ARRIE NEL: Family-First Pharmacies Committed to Community-Centric Care

There are now 104 Arrie Nel pharmacies populating the South African pharmaceutical landscape, and this number is constantly increasing, employing just under 4000 people. Now approaching its 25th anniversary as the Arrie Nel Pharmacy group, formed in 2000 with the confluence of three distinct pharmacies, the very first in its armoury was bought in 1983, when it took on the Hamilton Park Pharmacy in Sunnyside, Pretoria. 

The company then opened a wholesaler in 2003, with the vision of undertaking all centralised buying for the pharmacies and so pave the way for more favourable pricing for customers; such was the success of this move that in 2010 the group made the move to become fully wholesale. The latter years of the 2010s were Arrie Nel’s busiest ever, during which time it opened or bought upwards of 12 pharmacies or clinics every year; 2022 has continued this trend and looks set to be the group’s most productive yet as it continues to multiply in strategic locations throughout South Africa.

“We at Arrie Nel believe that a healthy family is what our country needs,” opens outgoing-Director Daniel Nel, “and putting the family first is our pharmacist’s commitment to our customers. We believe that family values consist of certain actions and virtues which are important for a family to uphold, like honesty, great service and price, trust and most importantly respecting each and every one entering our pharmacies.

“These core values have made the Arrie Nel name synonymous with being the ‘family first’ value proposition in every community in which we operate.”

AFFORDABILITY FOR THE COMMUNITY

The importance of the pharmaceutical industry has in recent years only been greatly amplified by the global health crisis, and putting family heath first has been the number one priority for many in the country throughout its protracted duration. “We are the community pharmacy, and we offer pharmaceutical and clinical services to our nationwide family,” Nel asserts, detailing the inner workings of the group.

“The way we work is that we do not open new pharmacies, rather we buy currently trading stores – typically local stores, smaller and very much centred around pure pharmaceuticals. Our whole motive and our guiding principle is that we strive to serve communities and deliver affordable medicine to their inhabitants, which we can very much use our buying power to do with this type of pharmacy.

“This structure is also allowing us to begin to change the perception that using a big corporate store is inevitably the cheaper option,” Nel expands. “Even if there is an independent store in which we have even a 1% interest, if the owner has an account with one of our wholesalers then they are as strong as Arrie Nel. This is where we changed the game, making the independents as strong from a price perspective as Arrie Nel, and it aligns with our overarching aim to provide people with inexpensive medicine.”

Arrie Nel is not in the business of opening brand-new, untested stores, and its name certainly won’t be found in large malls; “we’re the guys who look after the community,” Nel reiterates. “In Gauteng, for instance, we own three stores in the Montana area which each serves its own distinct community just within that one suburb, while Covid really did prove almost like a switch for us and for people embracing our approach; all of a sudden people were returning to their old pharmacists and thus our model ended up positioning us extremely well for whatever the situation threw at us over the last three years.”

According to Nel, fortuitously, the pandemic had little operational impact on Arrie Nel, as it coincided with the busiest period in the company’s history to date in terms of new acquisitions and purchases; it only made life exponentially busier, Nel relates. “It was almost like we had set up ourselves up for it, without knowing it,” he describes. “The vision of the group has always been to expand, to never stagnate, and if you look back to its beginnings you will see that each year this translated to around two or three new stores each year.

“Around 2016, however, we started looking closely at the independent and corporate stores in the country and, in the end, we took a huge map of South Africa – which is in my office today – and plotted each and every one of its pharmacies, highlighting towns where we saw potential. Our Financial Director and one of our Operational Directors then embarked on a two-year roadshow to see almost every pharmacy around the country, to investigate how others operated and how wholesalers worked elsewhere.

“There came a point that we realised that we were well-positioned to service the country’s pharmacies, through our own wholesalers which only supplies to our own pharmacies. This resulted in our opening it up more widely and everybody just adopted our model. More people than ever then began offering us their pharmacies, and through Covid a lot of people were presented with the ideal opportunity to bow out of their ownership, not because there was any hint of financial trouble but purely because the stars aligned and the timing was perfect.”

MOPANI AND ARRIE NEL UNITE

Set on remaining the community, personal choice, one of the major Covid-era acquisitions nonetheless massively bolsters Arrie Nel’s e-commerce might, a fundamental capability in order to fully maximise its reach and service offering. “We already had our own online store, that ran directly out of our website and operated countrywide with overnight delivery,” Nel explains. Then last year, which too brought the addition of Dumas, Eland and Nedmed pharmacies in a bumper crop even by Arrie Nel’s standards, came the announcement of its milestone unity with Mopani Pharmacy.

Mopani shares an almost eerily similar history to that of Arrie Nel, beginning with pharmacist-turned-CEO Rob Gibbs opening the very first of its stores in March 1982, in the Pick ‘n Pay centre in Nelspruit, Mpumalanga. “The quaint store had just 100m² floorspace and five staff members,” Mopani details. Its growth was evidenced in different ways to Arrie Nel’s as the years passed, preferring to add increasingly vast amounts of space to its existing sites and so bolstering the capacity for more services and utilities, with its fifth store was launched in April 2021 at Riverside Mall.

“We have brought over the Mopani Pharmacy portfolio, which consists of five large stores which stock practically everything,” Nel unpacks of the deal. “The product listings and offerings Mopani has are very different to those of the typical independent outfit that we take on; in addition to its physical attributes, the minute we brought them over we also immediately incorporated their online offering, which is a huge coup for us.

“Mopani had a huge online store, which actually did far better than ours, and we were the big group of the two” Nel humbly admits. “They obviously did something very right with it, and so over time we will slowly phase out the Mopani name from the website as we make it our own.” While not necessarily marking anything as dramatic as the beginning of a new era, as Nel states, the Mopani addition really does represent a major deviation for Arrie Nel.

“These are really not the sort of stores we typically target,” Nel reiterates, “but they are truly impressive 1,000, 2,000 – even 3,000 m² monoliths – and when they became available we seized the opportunity, as such opportunities are rare in South Africa.” Mopani is not only similar in age to Arrie Nel, it also shares a staunch pride in being known as the local neighbourhood pharmacy, and for Nel the parallels spell a fruitful future.

“Like us, Mopani is committed to offering exceptional service to the community, which will not change,” he closes, “and together we will craft bigger and more exciting opportunities to serve people more efficiently and affordably nationwide.”