Cosmetics in Brazil Investment and VC Movements Analysis¶
Investment and VC Movements¶
The Brazilian cosmetics industry has experienced notable corporate venture capital (CVC) and major corporate investment movements in 2024 and early 2025, reflecting strategic plays by key market participants to enhance capabilities, expand reach, and innovate across the value chain. These movements occur within a dynamic market projected for continued growth.
A significant development in the corporate venture capital space was Natura &Co's launch of Natura Ventures in June 2024. This corporate venture capital arm, managed in partnership with Brazilian impact investment firm Vox Capital, is equipped with an initial capital of R$50 million for the first three years. Natura Ventures intends to invest in up to 15 seed-stage startups, primarily in Brazil, focusing on areas such as the circular economy, beauty technology, and customer service technology. This move signifies Natura &Co's strategic intent to leverage external innovation to fuel its future growth and support its innovation strategies, particularly within the socio-bioeconomy framework and the integration of Natura and Avon in Latin America.
Major corporate investment in expanding physical and operational capacity has also been prominent. Grupo Boticário announced a substantial investment plan of R$4.14 billion for industrial and logistics expansion between 2024 and 2028. [Strategic Priorities Analysis] This includes the construction of a new factory in Minas Gerais with an investment of R$1.8 billion, set to begin in 2024 and be operational by 2028, increasing production capacity by 50%. [Strategic Priorities Analysis] The plan also allocates R$840 million for expanding the Paraná factory and R$700 million for logistics expansion by 2027 to improve distribution across Brazil. [Strategic Priorities Analysis] Additionally, R$800 million is being invested in the Bahia factory in 2024 to reach maximum capacity. [Strategic Priorities Analysis] These investments are strategically aligned with supporting Grupo Boticário's multi-channel growth and enhancing operational efficiency. [Strategic Priorities Analysis]
Beyond direct corporate expansion, strategic acquisitions and investments by private equity firms and other companies have also shaped the landscape. In February 2024, Advent International acquired a majority stake in Skala Cosméticos, a prominent Brazilian haircare company. [M&A Analysis] This investment is aimed at accelerating Skala's growth both domestically and internationally through expanded manufacturing and distribution, operational improvements, and fostering innovation. [M&A Analysis, Strategic Priorities Analysis]
Another key M&A activity in the Brazilian market is the acquisition of Jequiti by the pharmaceutical company Cimed, a deal expected to close in 2024 for approximately R$450 million. [M&A Analysis] This acquisition represents Cimed's strategic entry into the cosmetics and direct sales market and is intended to leverage Cimed's strong distribution network, particularly in the pharmacy channel, and expand Jequiti's product portfolio and physical retail presence. [M&A Analysis, Strategic Priorities Analysis]
Globally, multinational players with significant Brazilian operations have also made strategic moves with potential local impact. Unilever completed the acquisition of the sustainable deodorant brand Wild in April 2025, aligning with the increasing demand for sustainable personal care products globally and in Brazil. [M&A Analysis] While not solely focused on Brazil, such global portfolio adjustments influence the strategic direction and product offerings within the Brazilian market. Similarly, Leste Group's acquisition of a significant stake in Prestige Cosmetics, a distributor of luxury perfumes and cosmetics in Brazil in February 2024, indicates investment in strengthening distribution capabilities within the country. The acquisition of IFF's Cosmetic Ingredients business by Clariant in April 2024, while a global transaction, impacts the sourcing stage of the value chain for companies utilizing these ingredients, including those in Brazil.
Furthermore, ongoing regulatory developments in Brazil's life sciences sector, including new regulations for cosmetics regarding cosmetovigilance coming into effect in August 2025, highlight the evolving operational landscape that companies must navigate, influencing investment decisions related to compliance and quality control.
Impact of these Investments¶
These corporate venture capital initiatives, major investments, and M&A movements have a significant impact on various stages of the Brazilian cosmetics value chain:
| Value Chain Step | Impact of Investment and VC Movements | Supporting Investment/VC/M&A Examples |
|---|---|---|
| Research and Development (R&D) | Increased focus on innovation, particularly in areas like circular economy, beauty technology, and leveraging biodiversity. Integration of R&D capabilities and expertise through M&A. Potential for accelerated development of new formulations and sustainable products. [M&A Analysis] | Natura Ventures (investing in beauty tech and circular economy startups). Advent/Skala (acceleration of innovation). [M&A Analysis] Unilever/Wild (access to R&D for sustainable products). [M&A Analysis] Natura &Co (Avon Global Innovation Center moved to Brazil). [M&A Analysis] |
| Sourcing and Production of Raw Materials and Packaging | Expansion of manufacturing capacity to meet growing demand. [Strategic Priorities Analysis] Potential for optimized production processes. Influence on sourcing strategies with increased focus on sustainable and specific ingredient profiles. [M&A Analysis] | Grupo Boticário's new factory and expansions (increased production capacity). [Strategic Priorities Analysis] GEKA's facility expansion in Brazil (increased capacity). Advent/Skala (expansion of manufacturing). [M&A Analysis] Clariant acquiring IFF's Cosmetic Ingredients business (impact on ingredient sourcing). |
| Manufacturing/Production | Significant increase in overall production volume capability within the country. [Strategic Priorities Analysis] Adoption of new technologies and streamlined processes in manufacturing facilities. | Grupo Boticário's new factory and expansions. [Strategic Priorities Analysis] GEKA's facility expansion (adding assembly line, molding machines). Advent/Skala (operational excellence). [Strategic Priorities Analysis] |
| Logistics and Distribution | Strengthening and expansion of distribution networks, improving reach across Brazil's vast territory. [Strategic Priorities Analysis] Enhanced logistics infrastructure and efficiency through dedicated investments. [Strategic Priorities Analysis] Leveraging existing distribution channels of acquired companies. [M&A Analysis] | Grupo Boticário's logistics expansion. [Strategic Priorities Analysis] Cimed/Jequiti (leveraging Cimed's distribution network). [M&A Analysis] Leste Group/Prestige Cosmetics (expanding distribution capabilities). GEKA's facility expansion (bringing warehousing in-house). |
| Marketing and Sales | Increased market presence and brand visibility for acquired companies or through expanded capacity. [M&A Analysis] Potential for cross-selling opportunities and targeting new customer segments. [M&A Analysis] Focus on leveraging technology for enhanced customer experience and digital sales. | Advent/Skala (increased brand presence). [M&A Analysis] Cimed/Jequiti (expansion of Jequiti's portfolio and reach). [M&A Analysis] Natura Ventures (investing in customer service technology). |
| Retail and Direct Sales | Expansion into new sales channels, such as increased physical retail presence. [M&A Analysis] Strengthening of existing direct sales or retail networks through increased product availability and potentially enhanced support. [M&A Analysis] | Cimed/Jequiti (expansion into physical retail). [M&A Analysis] Advent/Skala (expansion of distribution). [M&A Analysis] |
| Post-Consumer | Potential for increased investment in sustainable packaging and reverse logistics initiatives, particularly driven by CVC investments in circular economy or strategic focus of acquiring companies. | Natura Ventures (investing in circular economy startups). Unilever/Wild (focus on sustainability). [M&A Analysis] |
These investment and M&A activities collectively indicate a dynamic period in the Brazilian cosmetics industry, with major players strategically investing in innovation, capacity expansion, and channel optimization to capitalize on market opportunities and navigate the competitive landscape.
References¶
- VCWire
- Mattos Filho
- Cosmetics Business
- Global Cosmetics News
- Beautycare Brazil
- Brazil Cosmetics Market Size & Outlook, 2023-2030
- CDI Global Highlights RGS's 2024 M&A Brazil Report, News / Insights
- EC Mergers & Acquisitions
- Beauty Independent | The Bullish Outlook for Beauty M&A and Bearish Prospects for Early-Stage Funding This Year - Lincoln International LLC
- Initial Context (provided in the prompt).
- Advent International Announces Strategic Investment in Skala Cosméticos.
- Com investimentos de R$ 4,1 bilhões, Grupo Boticário anuncia nova fábrica em Minas Gerais, expansão da operação logística e industrial - Grupo Boticário.
- Strategy - Natura &Co Annual Report 2024.
- L'Oréal targets growth opportunity in Brazil with research and innovation investment.
- Advent International Invests in Skala Cosméticos | Global Cosmetic Industry.
- Cimed avança na compra da Jequiti — e quer 100% da empresa de cosméticos | Exame.
- Por que a Cimed está disposta a pagar R$ 450 milhões pela Jequiti - Exame.
- Natura &Co Reports Q4 and FY 2024 Financial Results - Direct Selling News.