PHARMACA INTEGRATIVE PHARMACY
Connecting the dots between prescriptions and natural remedies, Pharmaca offers an informative, full-service model for customers to manage their health.
After Selling his natural food store chain, Capers Natural Food Markets, to Wild Oats Community Markets in the 1990s, Pharmaca Integrative Pharmacy Founder Barry Perzow wasn’t ready to retire. Rather, spotting a void in the U.S. market, he geared up for his next venture.
Noticing a trend of consumers wanting more control over their health care and moving toward a preventative-treatment mindset, Perzow designed Pharmaca after European and Canadian apothecaries or pharmacies that offered homeopathic and other alternative remedies alongside prescription medications. This integrative model serves customers in a way that conventional pharmacies and natural foods retailers can’t, according to Mark Panzer, the company’s CEO.
“Consumers need more help at the pharmacy level. They need more informed or practical education on what the alternatives are between just taking a prescription and using complementary and alternative products and methods to manage their condition or improve their health,” he explained. “The European and Canadian apothecaries offered a wonderful example of the interaction between pharmacist and patient, offering the patient a personalized approach to their health care that was absent in mainstream pharmacies in the U.S. at the time.”
With a firm idea in his mind, Perzow set out to make it a reality. Purchasing a pharmacy on the northwest side of Boulder, CO, he called upon an old friend, Don Summerfield, who was familiar with the concept based on his years at Finlandia, a Vancouver-based natural pharmacy, to be his vice president of integrative medicine and to help craft the perfect product mix.
In 2000, after years of researching and Launched the first Pharmaca in Boulder. Before long, Pharmaca’s integrative approach was changing the way people thought about going to the pharmacy. Customers came to discover new treatment options, develop relationships with practitioners and appreciate the free cup of warm tea offered when they dropped off a prescription. By the end of the first two years in business, Pharmaca had opened seven stores in four states.
As the public eagerly embraced the concept, Perzow recognized they needed structure in order to continue to grow. That’s when he reached out to Panzer.
“I was called in to help restructure the company, to size it and streamline it to be more efficient with category management and operating procedures,” he said. “We took it from a wide-open entrepreneurial idea to a business model that could quickly expand.”
Expand is one word for it. However, explode might be more apt.
The North Boulder store was opened in June of 2000, and in 2001 the company expanded to Mill Valley, CA and Portland, OR, in addition to another Boulder store. In 2002, three more California stores were opened, as well as one in Seattle, WA. In the following years, the company expanded to New Mexico, and slowly increased its presence in Seattle, the Bay Area and Los Angeles. Pharmaca’s most recent store was opened in Menlo Park, CA, in November 2010, bringing its total to 23 stores across five states.
And with the expansion came growing sales, with 2010 being the company’s most successful year: revenue increased by eight percent from the previous year to just under $100 million. “We continue to experience industryleading sales and have significantly improved our EBITDA [earnings before interest, taxes, depreciation and amortization performance over the past two years,” said Panzer.
Staff and Education
A typical Pharmaca store averages about 15 total Team Members per store, with between six and eight staffers on the sales floor or at the pharmacy counter at any one time. While store managers and cashiers are not required to have licenses or degrees, the company requires all staff members undergo training programs that include Extensive on-boarding, computer-based training and hands-on training in integrative modules and product education so they can assist practitioners in servicing customers’ needs.
What really sets the chain apart is its “practitioner model.” Every store has licensed pharmacists and licensed and degreed practitioners, including naturopaths, herbalists and estheticians, who work together to provide customers With holistic, integrative recommendations to manage their health.
“A pharmacist might talk to a customer about drug-induced nutrient depletion when they pick up a prescription, then direct them to an herbalist or naturopath who can then help them find the right way to supplement those depleted nutrients. Or a customer might come in with a specific health concern or condition and speak with a naturopath or herbalist that recommends a course of action to improve their health or condition,” explained Panzer. “Our staff practitioners are highly educated and trained in their specialty, and our environment allows them to practice that specialized customer interaction and integrative health care model in a retail setting.”
Beyond the specialized in-store staffing, Pharmaca established an Integrative Health Advisory Board (IHAB) in the summer of 2010. “The concept was something that we always wanted to do to—to have Mds participate in our product selection process, our staff training and to generally help guide our practices with their expertise,” said Panzer. “We sought out members who were experts in their field, and are delighted to have Mds who are so well-versed in the integrative approach.”
The IHAB is comprised of the following doctors: Dr. Bradly Jacobs, MD, MPH, former founding medical director and Endowed Chair of the Osher Center for Integrative Medicine Clinical Programs at University of California – San Francisco; Bruce H. Price, MD, associate professor of Neurology at Harvard Medical School; and Tieraona Low Dog, MD, fellowship director at the Arizona Center for Integrative Medicine. Members of the board use their expertise to help Pharmaca educate the public, health care professionals and the media about the safe and effective use of integrative medicine.
The company is in the process of developing a slate of webinars led by its IHAB members, and has already held successful events. Its first webinar, with IHAB Chair Dr. Bradly Jacobs, was held in November and gave participants an overview of integrative medicine. In April, during Pharmaca’s annual in-store Thriving in Menopause events, Dr. Tieraona Low Dog led a webinar on Menopause solutions, which was attended by more than 200 people.
Pharmaca hosts nine national events annually, covering specific topics such as heart health, women’s health and healthy mom and baby, and these events offer customers a time to ask specific questions about the topics, get product samples and participate in health screenings. In addition, each store is responsible for developing a monthly slate Of educational events for customers.
“Our staff naturopaths, herbalists and estheticians will lead discussions on specific health topics (e.g. natural allergy remedies), or a store will bring in a community expert to lead health screenings or do product demonstrations,” said Panzer, adding that all Pharmaca educational events are promoted via a monthly newsletter along with weekly e-mails (WellM@il) and social media, such as Facebook and Twitter.
“The original store, which has just over 3,000 square feet of selling space, was stocked with dietary supplements And natural products,” recalled Summerfield. “Since then we’ve expanded that mix to include more natural and organic beauty brands, including our ‘spa’ brands, practitioner-branded dietary supplements, our own private label supplements, natural and organic foods and beverages, as well as fair trade gift items and greeting cards.”
According to Dave Janowicz, vice president of merchandising, Pharmaca looks at its business in five different areas: pharmacy, supplements, HABA, lifestyle and OTC. “We build destinations out of supplements and HABA (with a focus on the beauty side of HABA), which ties into our service model. We also offer OTC products that a customer would expect to find in a traditional drugstore,” he explained. “We build from there with the lifestyle category to create a ‘treasure hunt’ atmosphere that creates excitement for the customers (including fair trade gift items, seasonal products, etc.). They want to know what’s new and different.”
While novelty is important, Pharmaca has a stringent proprietary selection process for any and all products before they can be introduced to a store.
“We carefully evaluate each and every product we sell in terms of ingredients, positive customer experience and efficacy,” said Summerfield. “Pharmaca follows the guidelines outlined by DSHEA and the National Organic Program regarding food and non-food items, and strives to sell only the highest quality natural medicines, OTC remedies, personal care and eco-sustainable lifestyle products, and natural and organic food and beverage products.”
The company also recently established a substantial quality assurance program for all of its supplements, which requires that manufacturers be audited for quality, consistency, labeling, etc. This is another area where the IHAB has proven integral, according to Panzer, sharing that it “is in place not only to help with educational programs, but to keep Pharmaca on point with its quality assurance program. It also keeps us on the cutting-edge and focused on our goals in the integrative health space.”
With expert input, Panzer went on To credit Pharmaca’s category managers with their extraordinary efforts vetting products.
“Anyone can simply buy product and put it on the shelf. Our category management focus is a discipline and our people are more than just buyers,” he said, giving a strong nod to Janowicz, who joined the team from Supervalu where he developed his category management background. “They have a lot of input from our practitioners and board, but they weigh all products based on ingredients, quality, how they fit our standard for natural and organic, etc. Our category management team puts vendors and products through the process and decides how they should be added to planograms—whether an item is a fit for a single store, regionally or chain-wide.
The team utilizes syndicated data such as SPINS and IRI as well as their observations at trade shows for an idea of what trends are emerging to create the best possible mix for the consumer. Based on this type of analysis, Pharmaca has expanded into even more categories, which were launched at the newest store.
“At Menlo Park we not only optimized the space across all categories, but added in new categories as well, such as pet supplies, recycled party Goods and health monitors, all of which were additions to our normal store layouts,” said Janowicz. “We also focused on expanding growing categories such as baby goods, probiotics, beverages and beauty, including natural and organic facial care and cosmetics.”
Stores & Sustainability
Today, Pharmaca stores average about 4,500 square feet with upscale wall case cabinets used around the perimeter of the store. Low-profile fixturing in the center of the store increases visibility and sight lines. In order to give customers a warm, relaxing feeling while they’re shopping, attention is placed on flooring, lighting and overall décor.
“The flow of the stores is designed so the customer immediately understands that our HABA and supplement offerings are the cornerstones of our retail sales. We want customers to understand our integrative approach, as well as the depth and selection of alternatives,” said Janowicz. “Focus is given to way-finding so that customers can easily understand the areas of the store that best meet their needs, whether that’s specific conditions, specific beauty needs, pharmacy needs or convenience grab-and-go items.”
Most recently, Pharmaca has updated the look of its branding, so the Menlo Park store includes new signage, decor and all of which incorporate the new color palette and new logo. “It’s a more modern, cleaner look that we are planning to roll out to all other stores in the next few years,” said Panzer.
But what remains at the heart of all Pharmaca stores is the company’s focus on sustainability. Since the very first store In Boulder, they have all been built with sustainable elements such as bamboo flooring, recycled carpet, energy-efficient lighting and low-VOC paints. Last year the company added solar energy panels and piloted an LED lighting program at its Pearl Street store in Boulder.
“We continually look for ways to upgrade our existing stores and build new stores that are eco-friendly,” said Panzer. “[With the solar panels], we worked hard to ensure that our investment would pay off in the long run, and worked with a local solar company to become Boulder’s first solar-powered pharmacy. Through both the solar panels and LED lighting, we conserve an estimated 34,400 kWh of electricity each year. We’d love to explore doing similar programs at other stores, and we’ll assess the options on a store-bystore basis.”
In addition, the Pearl Street store features monitors that give customers a real-time reading of the energy savings generated by the panels. “The monitor and the panels are a perfect fit for the local environment in Boulder, and simply reinforce our commitment to environmental sustainability,” Panzer added.
Sustainability at Pharmaca also means giving back to the communities it serves and the world at large. In addition to serving as a corporate sponsor of the Vitamin Angel Alliance, the company seeks out community and national causes where its expertise can be used best. “As part of our store opening process, we find local charities or organizations to partner with that align with our mission and our customer base within that specific community. We then develop ways and means to support those charities or organizations, and in the process, develop long term relationships with those that we select,” said Panzer. He added that every holiday in December the company offers a donation program that gives customers the chance to purchase wellness products to be donated to local shelters and food banks.
Advancing Through Technology
While Pharmaca has shaped its stores as one-stop shops, the company recently completed the final version of its website upgrade and has cycled through its first full year of online transactions. Panzer shared that a lot of the products Pharmaca offers are those people typically research on the Internet, and the site now allows them to learn and purchase all in one sitting.
“We really wanted to be able to serve customers outside of our current markets and expand as a multi-channel retailer. In The way that our brick-and-mortar stores are one-stop shops for integrative health products, we want to establish Pharmaca as the go-to place to buy trusted, all natural supplements and beauty care,” said Panzer. “We also continue to build our educational content because we believe that education and information is the key to self-care and an important part of the integrative model.”
Finally, the retailer rolled out its Feel Better Rewards loyalty program to all of its stores last June. In this first year Pharmaca enrolled more than 100,000 members, and it’s now enrolling online customers as well. “We can track their buying behavior and then send them more targeted communications, improving Their buying experience,” said Panzer. “At the core of the program is education. Our preference is to educate and provide them with what they can’t get elsewhere.
“We’re seeing more people looking for ways to be proactive rather than reactive about their health; moving away from someone telling them how to manage their health and instead taking control,” he concluded. “Pharmaca has blossomed because it has stayed true to its mission of integrative health. We’re always searching out new categories and products, but only proceeding when they can enhance our offer and customer experience. Between our practitioners, our pharmacists and our staff, everyone is focused on helping the consumer stay healthy or manage a specific health condition.”