All Commentary
Wednesday, July 24, 2013

The Delightful Merchantcraft of the Shaved Ice Truck

The truck parked at the end of the block is decorated with bamboo, a Caribbean beach scene, and a shades-wearing penguin taking in some rays. Loudspeakers on the truck are playing impossibly fun calypso music you would otherwise never hear. The kids are lining up for their treat, which turns out to be a cup of shaved ice* to which sugary flavors are added at the customer’s discretion.

The scene transforms something that seems, by the facts alone, to be mundane into a real experience that people are willing to pay $5 a pop to obtain. This rolling seller of shaved frozen water in a cup is a mobile production unit of sheer joy—with profits to show for it. 

Seems pretty straightforward, right? Well, thanks to a contact in the industry, I’m in possession of that rare thing, detailed knowledge of the way this business works, and it is anything but simple. It employs all the newest technology, a careful marketing strategy, intricate profit-and-loss metrics, and a great deal of entrepreneurial risk—so much so that if only one thing were out of place, this truck could easily disappear from our suburban landscapes. 

Obviously the stuff is not difficult to make. The syrups are water, sugar, coloring, and a bit of flavor. The ice in the cup is made with a blade that needs to be changed periodically. The truck is not a small capital investment—it’s part of a national franchise—but it is a given once you have it. 

None of these investments make money on their own. You still have to find your customers. And customers move. You have to move with them. 

Geography is everything. Each day the truck’s owners must make the decision about where this truck should drive or park to generate the highest sales. It could be at the public park, a little league baseball game, outside the school during summer school, outside a church social, at a shopping mall, at a daycare, or somewhere around the pools here and there around town. You have to go where you are wanted and not considered annoying. 

If you include neighboring towns within a 45-mile radius, you end up with a seemingly infinite number of possible parking and driving spots. One truck can only be in one place at a time. 

Every day, then, you must choose a location. It’s not an easy choice. It’s almost a guarantee that you will choose wrong some days and make virtually nothing, and that other days you get it right and make thousands of dollars. You hope they balance out. 

If the course of history were on auto-repeat, it would be easier. Whatever worked last week you would do again this week. 

But that is not how history unfolds. The little league game might be packed one day and empty the next. Weather interferes. Vacation Bible School might be crowded on Monday and empty on Tuesday. The birthday party you thought would be a huge scene—or so you were told on the phone by the parents—turns out to be a total bore and a bust. Or the person who called for the truck to show to make the event more fun turns out to have had the wrong date. 

Every wrong choice comes with a huge opportunity cost: You lose all the revenue you might otherwise have made from the right choice. 

This means that the entrepreneurship must never stop. Every day, you scour the papers for information, looking for clues, drawing on experience and intuition, following up on leads, deciding for or against requests weeks in advance that the shaved ice truck be at events. This must happen every day. It is a managerial feat that requires maps, logs, speculation, negotiation, and—always—careful accounting. 

In the end, the truck owner or manager develops deeply intimate knowledge of the whole community within a wide geographic area. In fact, gathering, processing, and acting on knowledge is the real business here. The owner knows its population flows, its demographics, its buying habits, and its moods in various seasons. He or she must be more alert than the local reporter or the city manager, neither of whom put their livelihoods at stake on the willingness of people to throw down real money in exchange for an icy treat. 

You can’t both manage this task and also drive the truck. Your drivers are young and inexperienced because, well, those are the people who are willing and able to do this job. But you don’t know for sure that they will show up. College students, for example, are a bit volatile that way. So you must always be ready to step in and do the job. They might steal from you, so you have to learn to be a good judge of character. And you must find employees who are ready and willing to deal with unpredictable population demographics and insults from passersby.

You send them out on their daily mission. You text the driver’s smartphone at the start of the day; the address must be precise. It is only the first of several in a day that can last for 16 hours. The driver pulls the address out of the text and throws it into the smartphone’s GPS system, which must guide the person to the right place. These are places that the driver is likely to never have been before. Without that navigation tool and its instant ability to explain where to go, the whole process would be slowed down dramatically. Lost time means lost profit. 

There are also mishaps even when the planning is perfect. There was a community-wide movie planned at the public park, and hundreds or thousands were said to be coming. They did indeed come. This looked like a bonanza for the shaved ice business. 

So that that everyone could see the outdoor screen, all the streetlights on the streets were shut down by the city government. That left only one looming light apart from the far-away movie screen: that of the snow-cone truck. 

Nature lovers can guess what happened next. Every bug in the entire county came and attacked the truck. Customers got up from their chairs to get a treat, walked to the truck, and saw it covered in bugs. Just to get to the window, they would have had to fight their way through the thicket of insects. That’s not so appetizing. The entire event that was supposed to be a windfall ended up as a disaster.

Then there’s the problem of fickle customers, who always imagine themselves to be in charge because, well, in the end, they are. One lady at the front of the line ordered her ice with peach flavoring. The peach flavoring had just run out. She started to complain and complain. Others heard her and they too decided that peach was clearly the most desirable flavor. But it was gone. It’s this way: people want most what they can’t get. That one missing syrup ended up casting a wide sense of despair over the gathered crowd. 

It’s no secret to anyone in this industry that these businesses pretty well live on the edge of the law. There are different food-handling regulations in each jurisdiction, and an untold number of other regulations for trucks and sales. The time and energy of compliance isn’t always worth the cost. There is also the reality that many of these trucks barely get by and find that operating at a profit is all about cash: receiving cash, paying in cash, buying supplies in cash. If you have a candid talk with an owner, you will quickly find that there would be no other way. 

Keep in mind that this is an implausible business at its root. You can buy endless treats at the store. You could get crushed ice out of your own refrigerator. You can even buy shaved ice kits for home use. Or you can do without. The profitability of the operation depends fundamentally on the great illusion, if you want to call it that, that people can obtain fun and joy from buying ice for $5. And you know what? They can and do, or else they would not continue to keep this little industry in play. 

The value is not in the ice, the syrup, the truck, or the music. It’s in the human mind. It takes a certain kind of genius to tap into it and make it real. That genius has been responsible for the creation of a franchise called Kona Ice that operates in 41 states today, each franchise independently owned but using the brand capital built up over time. Kona Ice is on its way to being a big business, but is there really such a thing? The business really takes place one customer at a time.

Does the customer or the onlooker see any of this behind-the-scenes activity? Not at all. They see a silly looking truck driving around playing silly music and otherwise think nothing of the trials and tribulations of the enterprise itself, which, in the end, will make no one a millionaire. 

Why do people do it? It has something to do with the desire to specialize, to master something, to serve others, to make a go at a business you can call your own, to treat every day as a new day full of promise and hope. It’s merchantcraft. And it’s a beautiful thing that makes the world a better place.

*Author’s Note: Technically, it should be “shave ice,” not “shaved ice,” but language has anarchic tendencies.