ID#110206

CU50
PUBLISHED ON
JANUARY 3, 2020

Beleza Natural
BY OMAR BESBES, * NELSON M. FRAIMAN, † MARCELO OLIVARES, ‡ MARIA J.
QUINTEROS, * * AND GABRIEL Y. WEINTRAUB * * *

Introduction
It was early Monday morning, before any employees had arrived at the main Beleza Natural
institute.i The Brazilian company’s four founders—CEO Leila Velez; her sister-in-law, Heloísa
Assis; Heloísa’s brother, Rogério Assis; and Heloísa’s husband, Jair Conde—were meeting to
discuss their business improvement and growth plans, which would be presented to potential
investors at the Entrepreneurship and Competitiveness in Latin America (ECLA) programii at
Columbia Business School. Beleza Natural was growing at a rapid pace. Its institutes were
overbooked on most weekends, which created a lively atmosphere—but also a sense of a
missed market opportunity (see Exhibit 1).
For the operational improvement plan, which needed to be implemented over the coming
eight months, they were brainstorming a host of measures, including changing store layouts,
cross-training, hiring more staff, and raising prices. And even though they had nine months
to submit a growth plan, they were also already exploring which other countries would be
good fits with the Beleza Natural model, as they considered a global expansion.

iBeleza Natural institutes are beauty salons.

The Columbia Business School ECLA program was designed to help Latin American entrepreneurs
ii

gain “the skills, tools, and global mindset to prepare for today’s changing global environment, create a
sustainable competitive advantage, and expand business impact.” (“Entrepreneurship and
Competitiveness Programs: Latin America,” Columbia Business School,
https://www8.gsb.columbia.edu/ecp/latin-america.)

Author affiliation Copyright information

*
Assistant Professor, Columbia Business School © 2011-2020 by The Trustees of Columbia University in the City
†
Professor of Professional Practice and Director, W. Edwards of New York. This version of the case replaces an earlier version
Deming Center, Columbia Business School that was published on October 24, 2011.
‡
Associate Professor, Columbia Business School
**
Staff Associate, Columbia Business School Company data has been altered to maintain company
***
Associate Professor, Columbia Business School confidentiality.

Acknowledgements This case cannot be used or reproduced without explicit permission

Medini Singh and Leila Velez provided valuable assistance in the from Columbia CaseWorks. To obtain permission, please visit
development of this case. www.gsb.columbia.edu/caseworks, or e-mail
Ijeoma Anyanwu ’20 provided research and writing assistance on [email protected]
the 2020 case revision.

This case was sponsored by Sovereign Bank.

.
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
History of Beleza Natural
Beleza Natural was a Brazilian chain of beauty institutes, which specialized in products and
services for Afro-Brazilianiii women with kinky, curly, and wavy hair. The company also had
its own factory in Rio de Janeiro, where its research and development team worked to improve
Beleza Natural’s current products and create new ones. All the products used at the institutes
were made at the factory. The company also produced shampoos, conditioners, and hair
creams to sell to clients as maintenance kits for home use. Beleza Natural products were sold
exclusively at the institutes.
Beleza Natural was founded in Rio de Janeiro in 1993. Leila Velez, Heloísa and Rogério Assis,
and Jair Conde had developed a new hair treatment process and business idea. Heloísa Assis
had very curly hair, and she wanted it to be smoother, shinier, and less full, so she started
trying different combinations of hair care products for herself and her husband, Jair. After
years of trial and error, she hit upon the perfect formula for kinky, curly, and wavy hair.
During that same period, Leila Velez and Rogério Assis worked at a fast-food chain, where
they learned about the benefits of efficiency, productivity, and scale. Building on that
experience, they developed a system for delivering the hair treatment that Heloísa Assis had
created. The process was divided into a series of steps, each performed by employees trained
in the particular skills necessary for that stage of the treatment. With those ideas in mind, the
four partners opened their first beauty institute, specializing in kinky and curly hair. They set
out to create a company that, by offering services at lower prices than classical salons charged,
would enable less affluent Afro-Brazilian women to have access to professional hair care. Their
objective was to use the treatment to loosen their clients’ natural curl pattern, which would
change the hair texture from Type 4 to Type 3 or from Type 3 to Type 2, for example (see
Exhibit 2).
In 2011, Beleza Natural had over 1,000 employees, more than 60,000 customers per month, and
11 beauty institutes—10 in Rio de Janeiro and one in Salvador de Bahia.1 (See Exhibit 3 for a
list of the institutes and their sizes.) Most of its clients were lower-income Afro-Brazilian
women with kinky and curly hair who came to Beleza Natural for its main service, the super-
relaxante treatment. This exclusive treatment used a patented product that was applied from
the roots to the ends of a client’s hair to alter the hair type, which helped make it shinier and
softer, formed smooth waves, reduced volume, and created greater movement (see Exhibit 4).
It was not uncommon for Afro-Brazilian women to be socially and racially discriminated
against based on their hair texture. As a result, some women sought this treatment to achieve
mainstream standards of beauty, among many other reasons.

The term Afro-Brazilian refers to black and multiracial Brazilians of African ancestry.
iii

(https://www.encyclopedia.com/places/latin-america-and-caribbean/south-american-political-
geography/afro-brazilians.)

Beleza Natural | Page 2

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Background on Brazil
Brazil is the largest country in Latin America and was inhabited by indigenous people before
being colonized by the Portuguese in 1500. From the 16th century through the late 18th
century, Brazil’s economy was primarily based on agriculture, specifically exporting sugar,
which required significant investments in land and labor. To meet the needs of increased sugar
production, Brazil became a major importer of African slaves, making slaves an estimated
38.3% of the population of Rio de Janeiro, its capital city, by 1550.2 When Brazil ended legal
slavery in 1888 with the passage of the Golden Law, it was the last country in the Americas to
abolish slavery.
The rich history of colonization and slavery in Brazil brought people from all over Europe,
Asia, and West Africa, which contributed to the country’s ethnic diversity. In 2010, it had a
population of more than 190 million, 80 million of whom were black or multiracial. 3 Its real
GDP grew 7.4% in 2010 and was expected to grow about 4.5% in coming years. The country
had an emerging middle class, making up more than 50% of the population, and the poverty
rate had been falling for several years. Brazil’s income inequalities, which had been among the
highest in the world, started to decline in 2000; in 2010, the country’s Gini indexiv was 51.8%
(see Exhibits 5 and 6).
Brazil has strict labor laws, including regulations concerning time off and mandated holidays
(including Sundays). All workers have the right to take 30 vacation days annually and to
receive a year-end bonus equivalent to one month’s salary. In addition, employers are required
to reimburse staff for the cost of transportation to and from work and provide one meal a day.

Hair Care Sector

Going to the hairdresser was deeply rooted in the everyday culture of Latin America. A trip
to the beauty parlor was a social and cultural event, almost as important as the result of the
hair treatment itself. From 2004 to 2009, permanent and relaxant (P&R) sales grew significantly
in Latin America. In 2008, the P&R market accounted for US$1.2 billion worldwide, of which
Latin America had the highest per capita consumption, accounting for about US$450 million.
Even in times of recession, the majority of women stayed loyal to their hairdresser rather than
using cheaper at-home products, because visits to the hairdresser were an integral aspect of
women’s lives, not just part of a simple beauty routine.
HAIR CARE INDUSTRY IN BRAZIL
In 2008, Brazil ranked third worldwide in the cosmetics and toiletries industry, with sales of
about US$29 billion. The hair care sector represented 25% of those sales (see Exhibits 7 and 8).
Within that sector, shampoos and conditioners were the largest categories, accounting for 65%
of total sales. Salon hair care, a very fragmented and informal sector, was the smallest category.

ivA Gini index rating of 0% represents perfect equality; a rating of 100% represents absolute
inequality.

Page 3 | Beleza Natural

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Brazilian women had little brand loyalty for hair care products, shifting frequently among
them. Exhibit 9 shows hair care sector sales in Brazil by subsector from 2004 to 2009.
Due primarily to the population’s ethnic mix of black and multiracial people, 65% of Brazilians
had kinky, curly, or wavy hair, which explained the predominance of conditioners in the hair
care sector. Across the world, Eurocentric, white beauty standards of straight hair dominate,
irrespective of ethnicity and/or profession.4 As a result, Brazilian women were willing to pay
for specialty conditioners, creams, masks, and other products that add definition to hair and
make it smooth, shiny, and healthy.
In 2010, Beleza Natural had sales of about US$65 million (see Exhibit 10 for the company’s
gross revenues from 2001 to 2011). Those sales included super-relaxante treatments and other
services (such as cutting, styling, coloring, manicuring, and pedicuring), as well as Beleza
Natural hair care products. Nearly 90% of the company’s clients were repeat customers.

Beleza Natural
Clients came to Beleza Natural primarily for the super-relaxante treatment. The company’s
other services represented 7% of its revenues. On average, Beleza Natural locations were open
312 days per year. The institutes opened at 8 a.m., Monday through Saturday, and the last
customers of the day were served at 8 p.m. (Beleza Natural would stop accepting customers
once employees estimated that the last accepted customer would not be served until 8 p.m.)
From Monday to Thursday, the number of customers was more or less constant, but over the
weekend that number increased dramatically—by 35% and 75% on Fridays and Saturdays,
respectively.
LABOR TRAINING
In an attempt to maximize efficiency and uniformity of service at the institutes, Beleza Natural
created its own staff development center, the University of Beleza Natural. Hairdressers,
marketing assistants, administrators, salespeople, supervisors, and managers all received
training there.
There were two types of training for hairdressers who gave the super-relaxante treatment. The
first, which took 30 days, was for the auxiliar de cabeleireira (assistant hairdresser), who learned
how to perform the division process—separating hair into small triangular sections—and to
wash and style hair. The second type of training, which took 35 days, was for the consultora de
beleza (Beleza Natural consultant), the professional who performed the super-relaxante
treatment itself. Both the auxiliar de cabeleireira and the consultora de beleza had to pass a
final exam, and new employees were also closely monitored by their manager for three
months. However, Velez observed that although all employees received Beleza Natural
training, the performance of the auxiliar–consultora teams varied. Some were more
experienced or faster than others, which directly affected productivity and the number of
customers who could be served.

Beleza Natural | Page 4

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Employees who gave the super-relaxante treatment or provided other beauty care services
earned 12 realsv per hour. There were two six-hour shifts per day. Each institute also had three
people in charge of warehouse stock and two people per shift in charge of cleaning, all of
whom earned R$600 per month. In addition, three people per shift worked at the sales counter
at each institute; they earned R$10 per hour. The entire staff received carfare and lunch—which
cost R$12 per day per employee—and a year-end bonus; all those who worked directly with
customers (including sales staff) received R$950 per month.
THE PROCESS
When a client entered an institute, she took a number and proceeded to the front desk (see
Exhibit 11 for an example of an institute layout). The receptionist then welcomed her, asked if
she had been to a Beleza Natural institute before, and processed her payment; the super-
relaxante treatment cost R$65. Taking the client’s ticket and payment took two minutes.
Before proceeding with the super-relaxante treatment, new customers (who represented 10%
of all clients) had to have a hair evaluation given by an employee trained in that procedure.
When a client’s hair was too damaged from a previous coloring treatment, she could not begin
the super-relaxante treatment immediately. Instead, she had to have a hair recovery treatment
at the hydration station and then return to the institute in a month, after having used Beleza
Natural products at home during that period. Ninety percent of those who could not have the
super-relaxante treatment right away chose to have the hair recovery treatment and then wait
as required. The employee who performed the hair evaluation also explained the whole
process to the client and told her about all the products that were available for home use. The
evaluation usually took 10 to 15 minutes.
Next, an employee checked to see that the client had made her payment before she entered the
salon section. Then the client proceeded to the first step of the super-relaxante treatment, the
division process. Depending on the length of the client’s hair and how tangled it was, the
division process took from 10 to 15 minutes. Next, the client was given the super-relaxante
treatment itself; the patented Beleza Natural products were applied, creating smooth hair and
well-defined curls. The super-relaxante process took 40 minutes on average, but it could take
as little as 25 minutes or as much as an hour, depending on the client’s hair type and the
consultora de beleza’s skills. After a client left the super-relaxante station, she went to the
hydration station to have her hair shampooed and conditioned, which took an average of eight
minutes per client.
Last of all, the client had her hair dried and styled, which could include having it cut and/or
colored. Twenty-five percent of clients had their hair cut, which took an average of 10 minutes.
Coloring took an average of 45 minutes, although the hairdresser spent only 15 minutes with
the customer, who then waited 30 minutes more for the dye to set. Only 10% of customers
chose to have their hair colored. While the client had her hair dried and styled, which took 10
minutes on average, the auxiliar also told her how to comb her hair at home.

v US$1 = R$1.67 (December 31, 2010).

Page 5 | Beleza Natural

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Once the treatment was finished, customers could buy monthly maintenance products at the
sales counter next to the styling station. Sixty-five percent of customers who received the
super-relaxante treatment bought beauty care products at the institute before leaving. The
average basket value of the products was R$40, with a margin of 50%.
Exhibit 12 shows the number of employees at each station of the super-relaxante process;
Exhibit 13 shows the observed demand for each institute. On average, the products used
during the super-relaxante treatment cost R$4 per customer; the institutes received supplies
of products once a week. Exhibit 14 shows other costs related to the operation of the institutes.
Velez commented, “Many different factors had to be dealt with as we worked to streamline
our process so that we could accommodate more customers.” 5 Click here to watch Velez
discuss operations management issues in her growing company.
The conjunction of weekly and seasonal patterns of demand along with Brazil’s inflexible labor
laws made implementing the necessary operational changes a challenge: If Beleza hired
additional staff to meet the high demand on weekends, the company would end up having to
pay salaries to employees who would be idle for most of the week.
“And even though not all of our employees perform equally well,” she said, “they are all
highly skilled—particularly the consultoras de beleza, who receive special training in the
super-relaxante treatment. We need to bear in mind that hiring additional staff means having
to invest in more training.”
Workforce management was only one among a host of potential issues identified. While Velez
and the rest of the management team well understood the issues and had ideas for potential
fixes, they did not necessarily agree on where they should start. What impact would
improvement measures have on Beleza Natural’s operations, and how should the team
prioritize these measures?
Click here to watch Velez discuss expansion plans at Beleza Natural.

Epilogue
NATURAL HAIR CARE MOVEMENT

Around 2005, the natural hair care movement swept through the United States. It was a time
when women of African ancestry stopped chemically relaxing and straightening their hair and
were empowered to embrace their hair texture in its naturally kinky and curly state. The
movement brought self-expression, pride, and community. As a result, sales of styling
products such as moisturizers, setting lotions, and curl creams increased, and sales of chemical
relaxers decreased significantly. In the United States alone, as of 2013, sales of relaxers declined
26% over a five-year period, and sales are projected to continue declining through 20246 (see
Exhibit 15).
Previously, many women were fearful about wearing their natural hair freely, because of how
it was perceived in the workplace and the potential repercussions that came with it. In July
2019, California’s governor signed the Crown Act into law, making it the first state to ban

Beleza Natural | Page 6

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
discrimination against black students and employees because of their natural hairstyles.7 The
Crown Act addresses unfair grooming policies that have a disparate impact on black women,
men, and children and has drawn attention to cultural and racial discrimination taking place
within workplaces and schools.8 “In a society in which hair has historically been one of many
determining factors of a person’s race, and whether they were a second-class citizen, hair today
remains a proxy for race,” the bill says. “Therefore, hair discrimination targeting hairstyles
associated with race is racial discrimination.”9 Since then, similar laws have passed in New
York and been introduced in New Jersey. To further support ending hair discrimination,
Unilever cofounded the CROWN (Creating a Respectful and Open World for Natural hair)
Coalition in partnership with the National Urban League, Color of Change, and the Western
Center on Law and Poverty to help create a more equitable and inclusive beauty experience
for black women and girls.10
BELEZA NATURAL TODAY
The natural hair care movement gained traction in Brazil and all over the world. The black
beauty market has been growing at an estimated 20% a year in Brazil, according to Kline
Market Research Group. Google searches for transição capilar (“transition to natural hair” in
Portuguese) have gone up every year since 2014.11 As younger clients brought new trends and
insights, and with more Afro-Brazilian women embracing their naturally kinky, curly hair,
Beleza Natural adapted its services and created a business unit to meet the needs of its
changing clientele. Whereas the super-relaxante was the dominant service offered a few years
ago, today the salon is more equally split between offering the super-relaxante treatment and
natural hair styles. While the super-relaxante line was efficient, in the new operating model,
detangling the hair takes even more time.
DISCUSSION QUESTIONS
1. Would the Beleza Natural model work in the United States? Why or why not?
2. As Beleza Natural considers global expansion, what are some factors it should consider
regarding market dynamics and business model?

Page 7 | Beleza Natural

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibits
Exhibit 1
A Typical Beleza Natural Institute

Beleza Natural | Page 8

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 1 (cont.)

Source: Company photos.

Page 9 | Beleza Natural

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 2
Hair Typing System
The Andre Walker Hair Typing System was created in the 1990s and is one of many methods
used to classify hair types. The system assigns both a number and a letter to characterize and
describe different hair textures (i.e., 1A, 2C, 3B, 4A).

Source: www.andrewalkerhair.com.

Beleza Natural | Page 10

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 2 (cont.)
Type 1 Straight Hair: Generally speaking, Type 1 hair is straight; however, Andre categorizes
this hair type into three very specific segments—Type 1A, Type 1B, and Type 1C.
 Type 1A hair is described as fine, very thin, and soft, with a noticeable shine.
 Type 1B hair is medium-textured and has more body than Type 1A.
 Type 1C hair is the most resistant to curly styling and relatively coarse
compared to other Type 1 categories.

Type 2 Wavy Hair: Type 2 is wavy hair that usually isn’t overly oily or very dry. The thought
is that Type 2 hair falls right in the middle of Type 1 and Type 3.
 Type 2A hair is fine and thin. It is relatively easy to handle from a styling
perspective because it can easily be straightened or curled.
 Type 2B hair characteristically has waves that tend to adhere to the shape of the
head.
 Type 2C hair will frizz easily and is fairly coarse.

Type 3 Curly Hair: Curly hair textures have a definite “S”-shaped curl pattern. Since the
cuticle doesn’t lay flat, you will notice that curly hair isn’t nearly as shiny as Type 1 (straight
hair) or Type 2 (wavy hair) hair types.
 Type 3A hair is very shiny and loose.
 Type 3B hair has a medium amount of curls, ranging from bouncy ringlets (spiral-like
curls of hair) to tight corkscrews (spiral-shaped corkscrew curls).
 Type 3C hair isn’t a part of the Andre Walker Hair Typing System. A community
member at NaturallyCurly.com created Type 3C after Andre Walker released his hair
typing system. The prevailing thought was that the original system left this hair type
out. Consequently, Type 3C hair has been defined as tight curls or coils that look like
corkscrews.

Type 4 Kinky Hair: Type 4 is “kinky,” or, more appropriately, full of tight coils (tightly curled
hair). Typically, Type 4 hair is also extremely wiry and fragile. Oftentimes, it appears to be
coarse; however, it is really very fine, with several thin hair strands densely packed together.
Note that Type 4 is one of the most common found in black hair (African-American hair).
 Type 4A hair is full of tight coils. It has an “S” pattern when stretched, much
like Type 3 curly hair.
 Type 4B hair has a less defined pattern of curls and looks more like a “Z,”
because the hair bends with very sharp angles.
 Type 4C hair isn’t a part of the Andre Walker Hair Typing System but was
created by a member of the natural hair community.

Source: www.curlcentric.com/hair-typing-system/.

Page 11 | Beleza Natural

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 3
Beleza Natural Institutes
Size
Institute (square # Stations
meters)
Alcântara 618 40
Campo Grande 950 78
Caxias 970 73
Ipanema 976 75
Jacarepaguá 490 24
Liberdade-Salvador 1360 104
Madureira 574 49
Niterói 672 54
Nova Iguaçu 930 36
Tijuca 891 50
Vitória 390 36

Source: ECLA presentation by Beleza Natural, New York City, January 11, 2011.
Note: # Stations refers to places where a consultora de beleza or an auxiliar de cabeleireira performs
her task in the super-relaxante process.

Beleza Natural | Page 12

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 4
Super-Relaxante Treatment Results

Source: Company publicity materials, https://www.slideshare.net/Marciabn/institucional-beleza-natural-

english.

Page 13 | Beleza Natural

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 5
Gini Index Comparison
70.0%
2010 2020
60.0%

50.0%
Gini Index

40.0%

30.0%

20.0%

10.0%

0.0%
Finland India United China Brazil Colombia
States
Source: Euromonitor

Beleza Natural | Page 14

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 6
Social Class Composition in Brazil (in thousands)
Categories 2005 2006 2007 2008 2009 2010
Social Class A 11,016 11,233 11,469 11,694 11,877 12,062
Social Class B 6,635 6,813 7,048 7,267 7,402 7,544
Social Class C 15,043 15,465 16,027 16,551 16,864 17,203
Social Class D 39,869 40,823 41,985 43,071 43,847 44,698
Social Class E 58,849 59,228 59,116 59,126 59,794 60,366

Note: Social Class A includes individuals with a gross income greater than 200% of the average gross
income of all individuals aged 15+. The number of people in the class is based on the de jure definition
of population, which counts all individuals in a geographical area on the basis of their place of residence.
Annual gross income refers to income before taxes, including earnings from employment, investments,
benefits, and remittances, as well as to social security contributions from all sources.
Social Class B includes individuals with a gross income between 150% and 200% of the average gross
income of all individuals aged 15+. The number of people in the class is based on the de jure definition
of population, which counts all individuals in a geographical area on the basis of their place of residence.
Annual gross income refers to income before taxes, including earnings from employment, investments,
benefits, and remittances, as well as to social security contributions from all sources.
Social Class C includes individuals with a gross income between 100% and 150% of the average gross
income of all individuals aged 15+. The number of people in the class is based on the de jure definition
of population, which counts all individuals in a geographical area on the basis of their place of residence.
Annual gross income refers to income before taxes, including earnings from employment, investments,
benefits, and remittances, as well as to social security contributions from all sources.
Social Class D includes individuals with a gross income between 50% and 100% of the average gross
income of all individuals aged 15+. The number of people in the class is based on the de jure definition
of population, which counts all individuals in a geographical area on the basis of their place of residence.
Annual gross income refers to income before taxes, including earnings from employment, investments,
benefits, and remittances, as well as to social security contributions from all sources.
Social Class E includes individuals with a gross income less than 50% of the average gross income of
all individuals aged 15+. The number of people in the class is based on the de jure definition of
population, which counts all individuals in a geographical area on the basis of their place of residence.
Annual gross income refers to income before taxes, including earnings from employment, investments,
benefits, and remittances, as well as to social security contributions from all sources.

Page 15 | Beleza Natural

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 7
Cosmetics and Toiletry Market

Source: “Brazil: Key Player in Global Beauty and Personal Care Growth,” Euromonitor International.

Exhibit 8
Cosmetics and Toiletry Market in Brazil

Source: “Brazil: Key Player in Global Beauty and Personal Care Growth,” Euromonitor International.

Beleza Natural | Page 16

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 9
Hair Care Sales by Subsector in Brazil

Source: Euromonitor International estimates.

Exhibit 10
Beleza Natural Gross Income 2001 to 2011 (Million Reals)

Source: ECLA presentation by Beleza Natural, New York City, January 11, 2011.

Page 17 | Beleza Natural

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 11
Example of Institute Layout

Source: ECLA presentation by Beleza Natural, New York City, January 11, 2011.

Beleza Natural | Page 18

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 12
Staff Performing Super-Relaxante Treatment
# workers at each station

Super
Institute Reception Division Hydration Hairstyling
Relaxing
Alcântara 1 4 10 3 5
Campo Grande 2 6 14 5 7
Caxias 2 7 16 6 9
Ipanema 2 3 10 2 4
Jacarepaguá 1 3 10 3 4
Liberdade-Salvador 1 3 14 2 5
Madureira 2 8 18 4 9
Niterói 2 6 14 3 6
Nova Iguaçu 2 5 12 3 6
Tijuca 2 5 14 3 6
Vitória 1 4 12 3 6

Source: ECLA presentation by Beleza Natural, New York City, January 11, 2011.

Exhibit 13
Observed Demand
Clients Clients per Clients Mon-
Institute Clients Fri Clients Sat
per month week Thu
Alcântara 5,000 1,167 164 223 288
Campo Grande 7,000 1,634 230 311 403
Caxias 7,700 1,797 253 342 443
Ipanema 3,500 816 115 155 201
Jacarepaguá 3,500 816 115 155 201
Liberdade-
Salvador 4,100 958 135 182 236
Madureira 8,900 2,081 293 396 513
Niterói 6,400 1,492 210 284 368
Nova Iguaçu 6,000 1,399 197 266 345
Tijuca 6,200 1,448 204 275 357
Vitória 5,150 1,200 169 228 296

Source: ECLA presentation by Beleza Natural, New York City, January 11, 2011.
Note: Mon-Thu reflects daily totals.

Page 19 | Beleza Natural

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 14
Beleza Natural Operating Costs
Cost
(Reals in
000’s)
Rent 6,000
Electricity, gas, and water 70
Depreciation 1,500
General management 7,000
Marketing 200

Source: ECLA presentation by Beleza Natural, New York City, January 11, 2011.

Beleza Natural | Page 20

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Exhibit 15
Black Hair Care Market Growth in the United States

Relaxer sales continue to plummet to niche status

In 2019, at-home relaxer sales are expected to reach $403 million. By 2024, Mintel, a global
market research firm, expects this segment to fall to $135.5 million, which will be below hair
color. A desire for chemical-free hair, rather than a total abandonment of straight styles, is
behind such a precipitous decline in sales. While there are black women across all age groups
who still use relaxers, most fall within the baby boomer or older group who are simply
accustomed to wearing relaxed hair. As this segment ages and is no longer active in the
category, brands and retailers will shrink their offerings to consumers.

Source: Mintel Black Haircare—US—August 2019 Report

Page 21 | Beleza Natural

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.
Endnotes

1 All company data is taken from an ECLA presentation by Beleza Natural in New York on
January 11, 2011, and from a meeting with Leila Velez in New York on May 7, 2019, with
Carri Chan and Ijeoma Anyanwu.
2 Exodus Cry, “4.5 Million Enslaved Africans Went to Brazil,” https://exoduscry.com/wp-

content/uploads/2013/08/liberdade_history_of_slavery.png.
3 Euromonitor reports are the source for all country and industry data cited in this case,

unless otherwise noted.

4 Branca Lessa de Sá, “Meet The Influencers Making Brazil's Natural Hair Movement

Mainstream,” Vice (April 18, 2019), https://www.vice.com/en_us/article/43jdnn/brazilian-

women-natural-hair-movement-influencers.
5 All statements by Leila Velez are cited from an April 8, 2011, phone interview.

6 Mintel Press Office, “Hair Relaxer Sales Decline 26% Over the Past Five Years” (September

5, 2013), https://www.mintel.com/press-centre/beauty-and-personal-care/hairstyle-trends-
hair-relaxer-sales-decline; Mintel, “Black Haircare—US—August 2019” (August 2019),
https://store.mintel.com/black-haircare-us-august-2019.
7 CBSNews.com, “California becomes first state to ban discrimination against natural hair,”

(July 4, 2019), https://www.cbsnews.com/news/crown-act-california-becomes-first-state-to-

ban-discrimination-against-natural-hair/.
8 The CROWN Coalition, “Creating a Respectful and Open World for Natural Hair,”

https://www.thecrownact.com/.
9 Liam Stack, “California Is First State to Ban Discrimination Based on Natural Hair,” The

New York Times (June 28, 2019), https://www.nytimes.com/2019/06/28/us/natural-hair-

discrimination-ban.html.
10 Dove.com, “Ending Discrimination Against Black Hair with The CROWN Coalition”

(2019), https://www.dove.com/us/en/stories/campaigns/the-crown-act.html.
11 Lessa de Sá, “Meet The Influencers.”

Beleza Natural | Page 22

BY OMAR BESBES,* NELSON M. FRAIMAN,† MARCELO OLIVARES,‡

MARIA J. QUINTEROS,** AND GABRIEL Y. WEINTRAUB***
This document is authorized for use only in Victor Araman's EMBA 541 -Victor Araman at American University of Beirut from Aug 2020 to Feb 2021.