Editor's note: This four-part series explores the growth of the food truck industry. Click here to read parts 1 and 2.
Although the food truck industry is emerging as one of the most decentralized foodservice industry segments, entrepreneurs aren't solely responsible for its success. FastCasual takes an in-depth look at how three entities — trade organizations, software providers and event schedulers — have helped transform the industry from a mom-and-pop business into the fastest-growing foodservice channel in the United States.
Trade organizations emerge
Trade organizations and associations play an important support role as the food truck industry matures, but the regulatory environment varies by region, said Matt Geller, CEO and co-founder of the Southern California Mobile Food Vendors Association.
"You have to go to the health department if you make any changes to a truck," said Geller, who has assisted associations in New York, Washington D.C., Chicago, Philadelphia, Baton Rouge, Louisiana and central Ohio. He recently teamed with several regional food truck associations to form the National Food Truck Association, which helps educate operators about their states' requirements.
"You want to take the truck built to code," said Geller, who thinks California has the most established regulations. "The manufacturers will build for anywhere, but they must know where the truck will be used."
Jeremy Adams, co-founder of Prestige Food Trucks, understands that regulations play an important role in the industry's safety, and as local governments begin to recognize the value of food trucks, they are developing better regulations to support the industry. One result of this is that there are more organized food truck events. This is a good time to be in the business, he said, as growth is easier than it was a few years ago.
Software support is critical
It's no secret that social media plays an important role for food trucks. The mobile restaurants not only use social media to alert customers about location dates and time but also rely on it to make special offers, publish new menu items and to boost traffic with review sites. Some observers go as far as saying that food trucks played a key role in boosting social media.
What may be less obvious, however, is how important software providers are to the industry's success. While food trucks are becoming more professional, less than 30 percent are using POS payment software, said Chris Poelma, president and general manager of NCR Small Business.
NCR Silver and NCR Silver Pro, for instance, give access to different social media outlets simultaneously. NCR's POS products can integrate social media with payments, back-office functions and labor scheduling.
Poelma said food truck events, for which NCR acts as a sponsor, draw thousands of people.
The most exciting aspect in his view is the variety of food the trucks offer.
"I think you can find more diversity in food trucks than in restaurants themselves," Poelma said. "There are food trucks out there that specialize in pastry." One truck he saw specializes in a certain type of bread and had a line of 30 people waiting to partake.
Poelma estimated the attrition rate for food trucks is similar to that of restaurants – one in seven do not survive beyond three years.
Event-scheduling kicks into overdrive
Event-scheduling organizations are another pillar of the food truck industry.
Food Truck Bazaar, for example, is an Orlando, Florida-based company that manages 10 regularly scheduled monthly food truck events throughout Florida. The company schedules and markets three-hour food truck events, in which the trucks pay a fee to attend.
"The locals get a brand new, monthly event that the cities don't have to pay for or organize," said Mark Baratelli, owner of Food Truck Bazaar. "People like the variety and the casualness, and people were willing to eat their food standing up and have access to a lot of different brands in one space."
Baratelli got his start by blogging about food trucks and other activities in Orlando. The blog familiarized people with some of the ethnic neighborhoods that many people weren't used to visiting, and one day, someone suggested that he promote a food truck event.
Baratelli was up for the challenge. His company — now in its sixth year — was meant to be a one-time event, but the success caused Baratelli to extend it to a series of events.
"It's really strange that a blogger would end up in the food industry," he said.
Baratelli took on the task of arranging the events in different cities. "Most of them (city officials) didn't know what I was talking about. They didn't understand it. I had to bring pictures. I created a book, mostly a picture book with stats," he said. "Pretty soon, I had this group of cities that I visit every month. Six years later, it's still going strong."
"They (the trucks) are paying for me to do all my advertising to get people to show up to my events," he said. "They don't have to market themselves. They can focus on their job, which is selling food."
Baratelli has 60,000 social media followers, including Facebook, Twitter and Instagram.
"They're part of the food industry," Baratelli said. "They're going to continue." Since 2011, 40 food trucks have opened and closed in the markets he serves, he said, while about 100 have started and survived.
Part 4 of this series will provide the growth strategies and future plans from several CEOs of food truck companies.
(Photo courtesy of Food Truck Bazaar.)
Companies: NCR Corporation
Elliot Maras / Elliot Maras is the editor of KioskMarketplace.com and FoodTruckOperator.com.