Investor

The Retired Investor: Can the neighborhood ice cream parlor keep trucking? / iBerkshires.com

By Bill SchmickChronicler of the iBerkshires

Richard Rockefeller, the neighborhood man Mr. Ding-A-Ling.

The demise of the neighborhood ice cream truck business has been predicted many times over the years. Higher costs, new delivery methods, and stiff competition from grocery stores and other sources threaten the business. But don’t quite count them yet.

Earlier this summer, the New York Times ran an article titled “Falling Profits Threatens Ice Cream Man,” which prompted me to dig a little deeper into this local business.

Nationally, most ice cream vendors are individual entrepreneurs who lease their trucks from a regional company on an annual basis. Many tenants also buy their ice cream products from the same company. They are responsible for all of their costs, and in an inflationary environment like the one we find ourselves in now, those costs could sink an inexperienced supplier in a competitive market like New York.

The internet and a variety of take-out apps have increased competition with street food restaurants. Walmart sells a slew of Good Humor products, and ice cream parlors promise not just designer ice cream, but all manner of exotic experiences. Illegal street vendors and food carts also offer alternatives and, more often than not, can reduce truck prices.

The sale of ice cream on the street already existed in American urban centers long before the invention of pasteurization. In 1904, the ice cream cone was introduced at the St. Louis World’s Fair. In the 1920s, Harry Burt of Youngstown, Ohio developed a smooth chocolate coating on ice cream that was eaten on a stick like lollipop called Good Humor Bar. Burt bought 12 refrigerated trucks in 1922 so he could distribute his new ice cream bars to neighborhoods. The company expanded its fleet of trucks, especially after World War II when ice cream production boomed. However, the competitive landscape has started to change.

Back in the 1950s, when I was a kid in Philadelphia, the Good Humor refrigerated truck was an integral part of my apartment building. Several times a week a chauffeur in a white shirt would open his back door and for 25 cents would offer me my favorite, the original chocolate covered ice cream bar.

In 1956 the competition came to my neighborhood in Philadelphia. A new ice cream truck entry, Mister Softee (founded by two brothers in my hometown), has arrived with a fantastic new kind of soft serve ice cream. The arrival of this new treat vehicle was preceded by the tantalizing sounds of a catchy melody that could be heard for several blocks.

In my townhouse neighborhood, kids (and many parents) listening to this new ice piper approach, lined up. Everyone had enough change in our pockets to sample these afternoon treats, covered in multicolored candy sprinkles and all kinds of wonderful toppings on many hot summer days.

The Good Humor company eventually sold its fleet of trucks in the 1970s, preferring instead to focus on distributing its ice cream products to grocery stores and other avenues of sale. Unilever bought the company in 1989. Mister Softee trucks still ply the streets. However, over time, ice cream trucks are becoming less and less common. But not in the Berkshires.

Several days a week this summer, as I day traded the markets, the mellow tones of “The Godfather’s Theme” drifted through my windows. In the street below, a white truck of Mr. Ding-A-Ling slowly passes on its usual route.

It is part of a fleet of 66 trucks owned and then leased to independent operators by Brian Collis, the 70-year-old owner of Ding-A-Ling Inc., a family business established in 1972. Based out of Albany , NY , the company distributes ice cream products, which it purchases from the Good Humor Company. Its trucks scour territories within a 150-mile radius, which includes parts of Vermont, Massachusetts and New York. Three of its trucks serve the Berkshires, including Lenox, Lee, Great Barrington, North Adams and Pittsfield.

“It’s a stable and fairly predictable business,” Collis said. He laughs at the dire predictions of his impending demise. “In 2012, when gas prices were $4.29 a gallon, it was predicted that we would suffer and some ice cream trucks would run out of business, but that never happened.”

He admitted that ice cream costs, like everything else, have gone up, but so far customers seem to be accepting the higher prices. As for the independent operators who rent the trucks and sell the ice cream, “I have a waiting list of drivers who want to enter the business”.

I sued one of his independent operators this week. Notebook in hand, I simply followed the music of the “Godfather”. Ding-A-Ling operator Richard Rockefeller has just turned 59 and has been serving the same route for 15 years, working seven days a week. “I’ve accumulated a lot of loyal customers over the years,” recalls entrepreneur with gray beard, neon and t-shirt. “Pregnant mothers were customers then, and now their children are customers too. Just to see these children grow up and the joy on their faces when I come, well….”

Inflation, he admits, has taken a heavy toll on his portfolio. “I spend $210 a week on gas alone. You add the truck lease, local fees, background checks, etc. that I pay, plus everything else, and I need to earn $120 a day just to break even.”

But he doesn’t sing the blues. “I make a good living, but it wasn’t like that at first,” he explained. Years ago, he had to learn where and when to find repeat customers and then stick to a predictable schedule to grow his customer base. “Sometimes when I have a party to serve, my customers piss me off when I don’t show up.”

I asked what drives him to drive and show up day after day. “Three words,” he replied, “it’s fun, enjoyable and it’s engaging.” Sounds like the recipe for success in my opinion.