Field Intelligence targets 11 African cities to expand its pharmacy inventory-management service

Pharmacies in Africa struggle with access to finance, but inventory management is really what bogs them down. How do pharmaceutical retailers know how much stock they need? How do they know which products to stock at a given time? How do they know what products aren't selling?

At the moment, there's not enough data to answer these questions. Cash gets tied up; there are more or fewer products than are needed at a particular time. If it's the former, they run a risk of selling expired products. If it's the latter, patients can't get what they need.

Field Intelligence is digitizing this supply-chain process to help African pharmacies sell better. The company, which started in 2015, was government-focused and tried to tackle the challenges facing the public health supply chain in Nigeria's capital city, Abuja.

Co-founder and CEO Michael Moreland said he noticed that independent pharmacies in Abuja faced similar challenges to the government-owned ones. After building a SaaS platform to manage complex and large-scale pharmaceutical distribution for the government, the company decided to branch out into the private space.

In trying to solve that supply-chain problem, Field Intelligence shifted from strictly being a software company to become a pharmaceutical distributor using technology to reimagine how the value chain works.

Field Intelligence launched Shelf Life in 2017 as the standalone product to handle this transition. Up until now, they had operations in Abuja, Lagos and Nairobi. The product aims to solve the inventory problem across Africa's $65 billion pharmaceutical market. Today, the company announced its expansion into 11 cities across Nigeria and Kenya. The seven cities in Nigeria include Delta, Edo, Enugu, Kaduna, Kano, Kwara and Rivers. In Kenya, it's Eldoret, Kisumi, Mombasa and Naivasha. The expansion will build on Field Intelligence's more than 700 existing pharmacies, which have served over 1.4 million patients so far.

Shelf Life takes the burden and risk of inventory off the pharmacies. It manages forecasting, quality assurance, fulfillment and inventory management via a subscription service. Pharmacies sell Shelf Life-supplied goods on consignment through a pay-as-you-sell program, avoiding expiry risk and accessing a cheaper alternative to working capital finance. The company claims that this model allowed pharmacies to grow an average of 25% CAGR.

We launched Shelf Life in 2017 to allow pharmacies to outsource their supply chain to us. And it really just grew very organically from there," Moreland said. And as we built up, we expanded down to Lagos and eventually to Nairobi to see if it would work in East Africa in that context, and it did. We haven't looked back since then. The future of the business is in the private pharmacy market."

Field Intelligence concluded its first round of outside capital in March last year, a $3.6 million Series A. The money was raised for expansion, but the pandemic stalled that plan. Field Intelligence went back to work by the end of Q4 2020 and planted the initial seeds of what has grown until this moment.

Importance of data in Field Intelligence's operations

This expansion comes a year after the company experienced rapid sales and Shelf Life membership subscriptions. Sales grew by 47% in Nigeria and 65% in Kenya, selling over 586,950 products in 63 different product categories.

By using data to optimize predictions and identify irregularities in the market, Field Intelligence met the demands for prescription and over-the-counter drugs. But how does it receive and aggregate this data?

We see that as a math problem. And that starts with having really great data about what's selling across a wide number of locations and different seasons, across a wide formulary of products," the CEO said.

A Shelf Life agent

When Field Intelligence introduces Shelf Life to a pharmacy, it takes over its supply chain and inventory management processes. The company has fulfillment partners to manage the pharmacy's stock counts, inventory management and merchandising.

Data about stock positions and movements at the retail level comes from a wide array of locations. Thus, the company can build a proprietary dataset that shows pharmacies in real-time, providing insights into demand. With that, Field Intelligence provides visibility and control of pharmaceutical procurement and inventory management. This eliminates frequent over- and understocking; pharmacies can change products or prices based on the information available.

The fulfillment partners operate an asset-light model, which Moreland said allowed the company to build a scalable and intelligent distribution service that operates lean but yet creates a lot of value for the patients and retailers."

I can say that our level of the value chain here as sort of this tech-enabled distributor, there's nobody that operates at this level of the supply chain in so many cities," he added.

Shelf Life is currently being used in more than 700 pharmacies across Nigeria and Kenya. The company says Nigeria has more than 4,500 registered pharmacies and over 15,000 drugstores; while Kenya has 6,000 registered pharmacies. So there's plenty of market share to capture. By next year, Field Intelligence plans to surpass 2,000 Shelf Life pharmacies and drugstores. By 2025, the company is targeting 12,000 pharmacies and drugstores.

Moreland said that the company has grown 5x in terms of recurring revenue, adding that Shelf Life has sold more drugs and served more patients in the last three months than its first three years of business.

While Field Intelligence is looking to tackle inventory management with Shelf Life, Moreland believes the company is also effectively solving a finance problem too because it provides an alternative to traditional financing options by lowering the cost of running a pharmacy.

One of the big value propositions for us is that because we are selling on consignment, we free up a lot of working capital for the retailer. So in the market, we're broadly seen as a financial services provider and a form of alternative finance for our pharmacies. And I think it's a big part of our story because when you compare the cost of joining Shelf Life to accessing the equivalent amount of working capital from microfinance or traditional bank, even concessionary lenders, we can be 60 to 80% cheaper with far more value-added services," he said.