It’s called a lot of things in a lot of places – the food truck phenomenon, street food revolution, food truck fever, or the food truck craze. Whatever it’s called in any city, it’s likely not a phase. With an average annual growth rate of 8.4%, the street food industry has grown into a thriving $1.5 Billion industry in the United States in less than a decade, and is expected to swell to a staggering $2.7 Billion by 2017. Despite the impressive statistics, however nearly as many food trucks and food carts will close their serving windows for good this year as will open.
While the rest of the food service industry has seen less than impressive growth, and has actually suffered due to lower consumer spending, street food continues to build a momentum, propelling itself by leaps and bounds as new and exciting food options hit the streets at an alarming rate. Weakness in the economy and high unemployment rates have encouraged people with otherwise slim job prospects to embark on food service careers where they have more control over their lives and incomes. And, it’s seemingly easy, especially at the peak of a local food truck frenzy where no company owns a dominant market share in the industry. Everyone is on a level playing field, and customers line up for blocks.
Food trucks and carts require little start-up funding, and as a street food market emerges in a city, there is almost a built-in, guaranteed customer base powered by the hype and excitement that comes along with a new and exciting fad. What happens when the excitement wears thin, and food trucks and carts blend in with the rest of the city’s decor? During the growth period when everything is new and exciting, a food truck operator can easily be swept up by the hype, but if he doesn’t use this time to his advantage to build a loyal customer base, he’ll be hard-pressed to sustain that street food business when the honeymoon is over.
During the height of the frenzy, most food truck operators enjoy the cat and mouse experience of being chased by their customers – many actually feel as though they’ve been given some sort of celebrity status. To the avid foodie, following food trucks is a sport and a challenge. Many even write skillfully devised advice blogs about finding and tracking your favorite food truck, and they highlight their favorite food trucks in reviews and photo slideshows. At some point, though the pendulum swings in the opposite direction, and the chasers become the chased.
Much like opening a hip new restaurant, once the hype subsides, it’s the quality of the food that keeps a kitchen open. Unfortunately, many food truck operators jump in when food truck fever is burning like a raging brush fire, but do very little to build sustainability into their business plans. When the party’s over, they’re left without an identity, brand recognition and typically a business that’s losing money and its reputation.
Poor branding and menu execution are probably the two primary reasons food truck operators find themselves scratching their heads, watching people pass their food trucks by from inside their serving windows. They wonder where the customers have gone, and in desperate measures, they cut corners to reduce cost. Their menus move from being inconsistent to having poor quality – the beginning of the end for most. Soon, they return to the origins from which they were born, and they’re reduced to nothing more than construction site lunch wagons.
Consistency is the basis of a strong brand identity. At the peak of the locals’ food truck fever, food truck operators are often enticed to experiment with their menus, and offer more items. They build menus over time, adding core products, sides, add-on’s, specialty sauces, and desserts. And, in the hay day of the food truck phenomenon, nothing could seem more fitting, than to give customers what they’re begging for – more. More culinary masterpieces, more side options, more hours, more locations. Yet, they do very little to market their businesses and develop a core customer base, or truly develop locations where they could eventually be seen as local institutions. In 2012, the advice I offered most to food truck operators was to streamline menus and develop consistent and solid menu execution strategies.
Last September, I wrote about the false sense of security a long line gives to a food truck operator and the very negative image it leaves on customers, and I looked at two menus.
The menu on the left offers 6 tacos, 6 burritos and 6 quesadillas, using a total of 9 ingredients and 3 staff members. Wait time from standing in line until order received, 27 minutes with 15 people in line. The menu on the right offers 11 sandwiches and burgers, 5 versions of fries, and 4 side dishes using 34 ingredients, and 2 staff members. Wait time from standing in line until order received, 47 minutes with 0 (ZERO) people in line, and 14 people waiting for their food.
Consequently, the overhead cost for the business on the right is nearly 20 times greater than the business on the left. In a city like Sacramento, California, where the food truck fever was very short lived and more like a mild temperature than a fever, food trucks serving 48 variations of a hot dog are far less likely to succeed over a five year period than a food truck serving waffles three ways.
There is a formula for success, and it doesn’t involve moving to the next town where the food truck fever is just beginning. A food truck operator can avoid becoming a “closure statistic” with consistent branding, streamlined menu, a solid menu execution plan, a strong brand presence with a singular brand message, constantly discovering new locations and catering contracts, all backed by locally sourced, fresh ingredients and high quality food. It’s all about relentless consistency.