Yes. We are working in partnership with TransEmpregos and CIEE to increase the representation of transgender people in our workforce. We have partner networks within the company and among them is Prisma, in which 75 people strive to promote the LGBTQIA+ program in the company, welcoming community members. We have a policy of not making any distinction based on gender identity or sexual orientation in our selection processes. In addition, we also invest throughout the year in educational and anti-LGBT phobia campaigns. We understand that our role is to ensure an inclusive work environment and advertising campaigns, which means ensuring that all gender identities and sexual orientations are represented and respected.
As for the products, are they also specific to this audience? None of our products are designed for a specific genre. Beauty has no gender. Obviously, some communication campaigns direct the product to the target audience, but in the digital universe, language can be for everyone today. Communication is losing this character of differentiation, and product development no longer has that focus.
How do you assess the competition in the beauty market in Brazil? Here we have two large national cosmetics and beauty companies, which is not typical for other countries in which the group operates. Natura and Boticário are very strong and it takes us out of any comfort zone.
Have the pandemic and lockdown affected beauty consumption habits? With the lockdown, people have more time to take care of themselves, which is why we have seen an increase in the consumption of beauty products during this period. We have four business divisions with different focus and price ranges, and even with socio-economic constraints, consumption continues, albeit with little migration from one category to another. Some skin and hair care categories saw significant growth, but the cosmetics category, such as makeup, for example, saw significant declines.
How do you feel about animal testing, a critical point in the beauty industry? The company has not conducted animal testing since 1989. Today, we have several technologies for evaluating products, such as the first artificial human skin created in a laboratory. We also have digital models that can be used to test new formulas. Today, we no longer have the need for animal testing.
But in some countries they are still carried out, right? Yes, there are governments that still require it. It’s not an industry issue, it’s a government issue, like in China, where animal testing is still legal. Some governments still do this, but they are not followed by the industry.
Have tests on faux fur proven to be safe? Super insurance Faux leather looks just like human skin. It can be used even for burns. These bioengineered tissues simulate possible skin reactions when in contact with various topical products. This product is even being used in Brazil at our Research and Innovation Center located in Rio de Janeiro.
About 10,000 environmentally harmful chemicals are known to be used in the production of conventional cosmetics. 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 come from renewable plant sources, abundant minerals or cycling processes, and 100% of our formulas will be aquatic. To date, the environmental performance of 92% of the products launched or updated by the company in Brazil has been improved. In addition, we have achieved an average of 91% biodegradability in shampoos and conditioners.
“Today we no longer need animal testing. We have created, for example, the first artificial skin and digital models that can be used for product analysis.”
Some countries already ban the use of plastic, and some companies have already decided to phase out the material. Has this discussion moved forward at L’Oréal? A priority for us is the transition to recycled and recyclable packaging. The goal is to have 100% of the plastic used from recycled sources by 2030. In addition to this commitment, 100% organic ingredients included in formulations and packaging materials will be traceable and sustainable. None of these ingredients will be associated with deforestation.
How has inflation affected 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 reduce operating costs, but there comes a point where the company cannot hold back. Inflation affects consumption as well. We started to see this in the number of units, the volume has been falling in recent months, even in situations where there were no price transitions.
Does the economic situation in the country cause concern? We are more concerned with winning customers and increasing market share than we are with external or macroeconomic excuses for lack of growth. But of course we are aware of the social implications for consumers.
What about the exchange rate? We import some products from abroad. Nearly 90% of the volume sold comes from our factory in Brazil and 80% of the suppliers are local. Some raw materials are commodities, so there are exchange rate and inflation effects, but we are not a major importer.
What economic agenda do you expect for the next few years? It is necessary to have a clear idea of where the country wants to go and how to get there. The simplification program is also important with fundamental reforms such as tax reform. And then there is the social part, which today has an alarming unemployment rate. You need to focus on people.
Published in VEJA on May 18, 2022, No. 2789