Start-Ups 2010: Gourmet Ice Cream, Served From a Truck
Van Leeuwen Artisan Ice Cream
Co-Founders: Ben Van Leeuwen, 26; Pete Van Leeuwen, 33; and Laura O'Neill, 28
Location: Brooklyn, New York
Funding: $80,000 from friends and family
2009 Revenue: $900,000
Start-Up Year: 2008
Breakeven: Their first summer. They grossed about $425,000, with about $125,000 as profit.
Insider Insight: Low overhead and high quality is a good model. Good Humor trucks are highly profitable, but nobody was selling premium ice cream from a truck.
Blind Spot: Manufacturers prefer the status quo. Few commercial dairies were used to making ice cream without industrial stabilizers and conventional ingredients.
The recipe was simple and pure. The first ingredient: three summers spent driving a Good Humor truck in college. "I realized that a truck is less risky than a storefront and costs less to start," says Ben Van Leeuwen, who traveled the world on what he made while passing out King Cones and Strawberry Shortcake bars.
The next ingredient: an obsession with food, especially of the locally sourced, sustainably grown variety that had long attracted serious foodies and environmentalists and is increasingly being sought by mainstream consumers. "Good food just makes me really, really happy," Van Leeuwen says.
The third ingredient: assembling the right team. He recruited his then-girlfriend (and now wife) Laura O'Neill and his brother Pete. Together, they started grappling with the realities of selling ultrapremium ice cream out of a truck on the steamy summer streets of New York City, where they all lived.
Ben had breezed through a college class on writing a business plan, but the real thing took three months to complete and ran about 60 pages. Ben's sister, a financial adviser, volunteered to check the numbers before they mailed out a few dozen packages to family and friends. The effort pulled in $80,000, with one of the biggest chunks coming from one of Ben's former professors. Ben and Pete's dad co-signed on a $20,000 line of credit in April 2008.
The money was quickly put to work. They bought a truck on eBay for $5,000. But it needed plumbing, a freezer, a generator, and big windows. And because they wanted the truck to reflect the quality and old-fashioned values of their ice cream, they installed new chrome grilles and gave the truck a butter-yellow paint job. Even with Pete's girlfriend doing the hand-painted menu for "mate's rates," the total cost was $45,000.
Meanwhile, the team was taking on an even bigger challenge: No wholesaler sold ice cream of the quality they wanted in the quantities they needed, so the partners would have to make the ice cream themselves. Months of painstaking at-home recipe testing ensued. Setting up a factory was financially out of the question, and most of the commercial dairies the team approached used the same stabilizers and conventional ingredients the partners were intent on avoiding. Eventually, they contracted with Mercer's Dairy, in upstate Boonville, New York. The first run, almost 500 gallons, cost $8,000.
Ben and Laura married in Central Park on June 20, 2008; Pete was the best man. The next morning, they pulled up to a street fair for their New York City debut. That first day, they sold about 500 scoops (one of them to a Whole Foods manager, who later helped them get their products onto the store's shelves). There were glitches, of course: Turns out it's virtually impossible to scoop ice cream if the freezer is set just a few degrees too cold. The three founders, plus one friend they hired on, worked virtually around the clock that first summer, scooping, fixing the cranky truck, and angling for the best corners on which to set up shop each morning.
Still, Van Leeuwen Artisan Ice Cream was a hit virtually from the start. One influential blog, Gothamist, called it "a taste of creamy ecstasy." More media attention followed. That first summer brought in about $425,000, of which some $125,000 was profit. In 2009, with two more trucks in circulation, sales were $900,000, with profit of $300,000. So far, nearly all their earnings have been plowed back into the business.
The partners originally planned to head to warmer climates in the off-season. Instead, they have tried their hand, with modest success, at selling high-end coffee and pastries in winter. In February, they opened a storefront in Brooklyn. This year, with 40 employees during peak season, they hope to bring in $1.5 million to $2 million in revenue. Now that would be sweet.