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Selling Ice Cream on City Streets

Iowa lore holds a special place for tinkerers who moonlight in sheds and barns out in the countryside, inventing the new and fixing the old and broken.

My good friend Jim Sjoerdsma and I were a little like tinkerers. Except we lived in town and weren’t particularly good with our hands. So, we called on what we had—college business degrees and our wits. With that, we set out to find a start-up venture that would employ people and might blossom into something that made a profit.

Our early efforts hit far from the dart board. They included survival food for bachelors, a foot massage distributorship and an investment in thoroughbreds.

But we kept at it, founded a small business—a mobile ice cream enterprise—and labored to make it grow and prosper. Our darts were hitting the board.

It helped that Jim knew a little about ice cream.

During two summers in college when I sold magazines farm to farm in rural Iowa, Jim worked on a Stan’s Ice Cream truck that crawled through neighborhoods in Chicago selling ice cream bars and other frozen confections.

Jim and I also knew each other well and so made good business partners. We had attended college together, and by 1988, we had shared a Cedar Rapids apartment for five years, were single, had full-time jobs and miniature schnauzers, and imagined our big business break might yet come.

It was that winter in early 1988 when we decided to buy three used vans and to bring on a third business partner, Jim Turbett, who had handyman skills. He removed the side doors of the vans and built a sales counter in each of them.

We then had the vans painted white and came up with a neat company logo—a small girl leaning forward just enough to give her little dog a lick of her ice cream. The logo on the side of the vans heralded the company name, Peppy’s, in tribute to Peppy, Jim’s miniature schnauzer.

At the time, I was selling insurance for Equitable Life Insurance Co., and I also was heading into my second of 13 years as a House member in the Iowa Legislature. My part-
ners worked at Rockwell Collins. Our signatures on a $35,000 small-business bank loan meant we would find time for Peppy’s, too.

Before our fleet of three vans could take to the streets, we needed a chest freezer for each of them. No problem. We got a great deal on freezers at a going-out-of-business auction.

But we soon discovered that the bargain freezers didn’t have “cold plates,” which were needed so the freezers could keep ice cream frozen throughout a workday. Well, we had a fix for that. We bought and placed gasoline-powered generators in the vans to keep the freezers running. They ran. But the racket from the generators drove the drivers crazy and nearly drowned out the van’s musical jingle that alerted kids that ice cream was coming.

So, we were two for two: bad freezers and generators we couldn’t use.

We also got a first lesson in the world of small business and government regulation. To our surprise, Cedar Rapids and Iowa City had ordinances that banned mobile vendors from selling on city streets. The thought was that small children would dart into traffic and get hurt or killed.

This sent me to the city council in each city to ask that the cities change their laws. One of the advantages of our membership in the International Association of Ice Cream Distributors and Vendors, aside from the annual conventions in Florida or California, was the help the organization provided in making our case. We persuaded the city councils that we had a right to use the public streets and that it would be an unnecessary restriction on free enterprise to deny our request.

Out into the world our ice cream vans finally went in the summer of 1988.

In that first summer, temperatures were at or near 100 degrees on 15 or more days. You’d think that would be a bonanza. But heat like that keeps people holed up in their houses, with the air conditioning on. It’s a killer for the neighborhood ice cream business because the kids can’t hear the van’s music.

From the start, we found dependable, trustworthy drivers to operate the vans and sell the ice cream. In fact, the drivers made more money than us, the owners. What little profit we made, we put back into the business to upgrade equipment and hopefully expand. Sometimes I would drive on a weekend shift to make a little cash myself. I even competed with drivers to see who could sell the most in a couple of days. And I usually won.

By the end of the first year, partner Jim Turbett called it quits, satisfied to take his name off the bank loan.

We ran our vans out of a garage in Palo, outside Cedar Rapids, so we could be next to Tri-County Dairy, where we bought our frozen products.

After the first couple of years, we expanded to seven vans, which operated in Cedar Rapids, Iowa City, Waterloo and some small towns in between. At the same time, we realized our ability to profit and expand further would require us to cut out the middleman, Tri-County Dairy. We needed to buy our products directly from the suppliers, Wells Blue Bunny in Le Mars, Iowa, and Meadow Gold in Des Moines.

However, to buy direct, we had to buy in bulk, and that meant we needed freezer capacity. So we moved our vans to a storage garage complex on the outskirts of Cedar Rapids and connected a semi-truck refrigeration trailer to the power in our leased garage. On delivery nights, we’d don insulated coveralls and move the ice cream from a supplier’s refrigerated truck to ours.

The notion that we were on the right track, that we might yet become ice cream moguls, kept us at it. We began making plans to expand into Des Moines and other markets in Iowa, figuring we needed 30 to 50 vans if we really were going to make a go of it.

That’s when we faced off with local government a second time.

The Linn County Planning and Zoning Department caught wind of our makeshift refrigeration operation and informed us that we couldn’t run a permanent business out of a storage garage facility. I appealed to obtain a variance from the county regulation, but without success. The county officials were nice enough, though, to let us finish the ice cream season.

We renewed our relationship with Tri-County Dairy in Palo and rented out space from the dairy for our vans. But it was a setback, and time was passing.

In the November 1992 election, Republicans secured the majority in the Iowa House, and I sought and was named chairman of the important House Appropriations Committee. It meant I would be busier. At the same time, I changed full-time jobs, moving from Equitable Life Insurance Co. to trucking firm CRST Inc.

Something had to give, and for me, it was Peppy’s. I signed over my company interest to my founding partner, Jim Sjoerdsma, in exchange for removing my name from the bank loan we had gotten when we started the business five years earlier.

Jim ran it another year and sold it to the owners of Tri-County Dairy. The dairy, in turn, sold it, and today, it continues to operate in Cedar Rapids and Eastern Iowa from its headquarters in Vinton, Iowa.

The fact that Peppy’s trucks are still out there is gratifying, knowing that I was part of starting the business almost 30 years ago.

Since the beginning, thousands and thousands of kids—including my five children—have enjoyed buying the cherry-flavored torpedoes, the red, white and blue bomb pops, the fudge bars and all the rest.

At times over the years, I’ve heard the Peppy’s jingle as one of the vans made its way through my neighborhood. And I’ve thought that the vans came and went too quickly. In fact, I’ve wanted to run out and tell the drivers as much. It’s Sales 101 when it comes to ice cream. You need to inch along a neighborhood street to give the kids a chance. At first, parents tend to say no, but that jingle and the wonderful persistence of kids often can pry loose a couple of dollars for some ice cream.

During our biggest year, we had seven vans and 12 to 15 drivers, some earning money to pay for college. Nick AbouAssaly, a Cedar Rapids lawyer, and his brother, Mike, a physician in West Burlington, Iowa, both worked summers as drivers for Peppy’s. Nick and I see each other these days in our roles of mayor, he in Marion and me, next door in Cedar Rapids.

My time at Peppy’s gave me a hard-fought, firsthand view of the tribulations of starting a small business from scratch and working to make it a success.

In the years since, it has been commonplace for me as mayor, and earlier as head of the Cedar Rapids Area Chamber of Commerce, to say a few words as I’ve helped cut ribbons outside new businesses.

Those are always occasions to tell new owners how much the community appreciates their willingness to take the risk and put a signature on a bank loan.

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