Street Food Trend: Food Truck vs. Organic Trucks

Jennifer Collins Ent 1000 3-20-2013 Industry Paper Food Truck vs. Organic Trucks The street food trend has been a growing industry nationwide. According to American City Business Journal of Orlando, Fl. , “more than 3,000 street vendors made $1. 3 billion in revenue in 2010, a 12. 7% jump from the revenue from the prior year. The average startup cost of a food truck is only about $5,000-50,000 and the yearly profit potential can be anywhere from $100-250,000 per year. The list of costs for startup include fuel, maintenance, business permits, equipment, supplies, insurance, marketing and is still minimal in contrast to the fees required for a stand-alone cafe spot in a busy business area. This is good news. Organic food trucks have almost no competitive market compared to the food trucks that provide fan fair (unhealthy) fast foods. The mobility of this business provides a wider profit gross than a stand-alone brick and mortar business and the flexibility to drive wherever the customers are can be a competitive advantage.

I wanted to start an Organic Food truck business first rather than open a small restaurant for a few simple reasons. Startup costs are considerably less, and profit margins can be more. During my research of looking up for sale ads, I found that a used truck right now can be as low as $15,000 or a new one at $30-50,000. According to Forbes. com, I can move towards my market selling in more populated areas, whereas, “Purchasing a small cafe in my local area with twenty seats, around 2,000 square feet in size can cost upwards of $175- 300,000,” and then I am stuck in the same community for years.

The basic food truck concept started way back in 1961 when New York began to regulate vendors selling food from push carts. Mobilecuisine. com- the History of American Food Truck article says, “Horse drawn chuck wagons started in 1866, sausage vendors sold quick hot foods to students at their dorms at Yale, Harvard and Princeton in 1974 and the first Taco truck in 2008 was regulated to sell food in a highly populated in Los Angeles, California. ” The National Restaurant Association said, “The category tops $630 million in nationwide revenue in 2011. But when first introduced, a regular food truck selling the typical burger, taco or BBQ made about a third of that ten years ago. Currently there is no confirmed market spot for the vegetarian or organic food truck but this area is undefined. In the Western part of the U. S. , vendors who sold Asian, BBQ, or fair food sell the most products compared to the healthy foods that may be sold on a vegetarian or organic cart, yet there is a rise and a need lately in the health food industry with people trying to lose weight and eat better.

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Working in a health food kitchen for the past two years, I have realized how consumers have few choices in this area of eating out. Having the convenience of a healthy food truck alternative parked in “your area” is a perfect idea. Certain health risks and disease are on the rise and people love the idea now of having a gluten-free, soy or dairy-free, vegan or locally grown food choice in their own back yard where they can feel good about what they eat. Someone is looking out for them. According to Wikipedia. rg 2013, locally here in downtown Tampa; Mayor Bob Buckhorn organized a monthly food truck rally drawing thousands of coinsures. Saint Pete followed suit in 2011. “The biggest buyers of foods from mobile vendors are adults age 25-34 spending an average of $44 per month. ” In Theresa Ehrlichs online article, she also ads, “major market area analysis shows that 55% of trucks park at a street corner, other venues or events such as rally’s are 18%, construction work sites 15% and shopping malls contribute to 12% of locations served. Right now, the phenomenon is gained so much buzz, that it’s difficult to accurately track the national sales. Yet as should be assumed with any business the first year, there are political, environmental, social-cultural, technological and competitive threats. Upon further analysis of my industry (Industry code #722211 mobile ready to eat pay first food service), and my industries trade associations (mymfva. org. Mobile Food Vendor Association MFVA or The NAC National Association of Concessionaires at naconline. org. , they outline a more extensive overview of the PESTC for further forecasting. POLITICAL: Some of my industries opportunities say that you will not have to purchase a separate kitchen to cook food in, as all the cooking can be done on the truck. There are rumors though, that these laws may change in the near future. Many truck owners may see parking tickets an s apart of an overhead cost. Parking at a free event saves cost of such fees. Permits to operate in the city are often affordable and I already possess a National Food Management License that is required by the state.

I’m personally not ready to open a food truck but a few years from now when I am, permits and standards may change. ENVIRONMENTAL: Recently the economic state has plummeted and consumers are watching there money. They may not be able to afford eating out at ritzy cafes. A food truck offers unique food concepts at a more affordable price. Currently 70% of Americans are too busy to cook at home so they eat outside. On the other hand, if food truck owners do not keep up with trends and good locations in local areas to sell, consumers may not be aware of new foods.

They would have to keep up with social media and marketing to promote themselves properly. Some vendors say they are using Twitter and Facebook to let customers know which location they will be serving next. SOCIO-CULTURAL: In my own experience with eating from a food truck, I see street vendors as fun and find the process is much like a “foodie groupie” in the game of searching out the locations where they may be this week. It becomes a fun weekend hobby. In the past Trucks were called “roach coaches. ” I suspect that this stereotype deters some people from trying out a food truck.

Owners must work extra hard to gain a positive reputation. TECHNILOGICAL: Technology is always changing and the prices increase for such equipment that may be needed to keep up with the times and customer demands. A food truck only has enough room for so much food, storage and equipment which is made to travel as simple as possible. Basic kitchen equipment based off of a standard menu is only required yet there may not be room for high tech registers or credit machines. Most food trucks use “Square”, with their mobile phone to process credit card payments.

You won’t waste time counting cash or change for the customers and it works out just as quickly as any other process. COMPETITIVE: A competitive threat the local community might include a copy cat food truck that would force a new truck to step up his game, but as far as the threats of the environment in a competitive nature, I don’t see a lot. On contrary, the niche of having healthy food services is that it’s probably in no league of high competition with an actual restaurant. Because it’s mobile, this provides a direct link to the customer and find the most profitable areas to work in.

If one area isn’t great, they can simply move on. Strengths within the food truck industry of “ready to eat foods”, I include lower overhead, creative menu options that can be changed, high brand recognition and lower start up costs that would also be affordable to maintain. Opportunities, I feel, are based on the individual business owners’ future goals. Moving into a tourist town where there are few trucks and less competition, offering something unique or replacing a truck spot that has just closed could bring more customers.

Rising food costs or lack of expertise in financing or managing could pose as a Weakness. Rising gas prices, traveling expenses and county changes or restrictions could also become a Threat in the food truck business. On a better note, trends right now in the street food vendor industry are growing in our local area and are all the rage in western states. It is a competitive yet fun concept. In my personal opinion, the opportunities out weight the threats in this field so I look forward in learning more and producing a creative aspect to the ideas I already have in place.

With the reputation that this concept first started with compared to the revenue its generated in the past recent years, the potential seems profitable enough and worthwhile. Food trucks have been around since 1866 selling ground chuck burgers and sausages but the vegan, vegetarian, organic trend has not been around too long making the potential gross profit almost unknown. I think this concept is a good thing to risk moving forward with. I see it as a win! BIBLIOGRAPHY “The cost of starting a food truck. ” Forbes. com. Web. 27, September. 2012. Investopedia. Anjail, Fluker. Orlando Commisary Forms Association for Food trucks.

Orlando American City Business Journal. Web. 14, March. 2012. Myrick, Richard. The history of American Food Trucks. Mobile Cuisine magazine. Take the Cannoli Productions L. L. C. MCM 2010-2013. Web. 2, July, 2010. Theresa, Ehrlich. Best Customers: Demographics of Customer Demand. 2008. Web. SBCC. net Pon, Jackie. 5 Things you should know About Starting Your Own Food Truck. Pbs. org. 2013 WNET. org. Web. 15, October. 2010. Myrick, Richard. Running a Food Truck for Dummies. Dummies. com. 2013 John Wiley and Sons, Inc. Web. Wikipedia. com. Food trucks in Tampa. 14 February 2013. Web.

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