Perhaps no business is more vulnerable to seasonal cycles than the ice cream business, but Richard Irving, co-owner of the Ice Hut on Washington Street in Hoboken, found a way to “weather” the damages visited upon ice cream sales every year during the winter months.
Each October, when temperatures begin a rapid descent and demand for ice cream slides, Irving and his three business partners (two of whom are his sons) take down the “Ice Hut” sign at their storefront at the corner of Second Street and replace it with a new sign: “Soup Hut.”
For about five months, the store puts the sale of homemade Italian ices and fat-free soft ice cream on hold and sells hot soup and bread until the sun comes back out in early April.
While Irving said his ice cream business is much more successful in the summer than his soup business is in the winter, the annual switch helps keep the Ice Hut afloat during the part of the year when cold weather forces many ice cream stands in temperate climates to either close shop or face losses.
Seven years
When Irving and his partners opened the stand seven years ago, they knew there wouldn’t be much of a market for ice cream during the winter.
Euromonitor International, a global market research firm, estimates that 75 percent of all ice cream sales come between the months of June and September.
Dreyer’s, a manufacturer and distributor of ice cream based in Oakland, Calif., raked in more than two and a half times more in ice cream sales during the months of July, August, and September last year than October, November, and December.
Many ice cream stands similar to the Ice Hut simply close down for the winter, but rather than pay rent on a closed shop and have to lose and then rehire employees every half-year, the Ice Hut’s owners decided to switch to soup each winter.
“Ice cream is a weather-driven product,” Irving said. “We knew the winter wouldn’t do us any good, staying open for frozen ices and ice cream. Somebody came up with the idea to give soup a try. We said, ‘Let’s invest the money and see if it works.’ It worked.”
While certain elements of the two businesses – such as costs, suppliers, number of employees, and the menu – change when the signs change, the ins and outs of running the business are basically the same year-round. “It’s the same thing except for a few tweaks,” Irving said.
This gives the Ice Hut, which employs 10 people during the summer and about half that number during the winter, the flexibility to continue selling ice cream should warm weather extend beyond early October, a solid bonus considering the additional profits ice cream brings the store compared to soup.
While Irving said sales of soup remain strong throughout the winter, the cost of buying soup and keeping it fresh eats into profits far more heavily than the cost of selling ice cream, which is practically non-perishable when frozen.
The cost of selling soup can represent as much as 80 percent of sales, Irving said, while the cost of selling ice cream represents more like 20 percent of sales.
But no matter the weather, the store no doubt benefits from the throngs of pedestrians and bar-hoppers on the 15-block-long Washington Street, the main drag in this mile-square city and one of the busiest commercial strips in the state.
(Incidentally, Hoboken is also credited as the birthplace of the ice-cream cone, although this claim has been disputed.)
Situated in the heart of downtown Hoboken, Irving said the stand’s walk-up window often does well during the city’s fairs, festivals, and parades, such as the Hoboken Arts and Music Festival.
“We get pretty good visibility,” Irving said.
Another Ice Hut franchise on Centre Street in Nutley has begun using the strategy of adjusting foods at the stand to better conform to the weather.
But other Ice Hut franchises aren’t the only ones following Irving’s lead. The Ice Hut’s main competitor is an ice cream stand a block away called Family Scoops, which opened about three years ago and has adopted a surprisingly similar concept to the one The Ice Hut first employed seven years ago.
Around the same time each year, Family Scoops makes the same transition from ice cream to soup.
Irving said he doesn’t feel the heat from doing business right across the street from a Baskin Robbins outlet, and is only slightly concerned about a Ben & Jerry’s set to open two blocks north on Washington Street.
Because the Ice Hut specializes in fat-free ice cream and Italian ices, he figures he attracts a different customer base from those looking for ice cream from Baskin Robbins or Ben & Jerry’s.
“Every time somebody would open up a similar store, it’s going to take some business from you,” Irving said, “but we’re pretty much established there.”