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Increase in allergies leads to big business for Alergoshop, a pioneer in hypoallergenic cosmetics in Brazil

The World Health Organization estimates that 50% of the global population will suffer from at least one allergy by 2050.

Exactly why allergies are increasing so rapidly worldwide is something of an enigma. The so-called ‘hygiene hypothesis’ is one of the strongest supported theories, said Dr Octavio Grecco from the Scientific Department of Atopic Dermatitis of the Brazilian Association of Allergy and Immunology (ASBAI). “Today, people spend more time indoors than ever before and are less exposed to viral and bacterial infections. This could lead to an imbalance in our immune system that contributes to the development of allergies,” he says. The decrease in breastfeeding may also play a key role in this equation.

Sarah Lazaretti, founder and managing partner at Alergoshop

Sarah Lazaretti, founder and managing partner at Alergoshop

Data from the World Health Organization shows that about 30% of the world population suffers from at least one allergy – by 2050, the figure is expected to reach 50%. According to ASBAI, allergic reactions to cosmetics are among the most common. "Our skin is the largest organ in our body and the most prone to allergies due to its unique structure and immune system,” says Dr. Grecco.

When Sarah Lazaretti founded Alergoshop, Brazil’s first company specializing in hypoallergenic products, in 1993, this particular market was very limited. Her idea was to meet the needs of the allergic community, including her daughter, who inspired her to open the business. "It was a new foray into a previously unexplored market niche, and we had a great response. People suffering from allergies and their families felt supported,” says Lazaretti.

At first, Alergoshop worked exclusively with imported products, such as cosmetics and dust mite bedding covers. A year later, the company developed its first own-brand range, Uso Diário (‘Daily Use’), with hypoallergenic cosmetics free of parabens, artificial dyes and fragrances. "Importing cosmetics is particularly challenging. There are many regulations involved, and import duties can be very high. Bureaucracy is another huge obstacle to maintaining stock levels and offering products at a reasonable price,” says Sarah’s sister and business partner, Julinha Lazaretti.

Currently, the Alergoshop brand has over 50 products spread into 10 different lines – ranging from makeup to condoms, cleaning supplies and air purifiers –, which account for 70% of the company’s revenue.

After almost two decades operating through company-owned stores and retail distribution, Alergoshop decided to expand via franchise route. “As soon as we started the business, we received many enquiries from potential franchisees, but we weren’t ready at the time. Over time, we realized that the stores that operated under our brand name would sell more products than multi-brand retailers such as drugstores and natural product outlets,” says Julinha. “That’s why we created a franchise system and a network to help promote the brand and grow our business to a new scale.

Alergoshop currently has 12 franchise stores operating across Brasil. This business model accounts for 6% of the company’s revenue, followed by e-commerce sales (9%), its four company-owned stores (25%) and other retail stores (60%). The Alergoshop network grew by 25% in 2015 and 15% in the first half of 2016.

A bill proposed by the Brazilian Senate to the Environment Commission last year would make it compulsory for manufacturers of cosmetics, drugs and products that can trigger allergic reactions to warn consumers of potential allergens both in the product label and in the package insert. The amendment to the current law, which has been in place since 1976, is expected to minimize threats to allergy sufferers.

"All cosmetic products must have their ingredients clearly listed on the label to protect the health of allergic individuals,” says Dr. Grecco. “Consumers have the right to be informed about allergenic ingredients before purchasing the products,” says Julinha.

Renata Martins

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