Christian Vega
Commercial Vice President
HEB Mexico
/
Insight

Supermarkets Becoming Key Players in Pharma Market

Wed, 06/05/2019 - 13:23

Supermarkets are increasingly benefiting from their appeal as accessible shopping destinations to grow sales of pharmaceutical and healthy lifestyle products. “Supermarkets are naturally a one-stop destination where the whole family can find the products they need,” says Christian Vega, Commercial Vice President of HEB Mexico.
Rather than take an extra trip to the pharmacy, shoppers can find all the products they need at the same place they buy their weekly groceries, making supermarkets important players in the pharmaceutical sector. With presence in a number of Mexican cities, HEB has its own products and services in what it refers to as its ”Health System.” This includes the same catalogue of medicines that clients would find at conventional pharmacy chains, including specialized medicine.
To build a broader profile, HEB Health System also offers products such as dermatological cosmetics, nutritional and sanitary products for babies and a range of products for healthy living. Service is provided not by regular supermarket staff but a team of in-house doctors, pharmaceutical professionals and lifestyle advisers who follow rigorous programs to be up to date in terms of common diseases and treatments, according to Vega.
“HEB Health System even has optical services and a loyalty program for customers with chronic conditions. At the moment, HEB is the only supermarket that offers the seasonal flu shot in winter,” he says.   
Vega points at the healthy lifestyle segment as an opportunity to have an advantageous value proposition over its competition. Supermarkets have greater access to information on customer food and beverage preferences and can adjust their products accordingly. “We identify the best foods and superfoods and complement eating habits with vitamins and supplements to create a complete wellness lifestyle,” says Vega. Personal care can combine supplements, cosmetics products and food and beverages with customers’ wishes for natural ingredients with less or no added chemicals.
HEB is aiming to build a prevention mindset among its customers so they can develop a self-care attitude. Vega points out that customers do not have to be sick to get advice from a health professional.  Through its e-commerce platform, the company hopes to anticipate sales trends and create an extra channel to reach its customers.
Another benefit that supermarkets may be able to offer is better prices. “Our generics catalog  can save customers up to 50 percent in terms of price.” The appeal of generics is particularly strong in Mexico, where many people prioritize price over quality or brand recognition. Considering that supermarkets offer a more diversified portfolio beyond the pharmaceutical area, they have more flexibility to offer discounts on pharmaceutical products by dividing margins among different products.
Some pharmacies have the advantage of buying products through their supply chain from producers who belong to their own group. “We work to get better costs from our vendors to have a highly competitive price compared to other pharmacies, supermarkets or traditional medication distributors,” says Vega.
Supermarkets like HEB investing in teams of professional staff with expertise that goes beyond simple medical indications is likely to make these actors a stronger force in the pharmaceutical market. Apart from having their own pharmaceutical products, supermarkets could also venture into potential partnerships with existing pharmacy chains. This would provide market expertise, improved purchasing strategies and name recognition, which are among the main advantages that supermarkets have over traditional medication retailers, as Vega highlights.  
However, Vega points to the need for constant innovation and the importance of embracing new digital solutions to retain this advantageous position. “Our greatest challenges are to start working on new sales trends by adopting new technologies through omni-channel strategies, innovative projects within our stores and our digital platform and the opening of our first supply center for e-commerce,” says Vega.