Have you ever watched The Great Food Truck Race? It’s hosted by Tyler Florence on The Food Network, and pits four culinary teams in a competition to see who can budget, cook and promote their fare to customers across the country, to win a $50,000 prize. Food trucks are trending!
One of the first things you notice on the show, is how eager consumers are to line up for food truck fare. While mobile food service is nothing new, food trucks have established a unique and trendy cultural identity in the United States. Not only are they fast and convenient, but they provide an opportunity to try scratch kitchen quality entrees that are unique; often sampling from fusion to rich international flavors.
The food truck business has become so lucrative and popular, that many cities are rushing to adapt new mobile kitchen legislation to make operating a food truck within cities more feasible. Other communities have created designated food truck parks, where licensed vendors can set up to provide unique food service opportunities that tourists (and locals) love.
Established restaurants are also getting on board with their own satellite located food trucks, which help to expand the revenue for the restaurant, while ingratiating new customers to the rich local menu that they are providing. By having one or more food trucks, many restaurants have rapidly grown their customer base, brand recognition and foot traffic to the principal location.
What kind of operational and promotional strategy does it take to start a successful food truck operation? How can aspiring entrepreneurs expand with a fleet of food trucks, and establish a successful brand and restaurant through mobile food service? In this article, we’ll talk a little about the culture of food trucks, successful menu design and trending foods that are leading the way to higher profit margins for food service business owners.
Statistics About the Food Truck Industry in America
Are food trucks a passing trend, or a rapidly growing business opportunity that has staying power? According to recent food industry reports and studies, dining al fresco, the food truck presents a unique opportunity to try fare that differs from fast-food establishments, and consumers love the convenience of being able to walk up to order something tasty and unique.
A recent survey published by the National Restaurant Association (NRA) revealed some interesting data. Did you know that individuals aged 18 to 34 years represented the highest volume sales, preferring to purchase a meal from a food truck, rather than visit a fast-casual or fast-food restaurant? Only 30% of respondents over the age of 65 had eaten at a food truck, or visited one, as they demonstrated a preference for sit-down service.
One of the most interesting discussions in the NRA food truck survey, was that consumers wanted to see food trucks owned and operated by their favorite local restaurants. A recognized brand and the convenience of accessing quality meals (without having to wait for table service or availability) was a preference for more than 50% of survey respondents.
In 2015, the value of food truck sales exceeded $856 million dollars. This figure includes both dry snack and beverage providers, and full-service mobile kitchens, and industry forecasts predict that food truck revenues nationally will approach $1 billion dollars annually by the year 2020.
In a recent survey of over 300 food truck owner-operators in Texas, California, Oregon, New York and Florida, the vendors reported average income data from single food truck operations (including food trailers). Owners in the survey from Food Truck Empire were successfully operating their food truck for more than two years.
Annual income averages were reported and reflect the revenue potential of a single food truck/trailer operation, owned by a sole proprietor.
- 08% reported earnings of $100,00 to $149,000 per year.
- 4% of food truck owners surveyed, earned $150,000 to $199,999 per year.
- 52% earned over $200,000 per year.
- 76% reported average earnings of $50,000 to $99,999 annually.
- Only 3.59% reported annual incomes of less than $50,000.
National revenue averages for professional food truck vendors vary from $5,000 per month to over $20,000 in monthly sales. And when you consider the lower overhead costs of owning and operating a food truck versus a brick and mortar dine in or take out restaurant, the profit margins alone are part of the steady growth of food trucks within the U.S. food service industry.
Start Up Costs and Purchasing a Food Truck
When you compare the costs of getting into a leased commercial space for a restaurant, a food truck requires less investment and operating costs in general, making the business opportunity highly attractive for start up entrepreneurs. Remember, you are not just running a food truck, but you are creating an independent brand identity and processes to run a successful small business.
Some business owners prefer to purchase a new food truck with all equipment installed, while others shop for reasonably priced and gently used food trucks. For reliability of the vehicle and less downtime, more food truck owners start by investing in a new vehicle with a warrantee to optimize operational time and profitability, so we’ve based our start-up pricing on a new business equipment acquisition model.
- Food truck with appliances, propane and electric hook up $30,000 and up).
- Branded truck wrap (advertising and theme to exterior of truck ($2,000 to $5,000).
- Permits and licenses ($1,000).
- Cash register ($1,000).
- Initial food supply and beverage stock including condiments and seasonings ($2000).
- Uniforms or branded t-shirts ($500).
- Signage for menu and standing chalkboards ($500).
- Cooking utensils, frying and bakeware ($1,000).
- Disposable flatware, paper plates and beverage cups ($500).
- Fire Extinguisher ($300).
- First Aid Kit ($150).
- Vehicle insurance *average ($150 per month).
- Telephone and hotspot internet access ($150 per month).
Marketing Your Food Truck to Customers
Leveraging internet advertising is an important element that drives crowds of customers to your food truck, no matter where your location is. In fact, popular food trucks develop a fan following if they have a website and blog. You can hire someone to build the website, or do it yourself using platforms like WIX or Squarespace, which provide user-friendly tools for beginners. Small monthly charges apply.
Social media plays another important part by crowd sourcing customers to visit your location. Many food trucks prefer to move from one location to another, participating in local festivals and events. Remember to contact local cities and towns beforehand, to learn more about any restrictions or ordinances that you will have to comply with, before parking your food truck to serve customers.
Food trucks typically manage their social media accounts on Facebook, and Instagram. Some choose to be active on other social networks including Twitter, and LinkedIn. The content or posts that food trucks share revolve (of course) around the delicious entrees, snacks and menu items, and about the community they are visiting and any special event in that area. Leverage hashtags to for the city or town, or the community event to help drive customers to your food truck.
For more marketing and promotional ideas, check out some of the tips provided in this article by Entrepreneur magazine.
Creating an Uncommon Menu
Selling pizza slices in a community where there are 5 or more established pizza establishments? The key to attracting customers to your food truck has a lot to do with the type of menu you create. You want to offer high quality foods (because food truck pricing is at a premium) and value for your customers, but to entice consumers you’ll need to offer food that they can’t get locally.
If you are thinking that hamburgers are a ‘tough sell’ on a food truck, consider that some of the most successful food trucks are your basic hamburger and French fry menu. But savvy entrepreneurs know that they can offer an exceptional and uncommon menu item, like an American Style Kobe beef burger, or Japanese Wagyu, topped with freshly grilled peppers, onions and quality cheddar. Something that tastes miles above the standard fast-food burger.
Korean BBQ is another popular and trending menu, that is easy to prepare with quality beef and seasonings. Street tacos are a perennial favorite, no matter where you serve them, with fresh cilantro, beef or chicken ingredients.
If you own a restaurant and would like more information on wholesale meat products and menu ideas for your new food truck venture, contact our research and development team at Miami Beef®. We serve the food service industry with quality meats, precision portions and value.