Food truck industry grew at a rate more than double that of the U.S. economy, according to a recent study by IBISworld. The study said that the recession’s impact, the social media phenomenon and the consumer’s preference shift towards affordable, healthy and gourmet food are behind the outstanding performance of the food truck industry in the last few years, as trucks became a popular alternative in large U.S. cities.
The food truck industry started up in the late 17th century, but figures confirm that its popularity increased consistently since 2009. Street vending revenues grew at an average rate of 3.9 percent over the last five years according to a recent study by IBISworld, reaching $1.2 billion in 2013. This figure was encouraging, considering that the American economy expanded at an annual rate to 1.2 percent in the same period. Fast food restaurants revenues, its closest competitor, did not perform better than the average economy.
Experienced chefs with lower job opportunities in the period of the crisis found that starting a food truck was a smart choice especially because of the low initial investment requirements, according to cullinaryschools.com. The site added that “now penny-pinching diners had an appetite for fast, inexpensive food that’s of higher quality than your standard chain restaurant fare.”
“Social media has played a large role in not only making the trucks more accessible, but also allowing them to cultivate the crucial element of community,” says Zachary Sniderman of Mashable.com.
The food food truck industry is concentrated in more populated cities. California generates the 17.5 percent of total revenues of food truck industry, Texas (11.7 percent). Florida (7.8 percent), Ohio (6.3 percent), Illinois (6.5 percent), New York (4.8 percent) and Pennsylvania (4.2 percent). The District, Maryland and Virginia sum 3.1 percent of total street vendors’ revenue. If one takes into account that the first food truck was established in the District in 2009, this figure shows the important dynamism showed by this activity in the city and its surroundings.
Food trucks not only satisfy the culinary tastes of the modern and demanding urban citizens, but they are also very important for large cities because they generate business and employment opportunities. The industry generated more than 35,000 jobs and pays wages by $363 million in 2013, according to the report.
“The DC food truck community has been investing in the local economy, creating jobs and helping to revitalize underdeveloped areas, all during a time of one of the worst recessions in our nation’s history. Members of the association together create more than 250 full-time jobs here in the District,” according to the DMV Food Truck Association.
Other features of the industry include:
- The food truck industry’s dynamism was not stopped by stringent regulations and enforcement policies adopted recently in the major cities.
- Street vendors compete with each other on the basis of the time and convenience for a target market of customers that are looking for a quick meal. They also compete with a wide range of other food service providers. For that reason they have been forced to limit price increases, which have constrained the industry margins.
- This industry has experienced a technological change in recent years. The equipment in use has improved over the last decade due to increased food safety regulations.
The report expects a promising future for the industry as the unemployment rate decreases and consumer spending recovers in the near future. The estimated annual revenue growth is 3.1 percent in the period 2013-2018 for the industry, slightly above the average annual economic growth (2.9 percent).
The growing number of trucks and the popularity of social media make indicate that the restaurants on a roll are here to stay.