GO
Loading...

Warm Weather Is a Windfall for Frozen Treat Sellers

The sound of tinny music coming from an ice cream truck is as sure a sign spring has sprung as robins and tulips. So when the temperatures began climbing to unseasonably high levels in New Hampshire in March, Sharon Sweeney sprang into action to get her Kona Ice trucks on the road.

Dairy Queen's 'Blizzard'
Dairy Queen's 'Blizzard'

It was hard work. The trucks needed to be de-winterized. Lines were drained of antifreeze. Equipment needed to be cleaned. Supplies needed to be gathered. But in the end, it was worth it.

“We’ve never had any sales in the month of March,” said Sweeney, who operates three Kona Ice trucks in southwestern New Hampshire. “We’re not talking about boosting revenue; you have to have revenue to boost. This was more of a windfall.”

And customers were glad to see her trucks, especially as the temperature rose to the 80-degree mark.

“People were very happy to see us…it is almost a rite of spring,” she said.

Sweeney was not the only Kona Ice franchisee benefiting from the early arrival of warm weather. Tony Lamb, the founder and president of Kona Ice, said the company’s three company-owned trucks, which sell cups filled with flavored shaved ice, reported sales gains of about 150 percent in the northern Kentucky region where they operate.

But across the nation in the 40 states where it operates, Kona Ice has seen sales climb as much as 50 percent. According to Planalytics, it could be the warmest March since tracking of weather data began 117 years ago.

Kona Ice Truck
Source: Kona Ice
Kona Ice Truck

Lamb said he often tells franchises that about 10 percent, maybe 12 percent, of the business is going to be affected by weather.

“When you are talking about an eight-month season, if you have an early week of snow, or hot weather in March, it will have an impact,” he said.

But even for companies that sell ice or ice cream year round, the business has been better.

Dairy Queen Chief Operating Officer Troy Bader said business trends have been very strong since November due to the mild winter.

“People had a different mindset,” Bader said. “They were out and about more.”

Although Bader said sales were “very strong” in March, he declined to be more specific. But he attributed increased customer traffic at its restaurants to both warmer weather and a strong promotion in March that offered discounts on the chain's popular Blizzard desserts.

Dairy Queen operates 5,000 locations in North America, and sells both food and desserts, which reduces the seasonality of its business.

But it's not just the weather driving sales at these businesses. Consumers are in a better mood. The Thomson Reuters/University of Michigan's final March read for overall consumer sentiment rose to its highest level in more than a year in March as optimism about jobs and income overcame higher prices at the gasoline pump.

Growth at these types of businesses in the first quarter will be flattered further by the fact that the restaurant industry had a tough first quarter last year.

"They are going to see some nice growth," said Mary Chapman, director of product innovation at market researcher Technomic.

Consumers also aresnackingmore, according a recently released Technomic survey. About half of those polled say they snack at least twice a day, compared to just a quarter of respondents surveyed in 2010. While some of that snacking comes in the form of mini sandwiches and wraps, ice cream is a popular choice.

Chapman said consumers are more likely to purchase more involved frozen treats such as milkshakes, ice-cream sundaes and banana splits away from home.

It's also true that the warm-weather trend is helping other business segments. Next week's chain-store sales reports are expected to show warm weather apparel was selling well — and early — at many retail chains.

And even now that the mercury has fallen a bit, it appears that consumers have a case of spring fever and taste for those frosty treats. Sweeney will keep her trucks on the move even though the temperatures have dipped.

"In New Hampshire, if it's 60 degrees, we're still ready for a Kona Ice," she said.

Questions? Comments? Email us at consumernation@cnbc.com. Follow Christina Cheddar Berk on Twitter @ccheddarberk.

Retail