Food Trucks, Street Vendors Move Up in Business [Update]
Do you live in or near a big city? How about a college town? If so, you are probably familiar with the ever-growing number of food trucks that setup shop in hopes of attracting local customers.
On the surface, a food truck is nothing more than a kitchen on wheels. Dig deeper, however, and you will find an industry that is growing by leaps and bounds, with some serious cooking going onto boot.
According to a 2015 IBISWorld survey, "industry revenue has increased at an impressive annualized rate of 9.3% over the five years to 2015."
The survey also notes there are nearly 5,000 food truck businesses throughout the United States, employing approximately 14,000 people.
Like many industries, one successful food truck spawns many others. This "copycat" style has led to robust growth. Here are some other reasons for continued growth and the excitement surrounding the future:
Lower investment cost when compared to a brick and mortar location.
Mobility allows the business to move as necessary to suit the needs of as many customers as possible.
Lower operational costs.
All of this is even more impressive when you consider the challenges facing food trucks. IBISWorld shared the following:
"The industry will face various challenges over the next five years, especially regulatory hurdles, which have restricted the industry's growth over the past five years. Parking laws and other ordinances are still evolving in many cities to catch up with the industry's transformation."
Regardless of the challenges, the industry will continue to grow as entrepreneurs realize the potential to make money doing something they love: serving great food to excited customers. Furthermore, people are attracted to food trucks due to the unique approach, gourmet options, and healthy alternatives.
With the food truck industry set to capsize $800 million this year, there is no reason to believe that entrepreneurs will back away from this business idea anytime soon. The opportunity is there, as the appetite for food truck cuisine continues to grow.
There used to be a time when street vendors were looked down upon. Fortunately for those in this industry, things have taken a turn for the better over the past few years.
Projecting Food Truck Growth
According to a recent study by Forbes.com, the future looks bright for street vendors. Over the next five years, "street vendors have a projected revenue growth of 3.7%."
If things work out this way, the industry total will climb to $1.7 billion. This is huge growth for an industry that just recently began to catch on.
Now that street vendors are the "in thing," consumers are keeping their eyes open for offerings in their area.
Despite the fact that food trucks have seen the most growth in large coastal cities, other markets are beginning to experience much of the same.
For a better idea of the overall growth, here are additional statistics courtesy of Forbes.com:
Annual Revenue Growth (2011-2016): 3.7%
Annual Enterprise Growth (2011-2016): 3.8%
Capital Intensity: Medium
2011 Profit Margin: 23%
Despite the fact that the capital intensity is listed as "medium," the barrier to entry is "low." Anybody with an idea, streets with plenty of people, and the right approach can get involved in this industry.
The next time you are out and about in a big city (or not so big), keep your eyes open for local street vendors. You may find that there are more food trucks setting up shop and circling the block than ever before.
This industry is an interesting take on the traditional restaurant. The same quality food can be served, but the business is able to move from one location to the next with ease. If there is no business on one corner it can setup shop somewhere else.
If the street vendor industry continues to grow, the future for those who are already involved, as well as those with big dreams, is bright.