Village Pantry: True To Its People
By Renee M. Covino
Regional c-store operator Village Pantry has the advantage of just that: playing specifically to its consumers in the Central Indiana/Western Ohio regions.

Full-sugared soda pop, tobacco and the lottery — these are the mainstays of Indianapolis-based Village Pantry LLC. What’s more, “We still do well with fried chicken and doughnuts,” maintains Kent Raphael, vice president of merchandising.
If this sounds like a “business of vices” — so be it. The Central Indiana/Western Ohio chain is not ashamed of the fact that it continues to stay true to a Midwest clientele that is “pretty traditional” in the c-store sense of the word, candy included.
“If our customers wanted $8-a-pound candy bars, I’d put them in, but they don’t,” says Raphael, an 18-year veteran of the convenience store industry, formerly a director of purchasing for one of the largest independently operated convenience store chains in the country, The Pantry, with over 1,400 stores — not to be confused with the more modest-sized chain he merchandises now. The Village Pantry, with 154 stores, is a division of Marsh Supermarkets (one of the largest regional grocery chains in the United States), but the c-store operation is run completely independently from the parent grocer, despite the fact that the sister grocery and c-stores may sometimes operate in the same shopping center lot.
When it comes to candy, Village Pantry customers are not likely to jump on any health or premium chocolate bandwagons that have been making their way across the country lately. Despite the highly touted dark chocolate craze, “milk still dominates the rack in our stores,” says Raphael. “A lot of people around here don’t like dark chocolate, and we don’t see a wave of customers buying it for health values. We also don’t have people clamoring for premium candy.”
But just because this chain’s core customers are traditional in taste, that doesn’t give the candy racks, or any other rack in the store for that matter, license to remain stagnant. It actually works quite the contrary at Village Pantry, which stays true to its customers by keeping up with their tastes, and adjusting merchandise sets accordingly.
Moving with Marsh
While Village Pantry LLC is run as an independent division of Marsh Supermarkets Inc. (both headquartered in Indianapolis), it will be part of the deal when the parent company is sold (most likely in October) to equity investor Sun Capital. “They’re supposed to invest in and grow the business,” says Kent Raphael, vice president of merchandising for Village Pantry. “We just go along with the sale.”
Going back to the chocolate example, “specialty bars come out all the time, especially from Hershey and Mars,” according to Raphael. “I don’t think our customers mind trying something different, but primarily what they try is still milk chocolate.” And Raphael knows this because the chain reviews its mix annually, with a six-month evaluation in between.
“We do a major reset every year — it was strategically timed around the Candy Show in June — but we will move it in the future with the show’s move,” says Raphael.
Not unlike other retailers who have been in the candy business for awhile, Village Pantry has noticed taste and flavor preferences change slowly over the years.  “Twenty years ago, the Cherry Lifesaver was a big deal; today it’s not, and that kind of change happens very subtly,” says Raphael. In the gum section, Juicy Fruit and Doublemint are still top sellers (Doublemint is in the top five) “but brands like Orbit and Polar Ice” are clearly on top now, according to him.
A Peek at the Pantry’s Candy
Village Pantry’s newest units run about 4,000 square feet and feature full-size coolers with 12 to 14 doors.

The main candy section (typically 12 feet) is strategically positioned so that “when you walk in, you see it,” says Raphael. There is also an eight-foot “back” candy section, a candy end cap, candy counter racks and additional candy merchandised up front. “Candy has a very prominent place in our stores; we listened closely to a Mars’ study that concluded 90 percent of candy purchases in c-stores were impulse purchases, so we feel we have to have all these locations,” he continues. “Consisting mostly of impulse business, candy needs to be spread well throughout the store.”

 The candy endcaps and counter fixtures are constantly changing, not just their mix but the actual fixtures and locations too, while the space allocation for the main candy set and for peg candy doesn’t change — just the mix.

“We’ll have a Mars primary endcap for a while, and then we’ll switch out. Right now we have one from Hershey,” Raphael explains. “It’s a completely different fixture, signage — it’s completely different visually. We’ve been bouncing back and forth between the two right now.”

Eighty-five percent of Village Pantry’s candy mix consists of chocolate — and it can always be found on counter racks, end caps and up at the front counter. Where there is one shelf devoted to non-chocolate items in the regular candy set, there are three shelves dedicated to chocolate, but as Raphael has already pointed out, it’s mostly of the milk variety.
“When we’re working on a candy set, we’re not so much trying to get every new item out; we can’t, there’s too many,” Raphael says. Instead, “We have to be keenly aware of the changes in shifting consumer preferences and alert to our customer preferences. Many times, it’s very gradual.”
 The major annual reset is a time when the Village Pantry formally sits down and examines all candy category numbers. Six months later, it informally evaluates “what else is out there, if a particular manufacturer has come out with something our customer would like, and if we need to conduct a minor reset at that time,” according to Raphael.
At press time, here’s how some of the categories were panning out, in Raphael’s words.
One Midwesterner’s Candy Concerns
C-store operators love to sell candy, but they have industry concerns that aren’t so sweet. Kent Raphael, vice president of merchandising for Indianapolis-based Village Pantry admits that two issues come to mind when he considers the current challenges being faced by the confectionery market: health and consolidation.

As for the health issue, “I think the industry needs to be careful not to overreact,” he begins. “It’s good to have healthy alternatives available, but not at the expense of the core business. There has to be a balance.”

Raphael’s other concern — that there will continue to be “too much consolidation” with large candy brands. As he sees it, larger companies take a longer time to push out innovation — “and as small companies get drawn into large companies, a lot of innovation will fade,” he says.

He mentions beverage brands that succumbed to this, “and now they’re no longer edgy or exciting,” he believes.

Tied into these consolidation challenges, Raphael is somewhat concerned about the domestic candy business. “There were a lot of foreign players exhibiting at the last candy show, and I don’t know that I want to buy gummies from Singapore,” he admits. “My hope is for a continued strong, viable confection industry right here in the U.S.”
Mints/gum is “where the bulk of the change is. Right now there are more new items in gum and mints than chocolate. It has changed to be a bit bigger business in the sugar-free items. Tic Tac, Breath Saver and Mentos seem to be on top. Eclipse mints are doing better than expected.”
Sugar free is “doing much better than it used to. Innovative Candy Concepts has come out with items that don’t have refined sugar. The Too Tarts Goo and other items without refined sugar are in the top 20, so we see some growth there. They are geared to little kids, but we see our parents picking them up, too. It’s certainly an important-enough category to make sure it stays up-to-date.”
Chocolate — “not a lot seems to be happening here. Reese’s Cups and Snickers are still on top. Three Musketeers is strong.”
Non-chocolate “has not produced many surprises, except one slice of a surprise is that Starburst is no longer number one. Mike and Ike and Baby Bottle Pop are on top.”
Theater boxes “are doing very well. We are located near a lot of movie theaters, so we’re probably providing a good amount of candy when our people go to the movies.”
Bagged/pegged candy “continues to be strong for us, and that is dominated by Reese’s Pieces. It’s probably No. 1 right now. Two-for-a-dollar items from Sathers also are strong, especially with gummy items. In branded selections after Reese’s, Jr. Kisses are doing well, then M&M peanut, Sour Patch Kids. There’s a good mix of chocolate and non-chocolate.”
Private label is non-existent at Village Pantry for “volume and purchasing reasons. We have 154 stores; that’s not enough volume, plus I don’t know if we could come up with private label bagged candy that’s better than Sathers.”
100-calorie bars/nutrition bars — “I don’t boycott them, but they just don’t sell like the richer items — chocolate and cookies. Most of our customers see them as tasteless and lifeless. There’s really no volume to speak of in the category for us.”
About Those Snacks . . .
How does Kent Raphael feel about the All Candy Expo adding snacks to its show in September next year?

“I’m happy about it,” he says. “I’ve been able to attend every Candy Expo since its inception. I’ve been on the retailer advisory committee, and I always felt snacks should be a part of it.”

He has two reasons. “Primarily, it will make the trip more efficient for us,” but he also believes it will put much-needed new variety back into the industry.

“Candy is fun; it’s a great-selling category with great profit margins, and I will never tire of it,” he begins. “But with the advent of food bars and nutrition bars — they have sucked some of the life out of it. I think snacks will help breathe new life back into it with manufacturers putting more of the emphasis on fun again.”