Should Grocery Stores Own Food Trucks Too? Why the Idea Makes Sense
What would your reaction be, if you pulled up to your regular grocery store and found a new branded food truck from the retailer, parked outside? As food trucks are outpacing the growth and profit potential of other more traditional dining options, grocers should consider the opportunity of expanding their service (and revenues) by creating that experience for their customers.
How can grocers capitalize on the current food truck trend? We’d like to share some inspiration and ideas for our retail partners and commercial customers. A food truck is a magnet for customer traffic and can present a variety of new income opportunities for retail grocers.
Why Do Consumers Love Food Trucks?
Sometimes you just need a ‘quick eat’ without all the fuss and bypass the crowded restaurant and lineups to get a snack or small meal. Consumers love food trucks because they are approachable, a la carte dining that is simplified and somewhat rustic. Particularly if the truck offers a few café style tables or picnic benches to dine outdoors.
Consumers are also wary of fast-food that may be prepared too far in advance and compromises the freshness and enjoyment of the meal. Food trucks typically prepare each order by hand for the customer, and there is a perception that the food is fresher than other fast-food restaurants, where some prepared foods sit (and dry) under heat lamps.
There is also an element of being ‘seen’ at a food truck, or the social element that entices customers. It’s trending, and it is fun to be dining somewhere out of the normal locations. Paying a higher price for food that is cooked fresh, and for the opportunity to dine al fresco in the middle (or at the end) of a business day, is pleasurable.
The Size of The Current Food Truck Industry
America is currently in love with the food truck culture, even though it has been around for decades, it is particularly trendy right now in both urban cities and suburban communities. There are restaurants who have quickly branched out to create more brand/menu awareness and recruit new customers to their brick and mortar locations with one or more food trucks.
There are independent food truck owners, or sole proprietors who operate their own specialty food service, some of which have rapidly expanded into successful and highly profitable fleets. Here are some recent statistics about the demand and sales potential of food trucks:
- The food truck industry in 2018 surpassed $2 billion dollars in revenues across the United States. In the past three years alone, sales have grown 300%.
- The growth of food trucks and their prevalence is outpacing many traditional commercial food service models, such as restaurants, which grew 4.3% in 2017 vs. food trucks that saw a 5.4% increase in sales and profitability.
- 54% of food truck diners are aged 35 to 44 years, however Millennials are considered to be the ‘food truck generation’ as young urban professionals prefer getting outside on lunch breaks and trying new ethnic and fresh prepared food.
It is plausible that we will all start to see grocery stores rapidly expand into this space as a lucrative revenue source, as well as a public marketing and promotional strategy. But what advantages can that present to retail grocers?
Adding a Food Truck Outside the Grocery Store
How many times have you visited your local grocery store during summer months, to find them running a special charitable event, and grilling out front of the store? Even if a customer doesn’t stop and partake of a cheap but delicious eat, they are still breathing in the kind of aromas that will make them think about grilling. Or make them hungry enough to add a few extra items to the grocery cart and increase per cart sales value.
That is part of the psychology of grocery store marketing; people love food and some people simply love the whole experience of visiting their favorite grocer to plan new and delicious meals. But are grocery stores doing enough in-store marketing of different brands, products and the culinary possibilities that customers can create? Some do weekly, but others do not.
A food truck parked outside a grocery store, helps customers realize the potential and try new products. It creates brand awareness. It can also become a robust revenue source for the grocery store, as the food truck can be an expansion of the hot meal section and foods that are already being prepared inside. For customers who are stopping in on their lunch break to pick up a few non-perishables, it’s also an opportunity to grab a hearty lunch before heading back to the office.
It is also an effective way to increase hot food sales revenues, by catering to customers who aren’t coming into the store to shop, but who still want to enjoy a bargain and a flavorful lunch menu. Creating that relationship outside the store with the customer, increases the probability that they will choose your grocery store when it’s time to shop for their groceries too.
Taking Groceries Back to the Neighborhood
Thinking about ways to expand sales and the service you provide as a Grocer to your community? While the assortment you provide in your store benefits people who can travel to your location, some independent grocers have tapped into a hidden market, which should be no surprise to anyone who has ordered groceries for delivery. They are using food and refrigerated trucks, to bring food to their customers.
Consider that for the aging population, or for individuals with special mobility needs, getting to a grocery store and the process of loading and unloading groceries from a vehicle (or UBER) can be difficult. But what would happen if the essentials, including fresh produce, an assortment of meat and dry goods were available (at the same price) right off the back (or side) of a truck?
That is exactly what one entrepreneur has done in Miami. Arturo Tamayo carries an assortment of the above, and some Latin favorites and other staples, and parks in suburban neighborhoods as well as commercial areas where he is authorized to sell from his grocery food truck.
Some of his biggest customers are seniors living in long-term care facilities, who can walk (or be assisted) outside to browse the fresh selection and pick up some of their favorite items. This provides not only a food delivery service, but the experience of being able to personally shop for groceries, which is a luxury for individuals who can no longer travel independently.
Now imagine this model replicated for a larger grocery chain, with branded trucks? Most grocery stores are opting for call-ahead and pick-up, and could coordinate delivery of good purchased online, as well as offering specials that the consumer may choose to browse while accepting their order. This would work particularly well with frozen convenience foods and meats, where the customer may choose to add to their order onsite, depending on the specials or discounts offered.
Discounting food close to expiration is a loss for grocery store chains. Instead of spoilage, offering this service and discounts on foods that need to be used within 1-3 days, would not only reduce loss, but it would improve service to customers looking for a bargain. There are so many possibilities for retail grocers to consider, and ways for them to participate in the current “food truck craze”, so think beyond the occasional grill-out at the front door, to something more meaningful to your customers and to your bottom line.