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Food Trucks and Technology: How The Trucks Roll With Technology To Find and Serve Customers

 

Photo Credit: DispatchNY.com / Evan Snug

Food trucks have quickly become a hot item in many large cities across the U.S., with anxious customers wrapping down sidewalks in front of their favorite truck. We watch food truck competitions on television and many people will spend extra time tracking down their favorite truck location just for that special bite of food. After all, we aren’t talking about simple hot dogs and hamburgers any longer as the only mobile food available. We are talking about gourmet style food and specialty food items – everything from schnitzel to Korean BBQ to gourmet ice cream sandwiches to waffles and dinges.  

You can proudly call yourself a food truck ‘groupie’ when you know which food van is going to be parked where and at what time. Having relished the sumptuous variety of food served by food trucks, have you ever found yourself thinking, “Hmm, maybe I could do this for a living”! Well, it’s not a bad idea because the American food truck industry has in recent years seen somewhat of a resurgence with people lining-up to eat street-food like never before.

But like any other business, running a food truck is extremely challenging. For starters, the industry is flooded with a large number of mobile food businesses. In addition, as a result of increased regulations, food truck owners seem to find themselves in all sorts of trouble, from being shooed away from coveted parking slots to receiving increasing number of violation fines. (Although the real reason for heightened regulations in the business could be the perceived threat that traditional brick and mortar restaurants feel from their drive-by competitors). 

Challenges notwithstanding, food trucks are a viable business opportunity and here’s why:

1. The price tag of opening a food truck business remains substantially lower than a traditional restaurant. A traditional brick-and mortar restaurant could cost anywhere from $100,000 to $300,000, at a minimum. A reasonably priced food truck van could cost anywhere between $50,000 and $70,000. Taking into account other costs such business permits, supplies, equipment, insurance, staffing (the industry presently employs over 35000 people) and advertising, the entry costs are still lesser than a regular restaurant.

2. Despite the general economic gloom, the mobile food industry has managed steady growth rates. As per a report by IBISWorld, annual revenue from food trucks is estimated to be $1 billion with annual growth rates of about 3.9 percent between 2008 and 2013. In 2013, the annual revenue is expected to grow to $1.2 billion, a growth rate of 4.6 percent.

3. The report also highlights that despite the 30,810 businesses in the street vendor industry, no single company has a dominant share making it an industry with lower competitive barriers.

4. Consumers increasingly want to patronize local businesses ( localism), which includes the establishments where they buy their food. Most food trucks buy high-quality organic ingredients sourced from local producers. This procurement model besides helping the local economy, also adds to the overall ‘fresh food’ appeal of the mobile food vans.

5. With people looking to cut down every day expenses, affordability has bolstered mobile food van popularity. In addition, food trucks have upped the competitive ante by focusing on quality and providing an array of specialty, gourmet and ethnic food offerings.

6. Smartphones and social media in particular have taken the mobile food business to a different level. Most food trucks are using the internet to keep customers informed of their locations in real-time and engage with customers. Incidentally, the number of Google searches on the phrase ‘food truck’ increased from 83,000 hits in 2008-09 to 28.2 million in 2011-12.

 

So what does it take to build and market a mobile food business?

For a ground-level understanding of running a mobile food business, we connected with Chicago business owner Dan Salls, owner of The Salsa Truck. Besides running a successful street food business, Dan also provides a truck consultation service for those wanting to get into the mobile food business. Here’s what Dan has to say .

(Q) Is the mobile food truck a viable business opportunity today? D.S – Yes.  As long as you can build a strong brand & are willing to work very hard. It isn’t just making great food or having a good marketing plan. Everything is intensified because it’s done on such a small-scale.

(Q) What are the main challenges facing the mobile food business today?  D.S – Weather & regulations are first and foremost in any city. You have to make a good product of course, but the biggest challenge now is how to differentiate yourself from other trucks. Operators are no longer working as the only food truck in town–there are tons of them now!

(Q) What are the main marketing tools being deployed by mobile food vans? D.S-  Social media is crucial (Facebook, Twitter, Instagram, etc.). However, we have been working conventional media sources as well. Knowing how to write and distribute a press release is a valuable tool.

(Q) Are Groupon daily deal campaigns an effective way to build a customer base for a food truck business? D.S – They absolutely can be. The key is consistency and offering an actionable deal that can be repeated.

(Q) Which top 2 social media platforms do you recommend that every food business truck owner should deploy? D.S – Facebook & Twitter. No question.

The advantage that food trucks lack in terms of permanence of location is compensated by the flexibility of being present where the customers are. Clearly, the emergence of trends such as “localism” in customer behavior and social media have helped the mobile food industry thrive despite a weakened economy. In addition the relatively low entry barriers and stable industry growth rates are an attractive prospect. Despite rising costs and greater competition, the mobile food truck remains a viable business opportunity for those looking to enter the food industry.

But remember, starting a mobile food truck is as much about grit and grime as it is about having a great product and savvy marketing. So if are passionate about food and ready to roll-up the sleeves, a mobile food truck may well be a business opportunity worth considering.

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About Rhea Gaur

Based in India, Rhea Gaur is a former banking professional having worked over 14 years with global organizations such as Standard Chartered Bank and ABN AMRO Bank N.V. She has extensive experience across various facets of business such as service quality, market research, process development and corporate communications. She is currently working as a freelance writer with special interest in topics related to business and economics.

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