Beleza Natural Took the Beaty Industry By Storm
By: Joseph Miller
One of the women cleaned houses and the other flipped burgers. They put their heads together to found a hairdressing business that treats 130 thousand people a month and has annual revenues of more than $100 million US Dollars. Heloisa “Zica” Assis and Leila Velez are the co-founders of Beleza Natural, the name means “Natural Beauty” – the first and only beauty institute chain dedicated to black hair or kinky hair focusing on Class C, in Brazil.
The company they started with 10,000 reais scraped together from savings and the sale of a Volkswagen Beetle, today has 4000 employees, scattered in 35 locations across Brazil with 5 training centers and annual revenues of more than $100 million US Dollars. In 2013, GP Investments, one of Latin America’s largest private-equity funds bought a third of Beleza Natural for approximately US$32 million. Since the investment, the company has grown 142% and targets a growth to 120 institutes in Brazil, revenues of U$ 680 million dollars and 15 thousand employees, until 2020.
The “Angel Investor”
At 14, Ms. Velez got a job flipping burgers at McDonald’s; by 16, she was the youngest-ever manager in the franchise in Brazil. She struck up a friendship with a co-worker, Rogerio Assis, and met his sister Zica Assis. Mrs. Assis was working as a maid but in her spare time, she was studying to be a hairdresser and was trying to invent a better hair relaxer for Afro-descendant Brazilians who wanted to loosen and tame tight curls with a natural approach instead of the unhealthy Brazilian Blowouts.
Zica spent years in a trial and error process, mixing raw materials and stablished products to create a breakthrough formula to transform the curly or kinky hair. While, Velez and Rogério, created an innovative process to provide the services, similar to an assembly line, inspired on their experience on McDonald’s production process, along with high quality standards and amazing service level.
“We had our angel investor,” Ms. Velez says, a tiny smile playing at the corner of her lips. “Zica’s husband sold his old car; he was a taxi driver.” She and Rogerio, by then her husband, put up their savings from the fast-food chain jobs.
With almost 70% of Brazilian women having hair considered frizzy in texture, and conventional hairdressers lacking specialized treatments for this type of hair, the company is filling an unmet need.
Beleza Natural is far from being a traditional “chain” of beauty salons
The salons are big and spacious around 10,000². Every aspect of the business, from the room temperature to the ergonomics of the salon chairs, is intentional, tested and codified. An internal team conducts quality-control audits of each salon, inspired by McDonalds “I have no shame in copying,” Velez says.
Beleza Natural created an innovative process of application of the product which is similar to a factory production line. Each client is treated in series by a number of different professionals in succession (each specialized in a particular activity). That creates a faster and more efficient process. And more importantly: the possibility to have lower costs and to charge lower prices attracting base of the piramyd women as clients.
Salon guests flow through a veritable conveyor belt of services, from a private consultation that includes an analysis of capillary density across 14 quadrants of your head, to the salon’s flagship Super-Relaxer treatment in another room, and then off to the haircut with different professional.
They offer 30 and only 30 ideal cuts for kinky hair that are geometrically modeled down to the angle you hold the hairbrush and scissors, “Almost as if you were restoring a work of art,” Velez says.
Next, is the styling room where a beauty consultant (“not a hairdresser”) proactively offers tips on how to take care of your hair between salon’s visits. Finally, is the cash register, where clients buy products customized by hair type and designed to last exactly 30 days till your next visit.
Conscious of their past struggles, Velez and Zica keep the experience affordable with the cost of the super-relaxing treatment and after care products. Beleza Natural produces 280 tons of shampoo, conditioner and comb-in treatments each month and it sells the products exclusively through its salons.
From Clients to Employees
The factory has a Research and Development laboratory, and partnership with biotechnology universities in Brazil. The company employs 4000 people, 70% of former clients and 90% of its coworkers have their first job opportunities in the company, providing a positive impact in the community. Beleza Natural hires inexperienced young women, and professionalize them, offering salaries and benefits (meal tickets, transportation vouchers, health insurance, company products and services), even during the training period. “We came from these communities. We know what it’s like to get an opportunity to work”, explain Velez.
Velez and Zica built an empire embracing who they are and where they came from. Despite the fact that economic growth in Brazil has stalled and inflation is taking a bite out of the small disposable income of her target market, Ms. Velez does not seem over-concerned about the impact on her business.
“We won’t give up our expansion plan, but maybe we will do it a little slower than we would like to, maybe this year or the next one,” she said. “Maybe this year will be a tougher year, but it will pass and Brazil will still have 200 million consumers looking for new solutions with low prices, with good quality.”
Joseph Miller is a freelance writer with experience in reporting about finance/business, economy and entrepreneurship