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SMALL BUSINESS

Mobile ice cream vendors on a rocky road

Truck drivers' sales have fallen amid the recession, while job cuts are drawing more people to the business, boosting competition.

July 21, 2009|Cyndia Zwahlen

After he was laid off last fall from his job driving a delivery truck, Ricardo Lara couldn't find another full-time position that would pay the bills. So he went into business for himself driving an ice cream truck.

At first, he was making as much money peddling Heath bars, Bomb Pops and ice cream sandwiches as he did at his old job. But that didn't last.

As the economy melted down, so did sales, despite his seven-day workweek plying the streets of South Los Angeles.

"I have a good route, but people always complain, 'Why so expensive? I can't buy right now because I've been laid off from work for three months,' " Lara said through an interpreter. "Before the recession, it was a good way of making a good living."

As job cuts or reduced hours have sliced into incomes, more people have turned to mobile ice cream sales, lured by the low start-up costs and minimal skill requirements. At the same time, ice cream truck sales have declined 25% or more in some areas, industry executives and truck drivers say, a change for an industry that has considered itself recession-proof and ice cream an affordable luxury.

Across town, the upscale King Kone Ice Cream Co. truck launched last year by Teddy Lawrence and his wife, Naimeh, also has felt the recession's chill.

Sales were encouraging when they first rolled out in their shiny, butter-yellow van in January 2008. Lawrence was successful enough to quit his day job as a teacher.

They had designed their ice cream parlor on wheels to appeal to an adult crowd, especially at special events, with sundaes and soft-serve cones dipped in premium chocolate.

But the couple soon found they had to hit the streets to keep cash flowing, focusing on business and museum crowds along Wilshire Boulevard and posting the truck's changing location via Twitter.

Sales began to warm up this spring, but the Lawrences can't yet rely on parties to keep afloat, so they continue their business route.

"Having to drive around in neighborhoods with the music on -- that's what we are trying to avoid," said Naimeh Lawrence, who envisions owning a fleet of specialty food trucks some day. "It's a lot more work and a lot less of a payoff."

Many neighborhoods these days are hearing more tinkling music from ice cream trucks because "during tough times, people become creative," said Nick Nikbakht, owner of Golden State Ice Cream Co., a distributor in San Jose.

"This is one way they could get off welfare and not sit on their butt and blame other people, not to mention to bring fun to people," said Nikbakht, a former ice cream truck driver and past president of the International Assn. of Ice Cream Distributors and Vendors.

The trade group doesn't track industry data, but Mike Johnston, president-elect of the association and owner of distributor Southern Ice Cream Corp. in Stafford, Texas, said the industry had seen an increase in newcomers mostly where unemployment rates are high.

That would include Los Angeles County, whose official unemployment rate soared to 11.3% in June from 7.4% a year earlier.

Continental Ice Cream Co. in Los Angeles is an ice cream products distributor and one of the 34 overnight parking locations approved for ice cream trucks by the Los Angeles County Health Department. Almost all of Continental's 70 parking spots are rented, manager Mauricio Funes said.

A sister company of Continental has boosted its supply of ice cream pushcarts because of demand from people looking for unskilled work, he said. Last year, the company was running about 15 carts a day. On a recent weekend, 50 of the 55 carts were spoken for, he said.

"This year, a lot of people come and ask for a job," said the former ice cream truck driver.

Back East, there are still some large fleet operations. But in Southern California, independent operators like Lara are the norm.

Although the costs to get started as an independent operator are low compared with other businesses, they can still be a hurdle. Outfitting a used truck to sell packaged ice cream costs as much as $5,000, Funes said. A truck equipped to sell the soft-serve variety can be five to seven times more expensive.

Many vendors rent their trucks. Lara, for example, said he pays Funes $350 a week to rent his truck. He pays an additional $140 a week to park it at Continental. Such commissaries are required to have facilities to wash the trucks and access to hot water, among other things.

Vendors filter in around noon to buy the Popsicles and other items they'll sell until about 9 p.m. They have to buy their ice cream from the commissary where they park. Most head out around 1 p.m. There are no assigned routes.

Sometimes they return with graffiti or other damage inflicted by competing vendors angry over a perceived invasion of turf. Competition from newcomers is not appreciated.

The vendors are sometimes targeted by criminals. A female vendor recently was robbed at a stop in downtown Los Angeles, Funes said.

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