When grocery store chain Hy-Vee wanted a software system for its growing in-store dietitian program, the Iowa-based company evaluated electronic health records systems from a number of large software vendors.
But Hy-Vee, in West Des Moines, settled on a system produced by Pittsburgh software firm PHRQL Inc.
“Their product was designed for dietitians specifically,” said Julie McMillin, director of health and wellness programs for Hy-Vee. “It just really fit really well.”
The 238-store chain started using the software this month — making it the second customer of PHRQL (pronounced “freckle”). Its first client was Giant Eagle Inc., the O’Hara-based chain of 231 grocery stores, which implemented PHRQL for its in-store dietitian program in January 2013.
It’s an impressive start for a three-year-old company that works out of shared office space in Oakland and that only recently hired a sales manager. And PHRQL is talking with other grocery store chains, CEO Paul Sandberg said during a recent interview in the company’s one-room office.
The privately held company does not report sales figures, he said, but it is expected to break even by the second quarter next year.
So far, the company has gotten by with $1 million in financing from Innovation Works, the Pittsburgh Life Sciences Greenhouse, Carnegie Mellon University and angel investors. It is raising another $1 million to carry it through next year.
The company is exploiting a niche in the grocery business. Many stores are diversifying into health and wellness with expanded pharmacies, health clinics and nutrition counseling as a way to differentiate their offerings and take advantage of the growing attention to preventing chronic diseases such as diabetes.
No other company makes medical record software specifically for dietitians, which gives PHRQL a “first-mover advantage,” Sandberg said.
“We want to take the product we have, and get as many of the retailers we can under contract, to take advantage of this first-mover advantage,” he said.
Sandberg said industry surveys report that about half of grocery store chains plan to hire dietitians.
“The market isn’t so huge that it’s attracted big competitors yet,” he said.
He estimates the market for selling software to American grocery store dietitians is worth about $40 million a year but “growing very rapidly.”
Hy-Vee employs 200 dietitians who provide counseling at its stores, McMillin said. They use the software to chart sessions with patients, report information to physicians and bill insurers, she said.
“The dietitians say the software has really made their jobs easier,” she said. “They have more face time with customers, rather than being stuck in the office doing paperwork.”
Giant Eagle’s 15 dietitians use PHRQL in the same way, corporate dietitian Caroline Passerrello said.
“Prior to PHRQL, dietitians had been doing paper billing,” she said. “When they came to us with this solution, it met a need.”
Though PHRQL, which has 10 employees and expects to add five to 10 more in the next year, could continue growth in nutrition-counseling software, Sandberg said the most promising market is the $150 billion of personalized nutrition marketing.
The technology is being developed, but Sandberg said a natural extension of its software would be a mobile app for patients that ties together their nutritional counseling record with purchasing information that most stores track through member or loyalty cards.
An example of how it might work: A dietitian recommends that a diabetic patient substitute whole grain bread for white bread. PHRQL would send the patient a coupon for a specific brand of whole grain bread and track whether the patient buys it.
“The opportunity for us is to be able to be a channel for marketing healthier products,” he said. “That’s really where the big market is.”
Alex Nixon is a Trib Total Media staff writer. Reach him at 412-320-7928 or email@example.com.