Volume 14 | Issue 1 | Year 2011

This year Mundial, a leader in Brazil’s thriving personal care segment, will celebrate 115 years of existence. To have remained in activity for so long is, in itself, testament to its skills at surviving, not to mention, thriving.
A CENTURY OF GROWTH
Headquartered in Brazil’s southernmost state of Rio Grande do Sul, Mundial today is actually the result of the 2003 merger of what was once two distinct companies: Eberle and Zivi-Hercules. The oldest, Eberle, was founded in 1896, by Abramo Eberle, who began making tin lamps before switching, in 1918, to tableware. In 1928, Eberle added a forging shop, where he began manufacturing knives and swords (for the Brazilian army), as well as a plant for the production of snap buttons and hollow rivets.

The ‘20s also coincided with the foundation of Zivi, another cutlery maker – Rio Grande do Sul’s fame for its flatware, especially its knives, is the result of massive immigration from Northern Italy and Southern Germany, two regions with a long tradition in this métier – that also set up shop in the region, making forged knives and scissors. In 1936, under the brand name Hercules, Zivi became the first manufacturer of fine stainless steel tableware in Latin America.

In the years following World War II, Brazil’s industrial economy started to take off. To avoid having to import manufactured products, Zivi began producing domestic machinery as well. As for Eberle, motivated by the boom of Brazil’s textile industry, it opened a fastening component plant, where, by the 1970s, it was producing buttons, eyelets, rivets, and buckles.

By the 1980s, both companies were prospering to the extent that it seemed propitious to set initial dreams of empire into motion. In 1985, Zivi-Hercules acquired Eberle, becoming the Zivi-
Hercules-Eberle-Group, and then the Eberle-Mundial Group. In 2003, a massive corporate restructuring resulted in the transformation of each brand – Eberle, Hercules, and Mundial (under which its beauty care implements are sold) – into an individual division within the company now known as Mundial Consumer Products. In an effort to reposition itself, the company sold off most of its industrial divisions (such as tools and forged parts) and began focusing in earnest on consumer products in which it already dominated the Brazilian and South American markets.

A BRAND NEW POLISH
In terms of the three main segments that today comprise 95 percent of the company’s activity, the Mundial beauty care segment – a line that includes scissors, brushes, cuticle and nail clippers, and tweezers for both professional and personal use – represents the biggest chunk of the pie. “Currently, we have around 70 percent of the market share in Brazil, which is almost outrageous,” confesses Michael Ceitlin, Mundial’s Chief Executive Officer. “As the largest manufacturer of manicure implements in the world, we definitely dominate the playing field. For this reason we have the chutzpah to say that it’s our mission to become the Gillette of hand and foot care.” And this “mission” is where the nail polish comes in. As part of its strategy to focus more on consumer products, Mundial recently purchased Impala, a major nail polish manufacturer located in São Paulo, which has now been added to Mundial’s beauty care portfolio.

When Mundial purchased Impala, beauty care was its second largest division; today it’s become its first. Ceitlin attributes many factors to this seemingly overnight success, but undoubtedly the most significant is the phenomenal and unprecedented rise of Brazil’s consumer class that has taken place over the last few years. “Due to the Brazilian government’s clear strategy to eradicate poverty, masses of new consumers are now entering the market. With higher salaries and more spending capital, there has been a major increase in terms of small ticket items. In Brazil, specifically, vanity is a high priority for women and nail polish is the most democratic cosmetic there is. It’s the first thing that makes them feel part of a new consumer base, and as if they belong.”

Since Mundial’s acquisition of Impala, the nail polish’s market share has increased from third to almost second. “And to think we just bought it,” reflects Ceitlin. “Our big goal now is to reach No.1. Given the concept and synergy, I think we’ll become the brand of choice for both consumers and trade.” The concept Ceitlin is referring to is Mundial’s strategy of repositioning Impala as a premium brand. With this in mind, the company has become a sponsor of São Paulo Fashion Week, the world’s fourth largest fashion event, where it’s rolling out Impala Fashion colors that are used by leading Brazilian designers.

The fact that Mundial already comes to the table with ample experience in the fashion world – as owner of the Eberle brand of fasteners and buttons – has been a boon. “We applied the same research we do for trim components to the nail polish in order to determine what colors would be in vogue,” says Ceitlin. “And to our surprise, we found that we’re actually very good at interpreting trends.” As proof, in February, Mundial is launching five new colors of nail polish; it turns out that three of them are identical to those being launched by Chanel. “With nail polish, the development time is so short – 90 days – that there is no way to copy. If you want to achieve an aura of fashion, it needs be rooted in true success. You need to have a record and know what you’re bringing to the market.”

“Right now people are loosening up in terms of nail polish colors. Nail polish can be matched to people’s clothes, their dress codes, to specific occasions. We’re stimulating demand not just by proposing new colors, but new ways of using them as well. It used to be that women went to get their nails done at a salon twice a month; now it’s twice a week. And once again, this meshes with Latin Americans’ being very appearance conscious. I don’t know if we would have the same success in Central Europe.”

EXPANSION
Although 83 percent of its total sales are in Brazil – and 40 percent of the remaining 17 percent are in Latin America – Mundial is looking to expand its export business as well. It recently opened a second U.S. subsidiary in Miami (its first is in Boston) where it’s now setting up brand-name kiosks selling Impala in Miami and Fort Lauderdale. To date, the six kiosks mark Mundial’s first foray into retail. If it proves successful, the company has plans to expand the concept throughout the United States and into Canada (a strategy that’s only possible because its personal care division has no U.S. presence, unlike Brazil where massive distribution means its products are sold on virtually “every street corner”).

Mundial also has a third subsidiary in Hong Kong and it’s from China that it plans to manufacture and import its brand new line of glassware and china. Meant to complement its traditional Hercules line of flatware and other kitchenware products, the new line represents a major departure for Mundial who first moved to China in 2003, and experienced a massive learning curve as it learned to deal with issues of supply, design, logistics, quality, and reliability. Having ironed out the kinks, it’s excited about the new line which should fulfill the soaring demands of Brazilian institutional consumers, primarily the hotel and restaurant segment that is bracing for increased business as a result of Brazil’s hosting of the 2014 World Cup and 2016 Olympic Games.

Currently Hercules products, which are made in Rio Grande do Sul, are second only to Brazilian giant Tramontina. “In terms of Tramontina, it’s a big catch-up game,” confesses Ceitlin, who estimates the company has around 20 percent market share of Brazil’s flatware segment (although with the launch of the new glassware lines, he expects this division to grow by 30 percent in 2011). “But not even Henkel makes knives as good as ours – in fact, we made theirs for 20 years!” In fact, together with Henkels and Wusthof, Hercules knives are considered by the London-based CATRA (Cutlery Allied Trade Research Association) to be the best in the world in terms of quality.”

As for Mundial’s fashion division, it also enjoys a leading position with an estimated 60 to 65 percent of the Brazilian market for fasteners, an impressive figure when one considers that Brazil is the fourth largest garment manufacturer and second largest producer of jeans in the world. “There’s always a need for our products and that’s why we’re here,” says Ceitlin, adding that the biggest challenge is keeping production small enough to stay abreast of the accelerating speed at which fashion changes. “These days, clients are very demanding; they have to keep up with window displays that are now changing twice a month. As a result, garment producers need novelty all the time. We have to anticipate trends and respond very quickly.”

Ultimately, it’s this ability to predict demand, openness to change, and commitment to constant innovation – along with its hard-earned reputation for the creation of products of the highest international quality – that sums up Mundial’s recipe for success. “Over time, these things make a difference, and we’ve been around for a very long time,” says Ceitlin. “In April, Mundial will celebrate 115 years and we’ve never been younger or more energetic. In terms of design, product development, and service we’re very innovation focused and this really has an impact on the kind of people we attract. Our structure is very flat – there are only four levels from the shop floor to the top man – which means we can make decisions very quickly.

“All this makes for a young, talent-driven company, which is very unique in the segments in which we operate,” sums up Ceitlin. “I think it’s significant that the biggest difference between us and our competitors is that when we meet with clients, we don’t show them what they need. Instead, we show them what we do – and then we ask them what they want.”

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