Some restaurant businesses 'going mobile'
June 8, 2010
by Bryan Salvage
WASHINGTON – Some restaurateurs are literally driving business to their brick-and-mortar operations. These businesses are investing in food trucks to build brand awareness and increase sales. In other cases, some entrepreneurs are investing in food trucks as a way to enter the restaurant industry without the high-start up costs of leasing, constructing, equipping, furnishing and staffing a new operation.
As a result of increasing interest, the National Restaurant Association is helping operators, investors and entrepreneurs learn more about food trucks as a way to increase off-premise sales, promote their brands and attract customers. And for the first time, the association featured a food truck pavilion at its annual Restaurant, Hotel-Motel Show held recently at McCormick Place in Chicago.
In addition to the Streetza Pizza and Ludobites trucks shipped on flatbeds to McCormick Place, the pavilion also featured companies that make and equip trucks, design firms that "wrap" the exterior with graphics and logos, point-of-sales providers and other businesses that support the mobile food truck industry.
"Mobile food is stirring things up," said Ray Villaman, founder of Mobi Munch, a San Francisco consulting company for the food truck industry. Mr. Villaman moderated a panel of food-truck operators and advocates at the show, plus participated in the pavilion with partner Chef Ludo Lefebvre.
Start-up and marketing costs generally are far lower for mobile food trucks than conventional restaurants, said Nancy Kruse, who discussed food trucks at the N.R.A.'s recent Marketing Executives Group meeting. Scott Baitinger, owner of Milwaukee's Streetza Pizza, told the marketing professionals that his truck cost about $35,000. Like many food-truck operators, he assembles and bakes his pizzas to order on the truck and prepares the sauce and dough in a commercial kitchen or commissary.
The fledging segment relies on inexpensive marketing. Food-truck operators announce their locations to customers through Facebook, Twitter and other social media sites. Some rely on customer votes to determine the day's locations.
As customers mingle around the trucks waiting for their food, they interact in ways unimaginable in conventional restaurants, said restaurant consultant Aaron Noveshen, a partner in Mobi Munch. "It's about having fun, eating delicious food and connecting with people," he says. "Social media is a big part of that."
Although start-up and marketing costs are lower for food trucks than conventional restaurants, operating challenges are similar.
Like traditional restaurateurs, food-truck operators must develop thorough business plans, obtain business licenses, deal with local regulatory issues, find staff, determine supply costs and set prices. Some operators have failed because they didn’t understand some of those issues, said Matt Geller of the Southern California Mobile Food Vendors Association. Also, they have to worry about getting P.O.S. systems that work on the road, as well as security, especially for cash-only trucks that operate late at night.