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Aveda is ramping up its growth trajectory, and Latin America is a key part of the strategy.
The Estée Lauder Cos. Inc.-owned hair brand, which was acquired in 1997, has launched in Brazil and opened the Aveda Bioma Salon in Saõ Paulo, a partnership with local chain LACES.
The salon, which incorporates elements of sustainability throughout its buildout, is part of Lauder's strategy to incorporate renewable energy into its operations.
Though skin care is Lauder's powerhouse category at the moment (sales jumped 24 percent in the first quarter of fiscal 2020, to $1.8 billion, while hair was down 2 percent), the hair category, and in particular the Aveda brand, is set to play an integral role in the company's Latin America expansion, said Daniel Rachmanis, Latin America president.
Aveda launched in Latin America in the summer of 2018 and is in 19 salons, 13 Sephora doors and 13 department stores in Mexico. It is the fastest-growing hair-care brand in Mexico, according to data from The NPD Group in September.
In Brazil, Aveda made its debut last month with e-tailer Slow Beauty, and with its concept salon Bioma. The salon was designed with a "creative collective" that included plastic artists, designers, architects and sustainability specialists. It is designed to be as energy-efficient as possible, self-producing 30 percent of its energy consumption. Water used for hair washing is heated through solar panels that also generate electricity for the store, and the water treatment system is based on inverse osmosis, enabling the store to collect and clean rainwater for hair washing.
Rachmanis is looking to emulate for other Lauder brands the Latin America trajectory of MAC Cosmetics, which launched in Brazil 17 years ago and is now in more than 80 doors and said to be the top prestige makeup brand in the country. Jo Malone, which launched in Brazil in 2016, is said to be showing strong growth in the country as well.
"We aim to be leaders in the prestige segment ," said Rachmanis, who noted there is a lot of untapped opportunity in the market for prestige brands in Latin America, where the prestige market is much smaller, but growing twice as fast as mass. The hair-care market in Brazil is one of the largest global hair markets, expected to grow to $6.4 billion by 2023, according to Euromonitor. Rachmanis plans to slowly expand retail distribution for Aveda in Brazil over the next two years. "Aveda perfectly suits what the Brazilian and Latin America consumer want," said Rachmanis. "Besides natural shampoo, conditioner and treatments, we bring a very specific point of view on color — we are the to offer high-pigment coloration from naturally derived ingredients."
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