October 8, 2003

Grass Is Green for Amazon Farmers


CAMPO LIMPO, Brazil - José Mateus has placed his hopes for the future in the sweet-scented grass now reaching shoulder height in the fields he farms not far from where he lives with his family of four sons and over a dozen grandchildren in this poor dusty community on the Amazon delta.

The grass, known as priprioca, should fetch twice the price of the watermelons and manioc that Mr. Mateus, 52, has traditionally grown in this area, which is a two-hour drive southwest of Belem. If the new crop succeeds, he says, it "will change everything in our lives -better houses for us, better food for our kids."

That Mr. Mateus and his equally poor neighbors nurture such hopes at all is thanks largely to Natura, a Brazilian cosmetics company that has helped pay for the planting of the grass and has promised to buy it all to make a new perfume it hopes to sell to environmentally conscious consumers. Natura plans to go global with a range of body care products made from exotic fruits, roots and nuts, all harvested in sustainable forest reservations or on small, traditional plantations like Mr. Mateus's.

Executives at Natura, which is based in São Paulo, argue that by buying produce from the forest dwellers and also from farmers like Mr. Mateus, they can help preserve the Amazon's rich biodiversity and its intricate ecological balance while still earning a profit for their company. But can they succeed where bigger corporations with deeper pockets, firmly established in the developed world, have failed?

The Body Shop and Ben & Jerry's, for example, scored runaway commercial successes in the 1990's with eco-friendly products from the Amazon, but then found that they had badly damaged their reputations when they were unable to keep up with demand and were forced to turn to more conventional sources to supply the market.

Such a test now looms for Natura as it prepares to roll out its Ekos brand of shampoos, soaps, massage oils and perfumes next year in Europe. Sales to the United States should follow in 2005, according to Pedro Passos, the chief executive of Natura.

Natura hopes to capture a relatively modest $200 million slice of the estimated $6 billion worldwide market for natural or organic cosmetics, which would lift its current sales of about $500 million within Brazil by about 40 percent. But to do so Natura will have to compete directly with well-known international brands like Yves Rocher, L'Occitane, Bodyworks, Origins and Aveda.

While eager to repeat the commercial success of the Body Shop and Ben & Jerry's, Natura executives are equally eager to avoid the problems faced by both those companies. Ben & Jerry's Rainforest Crunch ice cream and the Body Shop's creamy Brazil nut shampoos and conditioners were once hailed - by their producers and consumers - as products that could help save the Amazon by offering local farmers an alternative to the illegal, and highly profitable, logging of tropical timber and forest clearing for mining, cattle raising or intensive farming of soybeans and other cash crops.

But as demand exploded, the Amazon cooperative that harvested Brazil nuts for the ice cream could not meet demand and Ben & Jerry's had to buy nuts on the open market supplied by large-scale producers, some notorious for their antilabor practices. Rainforest Crunch was discontinued in 1997.

The Body Shop ran into trouble when aid groups and its Brazilian representative sharply criticized statements by the company's founder, Anita Roddick, that the Amazon natives were being paid first-world wages for growing Brazil nuts. To add to the Body Shop's troubles, a chief of the Kayapo tribe, a main supplier and symbol of the company's "Trade Not Aid" initiatives, filed suit over the use of his image in Body Shop promotions. The Body Shop now buys Brazil nuts from a larger-scale Amazonian cooperative and also from Peru.

"It wasn't that the intentions of Ben & Jerry's or the Body Shop were not good," said Jon Entine, a expert on business ethics. "It's just that when they found out just how difficult it was, they took the easy way out and began behaving like any other big corporation."

The Amazon is still shrinking fast. Last year, another 10,000 square miles of rainforest - an area roughly the size of Belgium - were lost mainly to pasture land, soybean plantations and illegal logging, representing a 40 percent increase in deforestation compared with the previous year.

So, is Mr. Mateus right in pinning his hopes on priprioca? Certainly, according to Eduardo Luppi, Natura's director of innovation.

Priprioca, which has long been grown in small quantities in the region, was first spotted by a member of Mr. Luppi's research team hanging on a herb stall at the dockside Ver-o-peso market in the bustling Amazon port of Belem.

The researchers were charmed by the plant's scent, but dismayed when they found out the market was supplied by only one tiny farming community that grew just four tons of the grass a year. For an annual run of perfume, Natura needed at least 40 tons.

Mr. Luppi's team persuaded the farming community to share its expertise with two others, including Campo Limpo. Natura bought bulbs from the original community to plant and promised to buy crops from all three groups.

"We don't want this model to be valid for just two or three families," Mr. Luppi said. "It has to be more than emblematic, more than a niche. And we have to make money."

Mr. Luppi is also working on switching all Natura's Ekos soaps from tallow to a vegetable oil base, meaning a potential extra $3,000 a year income - a small fortune by local standards - for another 1,000 families in the region.

As many farming communities already sell fruit and vegetables or milk to regional cooperatives, Mr. Luppi is simply asking those cooperatives to start handling oil pressed from Brazil nuts, andiroba and passion fruit seeds, too.

Using a cooperative, however, did not work for Ben & Jerry's. And the Body Shop found it difficult to coordinate supplies from isolated pockets of the Amazon jungle. So why should Natura have more success?

"We do have the advantage that we are Brazilian and we are in Brazil," Mr. Luppi said. "If you are in England or America and want to manage something like this in the Amazon by remote control, you can forget it."

While skeptical that the market for Amazon products can produce another boom like that of the 1990's, experts here say the global niche is still big enough to make it worth Natura's while.

"If they learn from others mistakes in the past, they could do it," said Saulo Petean, a former representative for the Body Shop in Brazil. "As long as the social responsibility thing doesn't become just another marketing tool, it is possible to do both things - be responsible and turn a profit."