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Brazil’s Raia Drogasil Makes Creating a Healthy Society a Priority

Raia Drogasil took a leading role during the pandemic to ensure the safety of its customers and employees.

July 2021

The pandemic posed challenges for everyone in 2020, and Raia Drogasil (RD), Brazil’s largest drugstore chain by revenue and market capitalization, responded by taking significant steps to ensure the safety of its customers, employees, and the communities it serves.

Quick Implementation of Safety Measures

The firm adopted rigorous in-store safety protocols for its customers and staff. In one month, 5,000 employees were trained on the new protocols, and its stores administered 1.5 million rapid COVID-19 tests to customers.

RD fully covered costs for any employee who needed inpatient medical care for COVID-19-related illnesses. For employees who had to take temporary leaves, RD continued to offer full pay during their time off and assured people that their jobs would still be there for them when they were ready to return to work.

In 2020, the firm enabled its staff to have 23,000 free medical consultations with Albert Einstein Hospital in São Paulo, which is considered one of Latin America’s best hospitals. It also established an emergency fund to support employees affected by the virus.

At the beginning of the outbreak, RD created the “All Care Matters” fund to serve hospitals in the most vulnerable regions of Brazil. Through the fund, the firm made donations totaling 25 million reals ($4.82 million at current exchange rates) to 51 hospitals outside major urban centers. These hospitals serve 70 million people.

RD greatly enhanced its delivery services, recognizing how important it was for people to receive their prescription drugs and personal care items amid the restrictions on mobility and public gathering. It introduced a free neighborhood delivery service and expanded its same-day deliveries. RD also enhanced its Click & Collect program to enable customers who made purchases online to pick up their items in touchless transactions. For customers who lived within walking distance of stores, employees delivered their prescriptions and other products.

Ready to Play a Major Role in Public Health


In 2020, RD set the goal of becoming the top contributor to a healthy society in Brazil by 2030. That aspiration will require moving beyond a brick-and-mortar retail pharmacy chain to becoming a fully integrated health platform.

The efforts to achieve that goal include offering customers a broad selection of channels to obtain products and medicines to foster their healthy lifestyles. These channels include not only physical stores and websites, but also mobile apps, social media, and call centers. Customers have demonstrated how eager they are to take advantage of these omnichannel offerings. In the fourth quarter of 2020, RD had 7.9 million downloads of its app and 24 million monthly visits to its digital channels.

The distinctions between the virtual and real spaces are becoming blurred as the firm leverages mobile technology to make the in-store experience more agile, effective, and pleasurable for customers.

The firm is drawing on the expertise of its pharmacists to find ways to expand the services offered in its brick-and-mortar stores, so they become genuine health hubs for communities. Many of these services are already offered. They include testing, administration of vaccines and injectables, blood pressure and glucose testing, and telehealth consultations. The firm is also promoting healthier lifestyles by expanding its portfolio of health and wellness products to include more local, organic, vegan, and sustainable items.

Bringing Accountability to Sustainability Goals

Sustainability has been a key goal of the firm for a number of years. In 2020 RD established key performance indicators (KPIs) for each of its business units to measure their progress toward these goals, which center around the promotion of healthier people, a healthier planet, and healthier businesses.

To increase accountability, 7.5 percent of the firm’s senior management’s variable compensation is now tied to achieving these goals. For certain executives in critical units, up to 25 percent of their variable compensation is based on how effectively they reach their KPIs.

Doing Good Is Enabling RD to Do Well

Customers have embraced RD’s efforts to be much more than the neighborhood pharmacy. As evidence of this, the firm’s revenue from digital channels went from 300 million reals in 2019 to 1.2 billion reals in 2020. Even in a challenging year, the firm’s net income rose 2.4 percent, demonstrating the business value of its commitment to sustainable goals.


Sustainable Development Goals

The Sands Capital six investment criteria tend to lead us to businesses that are innovators or vital facilitators of change in industries undergoing significant transformation. RD is one of many portfolio businesses that create impact by addressing at least one major social or environmental challenge identified by the United Nations Sustainable Development Goals (SDGs). The firm’s efforts support various goals including: SDG 3, Good Health and Well-Being; SDG 7, Affordable and Clean Energy; SDG 8, Decent Work and Economic Growth; SDG 10, Reduced Inequalities; SDG 11, Sustainable Cities and Communities; and SDG 12, Responsible Consumption and Production. All data in this article are sourced from Raia Drogasil’s full Annual & Sustainability Report 2020, and its summary.

Disclosures:

The business profiled was selected based on its reported alignment with one or more U.N. Sustainable Development Goals. The views expressed are the opinion of Sands Capital Management and are not intended as a forecast, a guarantee of future results, investment recommendations, or an offer to buy or sell any securities. The views expressed were current as of the date indicated and are subject to change. This material may contain forward-looking statements, which are subject to uncertainty and contingencies outside of Sands Capital’s control. Readers should not place undue reliance upon these forward-looking statements. There is no guarantee that Sands Capital will meet its stated goals. Past performance is not indicative of future results. A company’s fundamentals or earnings growth is no guarantee that its share price will increase. Forward earnings projections are not predictors of stock price or investment performance, and do not represent past performance. The specific securities identified and described do not represent all the securities purchased, sold, or recommended for advisory clients. There is no assurance that any security will continue to be owned by Sands Capital Management. You should not assume that any investment is or will be profitable. GIPS® Reports and additional disclosures for the related composites may be found at Sands Capital GIPS Report. PT #20210134

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