Heatwave Brings Blistering Sales to Businesses That Provide Cool Relief
Tom Palchak, manager of Penn State's Berkey Creamery, knows this firsthand. In late June, the ice cream supplier to the university, which also runs a retail store, ran out of eight of its most popular flavors -- including vanilla. He has never experienced anything like that in his 30 years in the dairy business.
"We plugged the dam very quickly and made more that week," Palchak says, adding that sales and production rose about 40% that month. Even now, customers sometimes have to wait 45 minutes for their favorite flavors, such as Peachy Paterno (named after Penn State's legendary football coach Joe Paterno, who's a regular customer.)
Screaming for Ice Cream
Customers are flocking to bigger players as well. Both Friendly's Restaurants, which owns 501 locations in 18 states that serve both ice cream and food, and Rita's Italian Ice, which operates 550 locations in 18 states, have seen a bump in business, according to company officials. Owners of smaller ice cream shops in the Northeast also report that business is brisk.
Richard Peyser, manager of Annabelle's Ice Cream of Portsmouth, N.H., doesn't have time to catch his breath these days.
"Everyone is clamoring," says Peyser, whose shop was lauded by Travel & Leisure for producing some of the country's best ice cream. "I'm delivering to a couple of places (wholesale customers) to tide them over."
Interestingly, the $21 billion ice cream industry is fairly recession-proof. The reason, as Palchack notes, is that it's a cheap treat that a family will splurge for even if they're cutting back in other areas. This trend has been seen as far back as the Depression. About 1.32 billion gallons of ice cream and frozen deserts are sold annually.
Cooling Off at the Seashore
Weather is a fickle friend to many businesses and can cause losses as easily as generate profits. For instance, tourism-related businesses in areas such as Cape Cod, Mass., suffered through a rainy July and August last year. Now, the cooler weather by the seashore is helping draw tourists looking to beat the heat.
"That's not just a line we use," says Kristen Mitchell, vice president of marketing at the Cape Cod Chamber of Commerce, referring to the meteorological phenomena. "We definitely welcome this weather."
Cape Cod businesses are "cautiously optimistic" about the summer travel season, which has also benefited from the Fourth of July holiday falling on a weekend, she says. Mitchell's sentiments were echoed by Vicki Clark, the president of the Cape May County Chamber of Commerce, who added that there were rooms available in this New Jersey seashore region popular with Philadelphia-area residents.
More Air Conditioner Meltdowns
Rising temperatures also boost the bottom lines of the air conditioner and pool industries. Part of the reason is psychological. Anyone considering buying a new cooling system or a pool may be nudged to make a purchase as they face sweltering heat.
"As the temperature goes up, so does the sale of air conditioners, and so do the service calls," says Mary Millmoe, a spokeswoman for United Technologies Corp.'s (UTX) Carrier business. In 2009, Carrier's revenue dropped to $11.4 billion to $14.9 billion.
Joan Schimml, a spokeswoman for Trane (IR), which provides air conditioning solutions and support, says older equipment tends to fail under the strain of larger-than-expected demand. Her company is seeing a rise in air conditioner service calls in the Northeast.
Bowling: A Strike for Heat Relief
Kirstin Piers, spokeswoman for the Association of Spa and Pool Professionals, also argued that it's still too early to know how big of a boon the weather will be for the industry, but "there's definitely a correlation between hot summers and increased pool sales."
This is a change in fortune for the industry, which has been suffering over the past few years amid the worst economic downturn since the Great Depression and the corresponding slowdown in the real estate market. Installations of in-ground pools plunged 58% in 2009, while above-ground installations dropped 28%, the association says. Sales have rebounded this year, Piers notes.
Bowling centers have also been on a roll as people looked to them as source of cheap, air conditioned family entertainment. Henry Lewczyk, vice president for marketing at the Bowling Proprietors Association of America, says his members in the Northeast have noticed a "noticeable spike" in their business, adding: "Extreme heat brings them in, as does rain."