Natura is a Brazilian cosmetics company with $2.1 billion in annual sales and over 1 million consultants. It has a sustainable supply chain focused on biodiversity and community development. Key aspects include sourcing from over 200 suppliers in Brazil and benefiting over 2,000 families, investing $30 million annually in social responsibility programs, and having carbon neutral operations. Natura's sustainable approach to its supply chain helps drive its success while creating social and environmental value.

1. Responsible
Supply Chain
João Paulo Ferreira
Supply Chain Vice President

2. Who is
Natura?

3. Sales
net sales of US$ 2.1 billion
EBITDA
23,8%
CAGR (2005 – 2009)
18%
Market share - CFT
22.2% market share in Brazil
Direct Sales
1,034,000 consultants
Employees
6260 employees in 8 countries
Investments in R&D
Highlights
US$ 59 million
Investments in Corporate Social Responsibility
US$ 30 million
Consumers
50 million consumers
Brand strength
4th most valued brand in BOVESPA
14th most valued brand in Latin America
(Interbrand)

4. reason for being
to create and sell products
and services that promote
well-being/being well
well-being
is the harmonious, pleasant
relationship of a person with
oneself, with one’s body
being well
is the empathetic, successful,
and gratifying relationship
of a person with others, with
nature and with the whole.
“The secret is working with inventory, to avoid
losing the magic moment when the person tries
the product and falls in love with it.”
Ildnéia Cano (left) is a Natura Consultant in Júlia
Cunha’s (Sales Promoter, right) team.

5. vision
Through its corporate behavior, the quality
of the relationships it establishes and the quality
of its products and services, Natura will be an
international brand identified with the community
of people who are committed to the construction
of a better world, based on a better relationship
with oneself, with others, with nature of which they
are part of, with the whole.
“The things I do for Natura are things I like doing and would do for
myself, because they have value, are genuine.”
Beto Von Poser, trained as an engineer, set designer by vocation, and
Natura supplier for 13 years

6. beliefs
life is a chain of relationships commitment to the truth
nothing in the universe exists alone is the route to perfecting the quality
everything is interdependent of relationships
it is our belief that the appreciation the greater the diversity,
of the importance of relationships the greater the wealth and vitality of the
is the foundation of an enormous whole system
human revolution in the search for
peace, solidarity and life in all the search for beauty,
of its manifestations which is the genuine aspiration of every
human being, must be free of preconceived
the continuous search for improvement ideas and manipulation.
promotes the development of
individuals,organizations, and society the company, a living organism,
is a dynamic set of relationships
its value and longevity are connected to its
ability to contribute to the evolution of
society and its sustainable development

7. differentiated value corporate
proposition behavior
essence
Transform social and
enviromental challenges into
business opportunities channel products
Delivery of
“Triple Bottom Line”
Economic Social Environmental
› Strong cash flow generation › Wealth creation to consultants › Carbon neutral company
› Attractive growth and › US$ 30 million invested in CSR › Utilization of refill packaging
profitability 1in 2009 › Sustainable extraction of raw
› Consistent dividend payments › Benefits extended to supplier materials
communities › Use of recycled and recyclable
1 Corporate and Social Responsibility
materials

8. channel

9. Channel strength
Available consultants (in thousand) Channels differentiations
High productivity1
Brazil International Total 2.2 times higher than its peers
1,034
875 850
731 719
632 +21.8%
Low Business model Training
turnover that generates 583,000
+19.8% consultants
159 36% on income and work
average trained
119
86
in 2009
+33.9%
2007 2008 2009 2007 2008 2009 2007 2008 2009
CAGR High satisfaction2
90% in 2009
› Consultants are Natura’s first consumers
› Drive sales through personal relationships
› Channels disseminate Natura's values with consultants acting as agents of social
transformation
› More than 1 million consultants in 2009
1 Source: Company, ABEVD (Brazilian Association of Direct Sales Companies)
2 HAY Consultant annual opinion poll for consultants satisfaction

10. products

11. Ekos
sustainable use
of biodiversity

12. Chronos
a truly beautiful
woman

13. Todo Dia
(every day)
caring for body
and mind

14. Mamãe e Bebê
(mom and baby)
the importance of
the bond between
parents and
their children

16. company
behavior

17. The Natura Value Chain
Mapping of all direct and indirect emissions of greenhouse gases
throughout the product lifecycle and our business chain.
1. Extraction and transportation of raw materials
and packaging (direct and indirect suppliers) 2. Industrial and administrative
processes
105,570 ton of CO2e (extraction and transportation of
raw materials and packaging)
14,767 ton of CO2e
23,606 ton of CO2e (co-makers)
43%
16%
Relative Emissions
(kg of CO2e/kg of product billed)
- 16,1%
3,95
3,82
3,63
24%
4. Use of products and 3. Product sales 18%
packaging discharge (transportation and distribution) 2007 2008 2009
Challenge: reduce GHG
57,873 ton of CO2e 43,980 ton of CO2e relative emissions by
33% over 5 years

18. The Natura Value Chain
Stage 1: Extraction and transportation of
raw materials and packaging (direct and
indirect suppliers) 43%
Related initiatives:
- Sustainable development program that
includes supplier communities (NGO’s,
Government). .
- Collaboration with government to
Key results in 2009:
establish new regulations for accessing
the Brazilian biodiversity.
Wealth distribution to suppliers:
US$ 1.4 billion – 8% growth
- Certification program for natural
ingredients (Forest Stewardship Council, Supplier satisfaction: 82%
Instituto Biodinâmico, Sustainable
Agriculture Network). Certified ingredients: 31
Use of vegetal material from
- Collaborative product redesign with renewable origin: 79.2%
suppliers for reduced LCA
- Vegetalization program and beyond.
(Ex.: organic alcohol)

19. The Natura Value Chain
Stage 2: Industrial and administrative
processes. 16%
Related initiatives:
Key results in 2009:
- Manufacturing plant in the Amazon
(Benevides – Pará) Distribution of wealth to employees:
US$ 321 million – 12% growth
- Use of PET with inclusion of 30%
Investments in innovation:
recycled resin.
US$ 59.4 million
- Eco-efficient energy and steam Water consumption:0.52 liter per unit sold
generation. (increase of 2% since 2007)
Energy consumption: 447.3 kjoule per
unit sold (reduction of 25% since 2007)
Generation of residues: 31.5 grams per
unit sold (reduction of 10% since 2007)

20. The Natura Value Chain
Stage 3: Sale of products
(transportation and distribution). 18%
Related initiatives:
Key results in 2009:
- Crer para Ver (Believing is Seeing)
Educational Program. Wealth distribution to consultants:
US$ 1.15 billion – 15% growth
- Natura Movement: reverse logistics, and Sales channel:
education towards citizenship (EJA). 1 million consultants – 18% growth
- Secondary pack optimization program Sales channel satisfaction: 88%
Product launches: 103 – 600 SKUs
Total collected on the Crer Para Ver
program:US$ 1.9 million

21. The Natura Value Chain
Stage 4: Use of products and discharge
of packages. 24%
Related initiatives:
- Use of refill.
- Product Lifecycle Analysis
(ACV).
Key results in 2009:
- Environmental Labelling.
Percentage of refills over sold items: 18,4%
Environmental impact per product
quantity:69.5 mPt/kg – (reduction of 5%
since 2007)

22. our supply chain

23. Direct Selling – Supply Chain
Post Sales
CAN, SNAC,
Suppliers Credit and Collection
> Ingredients from
biodiversity sustainably
extracted from
communities in the
forest;
Production CN Order Cycle
Plants 21 days sale cycles
> 66% of renewal for
products less than 2
years old
> 50% volume
promoted
Distribution
> Promotions > 1 million POD
leverage: 8-15x
Sorting
Picking
Cajamar & DCs

24. Our operations
France
Mexico
Colombia
Peru
Brazil
Bolivia
Argentina
Chile

25. Main numbers
› Manufacturing Plants: 4
› Hubs: 1
› Distribution Centers: 10
› Points of delivery: 1 million
› Units sold: 384 million
› SKUS: 1,200
› Kilometers traveled: 1.6 million
› Total orders/year: 12.8 million
› Employees: 3,000
› Raw materials and packaging suppliers: 200
› Co-makers: 20

26. New initiatives
› WWF Program Defenders of the Climate: reduce absolute GHG
emissions by 10% (scopes 1 and 2) between 2008-2012;
› Co-makers collaborative environmental program;
› Supplier relationship program: QLICAR (quality, logistics,
innovation, competitiveness, service, and relationship);
› New international manufacturing network: 28% reduction in
CO2 relative emissions from international flows;
› New boilers - ethanol and biomass;
› Enlargement of the Amazon Industrial Unit: increased number
of benefitted families;
› Introduction of biopolymer plastic;
› Water footprint;
› New picking technology to increase inclusion of disabled
employees;
› New distribution network: 25% reduction in CO2 relative
emissions from distribution;

27. biodiversity as
strategy

28. Opportunities
› Innovation - Union
between scientific and
traditional knowledge
› Value creation for
stakeholders
› Competitive advantage
› Positive environmental
impact

29. Sustainability of
supplier communities
› Access agreements for genetic
resources & traditional knowledge
that includes sharing benefits in
non-monetary ways (e.g. certification,
technology transfer packages) as well
as % of net revenues
› Financial support for sustainable
local development projects,
preservation of biodiversity and building
local institutions
› Program for rural supplier
qualification – BioClicar
supplier partnership that includes support
to production and harvesting and links
to third-party processors

30. the chain of
relationships
Certification Bodies
› Value addition
› Forest
management › Ethnobotanic
Traditional plan › Studies Academic
Community › New concepts › Scientific Community
› Innovative In the approach
products chain’s heart
› Production Process
› Ethical integrated
supply chain
Governments
› Legal framework
cooperation Suppliers

31. Location of the Communities,
Number of Families and Raw materials
MALVAS CAMTA IRATAPURU VER AS ERVAS CAMPO LIMPO
(Ecuador) Cupuaçu, Açai Brazil nut, Breu Branco, Flatsedge, Capitiu
Palo Santo palm, Passion fruit, Breu Branco, Cumaru, Flatsedge
Cacao Copaiba and Jambu
COFRUTA
Murumuru COTIJUBA
palm Flatsedge,
Ucuuba BOA VISTA
Flatsedge, Capitiu,
Tower tree
25
32
COOPAESP
102 16 Babaçu
14
100 23
500
35 PALMEIRA DO
70 PIAUÍ
RESEX MÉDIO Buriti palm
JURUÁ
Andiroba, 50
Murumuru palm 226
50 ONÇA
Guarana
300
COOPROCAM
32 Urucum, Sapucainha
RESEX CHICO 140
MENDES RECA
Jatoba, Dragon’s Cupuaçu, Brazil CABRUCA Supplier of raw materials and
blood nut, Açai palm, Cacao access provider (Genetic
Cumaru Resource and/or Traditional
Knowledge)
32 Supplier of raw materials
7 only
APROCOR 50
CTM/Proter
Passion fruit Sweet passion fruit,
Cow-foot leaf, Supplier of access only
Yerba Mate (Genetic Resource and/or
Traditional Knowledge)
TURVO
Surinam cherry, N N=number of families
Chamomile, Melissa,
Lemongrass, Mint,
Carqueja

32. Distribution of wealth to
supplier communities (US$)
2007 2008 2009
Supply 375,498 973,122 1.378,000
Use of image 16,669 4,455 7,000
Funds and support 328,315 292,097 568,000
Benefit sharing from the 141,180 493,920 528,000
access to genetic resource
or traditional knowledge
Families benefited (number) 1,684 1,895 2,084

33. Ecological 36 native species
and Socio-Economic + 38 exotic
impacts Amazon
Industrial Unit
+ Suppliers
34 providers
2,084 families
50 million 56 raw
consumers materials
8 Countries
1 million consultants 812 products

34. Conclusions

35. Supply Chain
from Natura‘s lenses
› Inclusion of social and environmental drivers
improves supply chain decision making framework
› It is possible to drive outstanding value out of a
sustainable supply chain
› Collaboration and Service pushed to new limits
› Enhanced professional supply chain skills required

36. thank you! João Paulo Ferreira
joaopauloferreira@natura.net