BEAUTY NEWS FROM BRAZIL
Brazil’s beauty and personal-care sector is the latest victim of a recession that’s dragging down most industries in Latin America’s biggest economy. After more than 20 years growing at an annual pace of 13 percent on average and weathering crises and downturns, sales of cosmetics and personal-care products fell 6 percent in 2015, according to Abihpec, Brazil’s cosmetics and personal hygiene association.
Analysts expect 2016 to be tough, too. Over the past year, the beauty sector’s vigor has sagged under the weight of inflation that’s running above 10 percent a month, rising unemployment, higher taxes on cosmetics and a weakening currency that makes imported products prohibitively expensive. Even a drought that led several Brazilian regions to adopt water-rationing measures in the past two years hit the beauty sector: Brazilians, world-champion shower-takers with 12 showers a week on average, started bathing less, leading to a considerable drop in sales of soap, shampoo, conditioner and other hair-care products.
“For years the beauty and personal-care industry seemed bulletproof, immune to whatever problems we had in the economy,” says João Carlos Basilio, president of Abihpec. “But the recession we are experiencing now is truly disastrous. We are going to have some very challenging years ahead of us.”
The beauty segment has been one of the most resilient in Brazil’s economy because consumers of all social classes love cosmetics, especially hair care and fragrances. Fueling this growth are more than 40 million consumers who have emerged into a new middle class since 2004.
Hair care is still the strongest segment, and direct sales are still strong, too. Despite the economic downturn, some segments remain hot. Sales of dermocosmetics such as L’Oréal’s La Roche-Posay and Vichy brands, for example, have been rising at around 20 percent a year, according to Abihpec, and are likely to keep growing.
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