Essence Corp has taken full advantage of the unique opportunities that opened for it with the establishment of the Brazilian duty free border business in 2019. The Miami-based beauty distribution company has so far added 20 new doors from the Brazilian border to the 50 or so outlets it supplies on the Uruguay border, plus those in Argentina’s free zones, with more to come.
“It’s very rare for a completely new market to open up,” notes Essence Corp VP of Sales Antoine Bona, the third generation of the family-owned and operated company. “We’ve been working with some of our customers for 30 plus years. Many of them have relationships with my father and some with my grandfather before that. So it’s very rare that all of a sudden there’s a new market that opens up with all new independent operators. It took time to develop the new relationships and it has been a boom for our business.”
In fact, the Latin American border business has helped the company leverage its operation into record sales.
“Essence is coming off a historic year; we had our best year ever in 2023,” confirms Antoine Bona. “We have also been extremely lucky that some of our brand partners have grown tremendously. Our long-time brand partner Interparfums added Ferragamo, DKNY and Lacoste. EuroItalia had added Atkinsons Michael Kors to its brand portfolio. So we’ve grown with our existing partners.”
New and expanded brand portfolio
The company also added some very high-powered new brands, notes Guillaume Bona, Essence VP of Sales who oversees the Caribbean business.
“We have an expanded partnership with Dolce & Gabbana. We had distributed that brand before through Shiseido only for the Caribbean. Now that we have a direct relationship with Dolce & Gabbana we kept the Caribbean but expanded our coverage to manage the cruise ship business and several borders in Latin America,” says Guillaume Bona. “It’s a beautiful brand, and probably one of the only Top 10 brands, along with Versace, that does not belong to a public company. (Note: Dolce & Gabbana took its fragrance license in-house in 2022 when its licensing deal with Shiseido had expired.)
“And we partnered with L’Occitane three years ago, and now we are representing their Sol de Janeiro brand. This is one of the hottest brands in the market and is in high demand in our region. So we are very happy with this.”
“We’ve also done extremely well with Versace,” adds Antoine Bona. “It’s a top five brand worldwide, and extremely strong in the region. They closed last year in the U.S. NPD at number four. That exposure in the U.S. really helps our Caribbean and North American sales, and even the Latin American sales.”
Fragrance business gets stronger
The growing trend for fragrances throughout the Americas is another plus for the Latin American border business, say the Essence executives.
“Fragrance is King, the strongest category of the beauty business. It was always very strong in Latin America, where it was the dominant category. And now it’s a dominant category in North and South America. We are also seeing a huge trend for Haute Parfumerie brands, the niche brands – such as Creed and Parfums de Marly– and we see this as a growing trend in Latin America as well,” explains Antoine Bona. “These fragrances are a little more sophisticated, made with more essential oils and stronger concentrations. This elevates them. And that’s definitely a trend in Latin America. We see it with all the major stores, although not yet as much along the more remote borders.”
Uruguay and Brazil: On the border
Taking a closer look at Latam’s border business, the Essence executives explain that the company currently supplies 20 of the 24 stores now open on the Brazilian border, and about 50 of the 90 stores on the Uruguay border, including DFA and Neutax (Neutral by Luryx).
“Since 2019, many of the operators on the Brazilian side have opened a second store and some have opened multiple stores. And all the stores are new versus those in Uruguay, where some of the stores are 20 to 30 years old. So there’s more recent capex investment in the Brazilian stores,” explains Antoine Bona.
“In Uruguay, with the older stores, the retailers were more strapped for investment in capex during the previous years, but we are seeing more and more investments instore, post COVID as they’ve recovered.”
“Our biggest challenge on the Uruguay border was bringing in new brands and elevating brand image. On the Brazilian side of the border it was more about helping the different brands understand that this channel exists, and developing relationships with these new operators, and coaching in-store category management which we are doing,” he says.
For one thing, some of the operators on the Brazil border were not familiar with duty free when they first opened their stores, he says.
“Many of the operators had real estate and were approached by the local government to open a store; some of them came from agriculture and textiles and they didn’t really have a duty free know-how”
But now, Bona says that the new Brazilian border store operators are becoming more knowledgeable and sophisticated.
“At one point, we were one of the sole beauty suppliers in this region. But I think they’ve been able to negotiate some other brands direct, which is important. It is in our interests for other brands to supply these stores to create the right category management and be able to provide the right offerings for each consumer.”
In fact, a number of the new stores on the Brazilian border have become major operators. Stores such as Cell Shop, Liberty Duty Free, New York Free Shop, and Bah —who have been the most aggressive in opening new doors, are among the stand outs.
New market still growing
“What’s amazing about this market is we continue to have new stores and implementations. Liberty Duty Free is opening a new store in Santo Antonio, a new operator called Global Duty Free is opening in Dionisio Cerqueira, La Petisquera, which is the Mannah Group along with some partners, is opening in Foz do Iguaçu. So we have three or four new stores opening almost every year.
“There were 32 Twin Cities authorized to open duty free stores on the Brazilian side. In the long term, you could have two stores per each of these 32 authorized cities, and could scale very quickly to 64 shops. So the 20 shops we are supplying could eventually grow to 50 stores just like on the Uruguayan side. There’s a lot of growth potential on the Brazilian border,” says Antoine Bona.
From brands to training
Essence Corp handles different portfolios on each border.
Covering the entire travel retail Americas, Essence Corp manages Interparfums, Euroitalia, Victoria’s Secret, Bath and Body Works, Rituals and Parfums de Marly. But the company has been able to expand the distribution of some of its Caribbean brands to Brazil. These include Puig, Shiseido, Hermès and L’Occitane.
“We’ve been able to expand our offering and provide these operators an opportunity to have a consolidated supply distributor that gives great service. We have headcount in the borders, we have somebody based in Iguazu and somebody based in Rio to help support this region. We have a team of three in Uruguay. Plus we have our international trainer, apart from the local trainings, who visits twice a year,” says Antoine Bona.
“Latin America has always been a focus for Essence Corp. The start and the core of the business had always been the Caribbean started by our grandfather Jacques Bona. And then my father (Jean Jacques) and Guillaume’s father (Philippe) expanded to Latin America, first in the free zones, and then domestically. So we have long-standing relationships in LATAM and a deep knowledge of the market. And obviously, we deal with all the key airports in the Americas – Ezeiza, Sao Paulo – Tocumen – Bogota– that are major power houses in South America.
“But Essence Corp also really focuses on the small players (independent operators), which mostly are located in the borders and Caribbean. A mom and pop operation needs a little bit more attention. And that’s why we build teams locally, whether it’s in Brazil, Uruguay, or the Caribbean it is to give exceptional service, and that only happens with proximity. By having local teams and the persistency in visiting them, as well as through training. We invest in these regions because we believe in them.”
