Takin’ it to the streets
February 1, 2010
The hot dog business has been good to Louie DiRaimondo – as good as a perfectly steamed Chicago-style dog with all the tasty toppings. DiRaimondo is owner and CEO of Miami-based manufacturer All American Hot Dog Carts. He’s somewhat of a star in the hot dog industry and has attracted much media attention over the years. But DiRaimondo, the self-proclaimed “Hot Dog King,” couldn’t have had a more modest beginning. His business began with a used hot dog cart.
In 1972, an unemployed DiRaimondo saw a hot dog cart for sale and bought it, figuring he could m a ke a few bucks as a vendor, which he did by working the streets, private parties, fairs and other special events. Over the years, as DiRaimondo’s customers continued to ask him where they could buy hot dog carts to begin their own businesses, it finally occurred to him that he should begin his own hot dog cart manufacturing company.
So he did. DiRaimondo began buying old hot dog carts, refurbishing them and selling them out of his home. As the business grew, DiRaimondo began designing his own carts and eventually moved the business out of his house in 1988.
“It snowballed into this,” he says of All American Hot Dog Carts, a multimillion dollar company that has five buildings, including its own manufacturing plant. The company makes five hot dog-cart styles, including the Chicago, the New York and the Teenie Weenie. DiRaimondo even introduced his own line of hot dogs – “Louie’s All American Kosher Hot Dogs.”
DiRaimondo says his cart business has grown 70 percent since 1985. It dipped about 15 percent in 2009 because of the economy, but he is confident it will pick up as the economy improves. The entrepreneur estimates that 15 percent of the approximately 10 billion hot dogs consumed by Americans in 2008 were purchased from hot dog carts.
The hot dog industry needs people like DiRaimondo, for the hot dog cart has played a substantial role in the success of the hot dog – and vice versa.A “two-way” street
The hot dog has its roots in Germany, dating back to the 15th century. The hot dog cart is thought to have been invented in the late 1800s. Fast-forward to 2010 inside Chicago’s O’Hare International Airport. Patrons are bustling up to a hot dog cart – this one anchored by a Vienna Beef umbrella – to purchase one of the Chicago company’s famed frankfurters. Bob Schwartz, senior vice president of customer development for Chicago-based Vienna Beef, says the company has a sizeable stake in hot dog carts and counts on these vendors to sell its products. “We’ve committed a large portion of our marketing dollars toward these independent operators,” Schwartz says. “We’ve created customized marketing materials for them.”
Vienna Beef has promoted its retail hot dogs as “the hot dog stand hot dog,” Schwartz says, adding that hot dog stand vendors have helped Vienna Beef as much as Vienna Beef has helped them.
“It’s a two-way street,” Schwartz says. “If you put up a Vienna Beef sign with a hot dog stand, it lends itself to credibility. The expectation is there for quality. What hot dog stand operators have done for us is perpetuate the business by using our product.”Getting famous
Somewhere on the streets of Manhattan, people are in line at a hot dog cart adorned with a Nathan’s umbrella to purchase that company’s wieners. Like Vienna Beef, Nathan’s hot dog stand vendors have helped the company’s brand as much as the brand has helped the vendors. Nathan’s Famous Inc. began as a nickel hot dog stand in Coney Island in 1916. The company hasn’t forgotten its roots.
“It has really been a big part of our growth,” says Randy Watts, vice president of Nathan’s franchise operations, of the company’s hot dog stand sales.
Nathan’s sold 385 million hot dogs through all of its distribution points in 2009, although Watts can’t pinpoint how many were sold through hot dog carts. “We’ve had steady growth the past 10 years,” he adds.
Nathan’s hot dog stand business began small, with much less capital involved than that used to construct a Nathan’s restaurant, Watts says. In the early 1990s, Nathan’s would complement one of its mall food-court restaurants by placing a hot dog stand at the other end of the mall to draw extra business during high traffic and peak periods. “It was great marketing, too,” Watts says.
But in 2010, the Nathan’s hot dog carts have morphed into much more. Watts says people want to operate hot dog carts for myriad reasons, whether it’s as an ancillary to a Nathan’s restaurant or to sell products at special events.
Ozone Park, N.Y.-based Worksman Cycles manufactures Nathan’s hot dog carts. Nathan’s provides Worksma n w it h specifications for propane, electric and Sterno-fueled carts.
Watts says the best hot dog cart must produce the right amount of product at the right time. The cart also has to prepare product properly and quickly. “We don’t want dirty water dogs that sit and float in boiling water,” he says.
The best hot dog cart should also have a fun feel to it. It shouldn’t look cumbersome. “Our carts have cool graphics,” Watts says. “We think selling hot dogs should be fun.”
Schwartz says there are probably more hot dog stands and hot dog shops around Chicago than Mc-Donald’s, Wendy’s and Burger King restaurants combined. And many of those stands have earned a reputation for selling quality products.
Chicago has been known for its hot dog stands for years. They’re called “stands” because they were so compact in the early days that the people operating them had to “stand” behind them, Schwartz says.
The average restaurant goes in and out of business in seven to 10 years, Schwartz says. “But there are many hot dog stands that have lasted 10 to 60 years,” he adds. The people behind the stands
Schwartz, a hot dog historian, wrote a book in 2008: “Never Put Ketchup on a Hot Dog,” which he says is about the people behind hot dog stands. “There’s a lot of passion that goes into this business around Chicago,” he says.
Schwartz says what has helped make hot dog stands popular is the personality of people operating them. Consider DiRaimondo, who has been known to don a robe and crown to sustain his “hot dog king” image. Schwartz says the best vendors built relationships with their customers. For instance, it’s not uncommon for a vendor to label a customer with an affectionate nickname, Schwartz says, adding that he knows one vendor who calls a frequent customer “Mr. Mot,” because the customer always orders a hot dog with mustard, onions and tomatoes.
“They have camaraderie with their customers,” Schwartz says. “They also have fun at their jobs.”
Many people who buy hot dog carts want to achieve full-time work. There are also people who want to do it part time and others who just want to work special events. DiRaimondo says an industrious hot dog vendor can easily earn upwards of $60,000 per year.
The vendors also contribute to the eating experience, which is vital at any restaurant. A positive hot dogeating experience could transform into increased retail sales for hot dog processors like Nathan’s and Vienna Beef who are in both segments.
Having its products at different points of distribution has helped Nathan’s with cross marketing, says Watts, noting that Nathan’s hot dogs are sold in more than 17,000 locations.
The idea is to get the consumer who stopped to buy a Nathan’s hot dog at a hot dog cart on Wednesday to buy a pack of hot dogs at the supermarket on Saturday.
“We don’t buy radio commercials – we don’t have to,” Watts says. “We’re marketing the brand through points of distribution.”
Nathan’s hot dog stand business is not only growing in America, but it has expanded abroad, including into China and Kuwait, Watts says. Making an early stand
Not all hot dog processors are as keen on the success of hot dog carts to move their products as Schwartz and Watts. Englewood, N.J.-based Marathon Enterprises, which sells Sabrett all-beef and natural casing frankfurters, has a reputation for selling its products through hot dog stands. But Boyd Adelman, president and CEO of Marathon Enterprises, says hot dog carts garnered more sales and played a more important role for the company in its earlier years. Marathon Enterprises’ other customers include supermarkets, wholesale clubs, independent distributors, movie theaters, amusement parks, convention centers, ballparks and stadiums.
“The visibility of the blue-andyellow umbrella on the streets of New York was very significant in establishing brand recognition for us,” Adelman says.
But cart sales aren’t as big as they once were for Marathon Enterprises. They’ve gone from 75 percent of the company’s sales 25 years ago to about 15 percent today, which is equal to the national average.
“That segment of our business has become a small part of our sales, although it’s still important in terms of visibility to the public,” Adelman says “It still holds a fond place in our hearts.”
While it’s not a growth area for Marathon, Adelman says he welcomes new customers.
“We encourage street vending because it has always been part of the core business we’ve had,” he says. “But we’re growing more significantly in other areas.”
DiRaimondo, however, expects continued growth of hot dog stands, citing the growth of hot dogs throughout the world. “It’s a global market,” he says. “We sell hot dog carts all over the world, including the United Kingdom, France, Russia and Japan.”
According to DiRaimondo, “Get your hot dogs!” is now being belted out in several different languages.