In July 2011, Juan M. Ortiz was promoted to chief executive of Navarro Discount Pharmacy, where he has been focusing on executing the company’s expansion plan, identifying new revenue streams and increasing profitability.
Ortiz joined the company as chief financial officer in 2008, after serving as chief executive of Atlantic Dental, a portfolio company of MBF Healthcare Partners, Navarro’s majority owner. Ortiz successfully grew Atlantic Dental and sold it in 2008.
To learn more about Navarro’s aggressive growth strategy, we asked Ortiz a variety of questions, to which he responded via email. Here are his responses, edited for space.
Q. Please tell me about the ownership background of Navarro, from its inception to today.
The Navarro family opened its first pharmacy in Havana in 1940, which became a staple in the local community. The family soon opened a second store and the business gained a reputation for being among the best on the island offering a large assortment of products catering to the health and wellness of customers.
In 1961, after the Castro regime confiscated the stores, the Navarro family moved to the United States and opened the first Navarro Discount Pharmacy in the heart of Miami’s Little Havana, a location that allowed the company to mix its culture and diversity of products with a new and expanding market. Over the next 45 years, the Navarro family grew the business to a chain of 20 retail pharmacies around South Florida.
In 2007, MBF Healthcare Partners, headed by its Chairman, Miguel B. “Mike” Fernandez, purchased majority ownership of Navarro Discount Pharmacy with the vision of growing the business to the next level. Since 2007, the company has expanded its retail pharmacy stores to 33 locations around South Florida, has a rapidly growing specialty pharmacy division, launched the first multiple category bilingual brand (Vida Mia) in the U.S., and expanded its ancillary businesses including its wholesale and export division.
Today, Navarro Discount Pharmacy is the largest Hispanic-owned and Hispanic-focused retail drug chain in the U.S.
Despite its success, the company still considers itself a community pharmacy focused on customer service and providing its customers with a large assortment of products at great values. Navarro Discount Pharmacy remains committed to improving the health and wellness of the families it serves.
Q.. Please tell me about your own background and how you got involved in Navarro?
A. I originally joined Navarro Discount Pharmacy as its CFO in August 2008, having been specifically recruited because of my expertise with complex businesses and operations. I was promoted to CEO in July 2011 after successfully turning the company around financially. Since taking over as CEO, I have focused on execution of our expansion plan, identified new revenue streams and increased profitability. Prior to Navarro, I was CEO at Atlantic Dental, Inc., a $40 million dental health provider that worked closely with health care plan providers and the State of Florida. As CEO, I successfully grew the business which was sold in 2008.
Q. What is the company’s overall strategy in targeting the Hispanic market?
Navarro Discount Pharmacy caters to the broad Hispanic market with a great value proposition on a very large assortment of products and services that are not found in traditional drugstore chains such as wireless phones, designer fragrances and a wide variety of ethnic products. As a community pharmacy, we constantly emphasize that nothing is more important than serving our customers and patients.
Navarro’s growth over the years is due to its loyal customers, valued vendor partners and dedicated workforce, who faithfully support the business. Navarro continues to offer a welcoming environment for customers, patients and employees, offering personalized attention in addition to nurturing the roots and traditions it was founded upon. I like to say that we give those who walk through our doors a taste of home. Focused on our customers’ and patients’ needs, Navarro Discount Pharmacy is constantly improving and enhancing the overall shopping experience.
Over the years, Navarro has established numerous convenient time-saving functions and created unique opportunities to improve the health and wellness of customers and their families. Navarro’s unique pharmacy services for patients include a pediatric window for busy parents, compounding pharmacy services, a free Diabetes Club for adults and children with diabetes, a “Mommy and Me” Club and free prescription delivery for all patients. As a community pharmacy, our stores have a large assortment of OTC and vitamins/supplements and frequent in-store health screenings as part their Wellness Wednesday program.
Q. How many stores do you have today and how has Navarro expanded its stores in recent years?
Celebrating over 50 years in business, Navarro now has 33 stores in south Florida and is a major employer with more than 1,500 local employees. We opened two new stores in 2012, one in Pembroke Pines, and the other in Kendall Lakes. We just opened one located at 3105 NW Seventh Street in Miami on April 12, where we invested over $1 million and created 30 new jobs in the community.
Q. How do you choose the areas to place your stores? Are there certain demographics you target in those areas?
We are a community pharmacy and, as such, we cater to the neighborhoods and businesses around our stores. Although the majority of our stores are located in densely populated Hispanic areas, we have learned over the years how to adapt outside that demographic. For example, the NW Seventh Street store, which opened last week in Miami, targets Hispanics from the Dominican Republic, Puerto Rico and Cuba while our North Miami store aims to meet the needs of the Haitian community, and the Homestead store has many Mexican products. Each of these stores are stocked with hard-to-find ethnic products from the countries of origin, i.e. food, beauty products, citrus drinks, wine, etc.
We also further differentiate ourselves by being a value destination and by offering many products and services that are not found in traditional drugstores. We have also started introducing new departments such as self-service copy centers, green centers and a cafeteria.
Q. What are your plans for new stores this year and in the upcoming years? Do you want to enter markets beyond Miami-Dade and Broward, and if so, where?
Our target is to open two to three new stores a year. We analyze market, economic and demographic data very closely and adjust our strategies accordingly. Potential new store sites are being identified in underserved areas in Miami and outside south Florida in Tampa and Orlando.
Q. In 2011 you launched a bilingual private label brand of products, Vida Mia (My Life). What are the results of that launch? Where are the products sold?
Vida Mia is the first private label bilingual brand in English and Spanish for the Hispanic marketing. Now with more than 1,000 SKUs available, the product categories are: Mi Casa (Home);
Mi Cuerpo (Body); Mi Salud (Health); Mi Bebe (Baby);
Mi Belleza (Beauty); and Mi Sabor (Taste).
To develop Vida Mia, Navarro held extensive market research with focus groups inviting U.S. Hispanics from diverse Latin American nations, testing out logos and colors that might appeal to multiple nationalities. We were careful to avoid products that featured the colors of just one Latin American country’s flag. The final purple, yellow, white and red design of Vida Mia proved festive, attention-grabbing and popular for everyone. Vida Mia is often referred to as “the people’s label.” Wording also was studied. Because fruits, teas and other items often carry different names in different countries, Navarro hired professional translators to use the most neutral, recognizable words both in Spanish and English. Navarro has good reason to move fast as private labels products or services made by one company for offer under another company’s brand are trending in U.S. retail today.
In 2012, Vida Mia produced more than $6 million in new revenue from in-store sales in stores, online at Navarro.com and wholesale through Hispanic retailers in the U.S. and the Caribbean through our wholly owned subsidiary, Magellan Distribution.
Q. How about your pharmacy operation. Is anything new there?
A significant investment in technology and training has allowed for pharmacy operations to fill most prescriptions in 15 minutes or less and deliver prescriptions to customer’s homes or businesses at no cost. Customers can also conveniently manage their prescriptions or view their prescription history via the Navarro Rx Mobile Application for smart phones or online at Navarro.com. Above and beyond convenience, Navarro takes pride in offering personalized medications through its Compound Pharmacy division for those customers with special medication needs. Our highly qualified, licensed and board-certified staff provide in-store immunizations for flu, shingles and pneumonia.
In 2012, Navarro launched Navarro Health Services and a Fulfillment Center Facility at its headquarters in Medley. This process gives Navarro’s in-store pharmacies the opportunity to improve patient care and maximize efficiencies thereby providing its pharmacists with more quality time to spend with patients. The process is seamless and allows patients to order their prescriptions in person, via telephone or online while decreasing wait time at store level for all new and acute prescriptions. Navarro Health Services registered pharmacists fill prescriptions on a high volume basis. Some of the specialty prescriptions Navarro Health Services is able to provide specialty medications on a wide range of disease states including oncology, HIV/AIDS, hemophilia, multiple sclerosis, Crohn’s disease and rheumatoid arthritis.
Q. Please tell me about your financial results and your projections for this year?
A. Sales for 2012 were $349 million, an increase of $21 million or 6.4 percent over 2011. We are projecting sales of $387 million for 2013.
Q. How was the company able to withstand the Great Recession - what is the secret of your success?
A. At the time the recession in 2008 and 2009, I was Navarro’s CFO. The recession impacted south Florida and the Company acutely. Over the next 24 months, I worked side by side with other members of the Company’s management team to restructure operations. My team and I helped to stabilize sales and customer traffic during the recession, reduced operating expenses by $10 million in a 24 month period, and worked with the owners to recapitalize the company. At that time we also identified approximately $8 million in new revenue streams and fostered a team oriented environment focused on collaboration. The secret to any business’ success is simple - give the customer what they want. Throughout this time period through today, we remain focused on our customers.
Q. Where do you see the pharmacy industry headed in the next decade?
A. We view ourselves as an integral part of the health delivery system. It makes sense since Hispanics and many others look upon pharmacists as their neighborhood “doctor”. We are dedicated to the goal that our pharmacists being service driven, not product driven. Allowing the registered pharmacist more time to spend with the patient on one-on-one consultation is our goal. We are developing collaborative agreements with physicians, immunization programs, providers of 340B drug programs and acting as in house pharmacies at certain local clinics.
In response to customer service needs and technology trends, Navarro’s Central fill facility has successfully allowed pharmacists to spend more consultation time with the patient on both acute and chronic illnesses. Our Specialty Services help manage more complex diseases both from an educational perspective as well as financial support through different foundations. Our Call center services include electronic and telephone refill reminders and drug regimen reviews.