Weleda wants to grow again

It all began with a small laboratory and a medicinal plant garden. One hundred years later, Weleda is one of the world's largest suppliers of natural cosmetics and anthroposophic medicines. The products of the Swiss company with a German branch in Schwäbisch-Gmünd can be found in health food shops, drugstores and pharmacies throughout Germany. Weleda employs 2.500 people around the globe and is on the market in 50 countries.

Turnover slump in 2020

In the Corona year 2020, the company experienced a drop in turnover. The bottom line was 424.1 million euros and a minus of 1.2 per cent compared to the previous year, as Weleda announced at a press conference at the end of October. "We are very satisfied with how we have come through the crisis with our way of doing business," says Weleda CEO Nataliya Yarmolenko in an interview with BioHandel. "How well we have managed shows that we are a crisis-resistant company."

To keep it that way, Weleda wants to become more profitable again. The company, which has been value-oriented since its founding in 1921, has rethought its own way of doing business in its anniversary year. "We have once again made a stronger commitment to sustainability, because we see ourselves as a pioneer of sustainable business," says Yarmolenko. In 2021, Weleda said it would operate globally in a climate-neutral manner. In addition to all existing initiatives, the company will invest one per cent of its turnover in sustainability in the future.

The natural cosmetics specialist has also now anchored its stance on growth and profit in its corporate strategy. "We do not see growth and profit as an end in itself. We don't want to grow to make a profit, but to increase our relevance and thus be able to further advance sustainable consumption and sustainable business," Yarmolenko explains.

Organic specialised trade plays an important role

The German specialist organic food trade is an important sales channel for Weleda in this respect. "We know that people who buy organic food also reach for Weleda products more often than others," says Yarmolenko. An unpackaged pilot project with Alnatura has "started very well" from Weleda's point of view.

In some of the chain store's Super Natur stores, customers have been able to fill body oils, shower gels and liquid soaps, among other things, into reusable containers, also from Weleda, at Unpacked stations since April. "We have received the first results and are now looking at how we can make these projects bigger, and the organic specialist trade will probably be another option for us," Yarmolenko reports.

On the road to success with natural cosmetics

According to Yarmolenko, organic retailers accounted for a low double-digit percentage share of Weleda's turnover in Germany in 2020 and proved to be "extraordinarily robust" during the Corona period. Weleda recorded the strongest declines in turnover in the sale of medicines. In the cosmetics division, however, the company grew worldwide by two per cent.

The overall German market for natural cosmetics grew by 5.7 per cent in 2020. The division also grew by around five per cent in the first half of 2021. This is what it says in the respective editions of the Natural Cosmetics Industry Monitor, which the consulting and information service The New publishes twice a year.

Sustainable supply chain for stable prices

Weleda recorded a plus of 2.5 percent in natural cosmetics in the first six months of this year. To continue the positive course, the company is also relying on the organic specialised trade. "The good relationship and good development in the organic specialised trade is a matter close to our hearts," says Yarmolenko.

Given the lack of raw materials and Weleda's plans to become more profitable, should retailers expect prices to rise? "Of course, like everyone else, we are confronted with rising raw material prices," Yarmolenko explains. However, Weleda wants to align the supply chain in a long-term and sustainable way in order to be able to keep costs and prices stable. Yarmolenko emphasises: "Our strategy is not aimed at maximising profit through price increases, I want to be clear about that."