What’s Driving Food Trucks – M&C Report

March 9, 2012

What's Driving

What’s Driving Food Trucks

Four foundational tires and an engine of artisan passion enable the unique mobile food vehicle deliverables.

Food truck mania is sweeping the United States. While it still isn’t fully understood by a great deal of consumers, for those who have incorporated it into their lifestyles, it’s quickly becoming a favorite type of meal solution.

Today’s food trucks are a far cry from the endearingly named “roach coaches” of the past. Historically, the phrase “food truck” brought to mind a less-than-desirable vehicle serving foods and beverages of questionable culinary integrity and flavor.

Now many of these operations are delivering innovative, premium-positioned menu items consumers can’t seem to get enough of.

They are often owned and operated by individuals with very strong passion for the menu items they create. These entrepreneurs bring a lifetime of influences (ethnic, social, cultural and culinary) to the unique and flavorful offerings on these mobile menus. When asked why they started a food truck, many entrepreneurs said they wanted control over their own future and to be able to use and share their skills.

While food trucks are currently receiving the bulk of media attention, there are actually several types of mobile concepts capable of delivering the goods, referred to collectively as mobile food vehicles (MFVs). For our study purposes, we defined a food truck as an enclosed, motorized, moveable vehicle with wheels that sells various foods and beverages; a food trailer as one that has wheels but no engine and must be hitched to another vehicle to be moved; and a food cart as a small open-air vehicle that is generally pushed or pulled by human power.

The foodservice sector has been paying attention to mobile food vehicles. Operators not only recognize them as a competitor, but also as a source of culinary trends they may incorporate into their own menus. Suppliers are becoming interested in aligning with these new players, understanding that it might open the door for future sales and revenue growth for their own organizations.

The MFV landscape varies greatly from city to city. Various municipalities have different ideas on the role these foodservice options should play. And many brick and mortar operators are unhappy with new competition that they view as playing by a different set of rules.

Regardless of the competitive landscape or type of vehicle, Technomic’s field and consumer research has found a structure around MVF success. Artisan passion is the engine that drives the business of delivering craveable and unique food and beverages, supported by four tires: lifestyle integration, community focus, hospitality and a twist on Grandma’s kitchen.

Lifestyle Integration

Technomic’s consumer research reveals that mobile food vehicles are still somewhat unknown. One in five consumers report they are not aware of them or have not seen one. And a third of those individuals who are aware of MFVs have not purchased from one of them.

Additionally, about half of consumers who have used MFVs tend to purchase less than once a month from any specific mobile food vehicle channel, perhaps due to limited availability. This points to a greater need for MVF operators to find ways to integrate into consumers’ lifestyles.

Location and convenience are key consumer purchase drivers, regardless of which type of mobile food vehicle they visited. Serendipity plays a large role as well, as a large percentage of consumers said they just happened to pass by the MFV or it was near an event they were attending.

The operators of the Chef Point Café in Fort Worth, Texas, recognized the value of being where customers are, when they are there. The restaurant wanted to “bring the food to the customer” and collect new fans as well. So it built a mobile truck with a full industrial kitchen inside, created a kitchen of many of the café’s popular items, and parked in a location near a Fort Worth hospital.

Another example of using location to meet customers on their daily travels is the Blue Sky Dining trailer. It offers hot, full family meals that customers can order in advance. The vehicle then parks along a busy highway in the Raleigh-Durham, NC, area that lead hungry commuters home after work.

You might also find MFVs in food trailer parks, which often have indoor seating and bathrooms; near office complexes, college campuses, retail centers and downtown urban areas; at farmers markets, fairs and recreation destinations; and at private catering events from weddings to business conferences.

Community Focus

Mobile food vehicle operators certainly can’t rely on location alone. They depend also on building a fan base, providing a social gathering place and becoming part of the community.

Part of this effort is their much-publicized social media interactions. Along their average day of prepping food in a commissary, setting up their location, serving food, cleaning and restocking, they constantly interact with customers in person on site and via social networking throughout the day.

A social aspect on site is gained via accessible beverage dispensers and coolers, and condiment and toppings bars, which let guests not only customize their dish or drink, but pace their interaction to get quickly back to work or linger and chat with the other customers.

The interactive element takes place virtually as well. Many consumers, especially those under 30, express interest in social networking as a communication tool for MFVs. Only about 7% of consumers actively follow MFVs via social media, mostly using Facebook, but 84% of those who do follow MFVs check in at least once a week. Operators are keen to give these passionate fans a sense of ownership. For example, the Fukuburger truck in Las Vegas wanted to make customers feel like they know the concept intimately, so it posted video tour of the truck on YouTube.

In the future, MVFs will likely increase their customer traffic by generating more grassroots buzz. Currently only 12% of consumers reported they often hear about MFVs from friends or co-workers. But of those who have heard others talk about MFVs, 88% of consumers say they heard positive feedback. So getting these lines of communication open is critical.


Once customers visit an MFV, the operator does what he or she can to bring them back by making them feel comfortable and appreciated.

Many MFVs offer a range of “small touch” items and other considerations to truly provide a complete, high level customer experience. This includes appropriate packaging, which not only presents the brand image, but also preserves product integrity. Packaging can also improve the experience. The Mighty Cone in Austin, TX, serves tortilla-wrapped ingredients in paper cones. The operator also developed wooden holders and attached them to the picnic tables outside the trailer so customers can set down their cone-shaped products between bites.

Consumers have indicated that certain amenities at MFV sites can be important to their overall dining experience. Trash receptacles (66%), seating (25%) and credit-card acceptance (17%) were among those mentioned as important. Other amenities observed during on-site visits included: bathrooms, parking, protection from the elements and ATMs.

To make customers feel welcome, some operators have involved their fans in marketing efforts. At Short Leash Hot Dogs in Phoenix, the Hot Dog of the Week is typically named after a customer’s dog and includes flavor, ingredient and spice profiles representative of the pet’s personality. The owners say this has been a great way to learn more about customers and show appreciation.

A Twist on Grandma’s Kitchen

As at all foodservice establishments, however, it’s all about the food. Where MFVs are concerned, many are seeing success with offering a twist on comfort food, often with an artisanal appeal.

For example, Torched Goodness in Phoenix is owned by a Le Cordon Bleu-trained chef and crème brûlée, a dish consumers are not likely to prepare at home. He showcases skills by melting the sugar in view of customers. In Austin, TX, authentic Asian food like Chicken Pad Thai is prepared using a wok located inside the Coat & Thai food truck. And a custom griddle allows Wafels & Dinges in New York City to prepare its famous Belgian waffles to order as customers watch.

Many operators feel they are expressing individuality through their unique creations, and the result is menu innovation that’s worth watching.

In some cases, operators offer a unique twist on a common item, such as the Pork & Beans sandwich at Chicago’s gastro-wagon, which fills naan with pork, black beans, cilantro, onion and Chihuahua cheese; or Aiko hot dog at Short Leash, topped with mango chutney, diced jalapenos, red onion, cilantro and mayo.

Ethnic influence is evident as well, such as Fukuburger’s Tamago Egg Burger, topped with a fried egg, crispy onion strings, teriyaki and Japanese seasonings; and Los Angeles’ Kogi’s street tacos filled with Korean barbecue.

You’ll also find many operators using local and seasonal ingredients, which also plays to their community focus.

Driving Growth

We are often asked if we see food trucks as a passing fad or an ongoing trend. We asked consumers that question, and fully 91% of those who had heard about mobile food vehicles say they have staying power. Across all dayparts and MFV types, the vast majority of consumers who used MFVs were satisfied with their experience. Based on consumer and operator input, we predict to trend to continue and evolve.

Darren Tristano is Executive Vice President of Technomic Inc., a Chicago-based foodservice consultancy and research firm. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations. For more information, visit http://www.technomic.com.

This article came from a print version of M&C Report

CEO Gets Sandwich Chain in Shipshape for Major Expansion

March 9, 2012

CEO Gets

CEO Gets Sandwich Chain in Shipshape for Major Expansion

The president and CEO of Submarina Inc. has taken on the complex task of reorganizing and growing the nearly 35-year-old restaurant company, a corporate equivalent of the multilayered process that goes into creating its made-to-order sandwiches.

Taking the reins in mid-2010, Bruce Rosenthal wasted no time replacing a prior executive team, moving to cut admintstrative overhead at headquarters in San Marcos. Most important, says the longtime investment banker and food connoisseur, was streamlining operations to make them more accountable and responsive to franchisees, whom Submarina California Subs most relies on for success, as it competes against Subway, Quiznos and a host of other sandwich shops.

“Submarina had people with tremendous skill sets and knowledge in the corporate office and great-performing franchisees, but the decisions of prior leadership turned the company upside down,” said Rosenthal, whose experience spans industries ranging from retail to energy and real estate. “In spite of the management missteps, the thing that saved Submarina is that we have a very loyal customer base that loves the quality of our food.”

Changes at the Top

A private equity fund managed by Rosenthal bought most of the assets and the rights to the Submarina name in late 2009. Nine months later, Rosenthal requested the prior CEO’s resignation and assumed operational control, then moved to reinvigorate the company’s area franchise developer network.

That included restructuring the marketing and promotional fund to give proven developers authority and control over local advertising. The company renegotiated its logistics contract and found a new supplier for its restaurants, and Rosenthal used his retail and real estate know-how to help franchisees select locations.

With those elements in place, the company is now looking to expand beyond its current slate of 53 restaurants, including 25 in San Diego County. It plans to open six to eight new eateries in the first quarter of 2012, with more than 20 debuts projected by the end of 2012.

If plans proceed as Rosenthal is projecting, Submarina’s reach would extend well beyond its Southern California home base, and it could have a total of 500 restaurants up and running within five years. In recent months, the company debuted franchised restaurants in Georgia, Ohio, Michigan, New York and Tennessee.

Before the end of 2012, Rosenthal said Submarina will open its first restaurant in Hawaii and its fourth in Guam. Florida and Texas will be key target markets, with the company recently setting a goal of 30 locations for the Lone Star State in the next 30 months.

The competitive and economic landscape is daunting. According to restaurant industry consulting firm Technomic Inc., Submarina competes in a sandwich segment that has grown to more than 30 national and regional chains that posted more than $23 billion in 2010 U.S. sales, up 1.5 percent from the prior year.

The category’s 800-pound gorilla is Connecticut-based Subway, with a market share of nearly 46 percent, more than 23,000 U.S. locations and 2010 sales of $10.6 billion, up 6 percent from 2009.

Technomic estimates that Submarina had 2010 sales of approximately $17 million, with annual sales holding between $17 million and $19 million during the past three years.

Darren Tristano, an executive vice president with Technomic, said Submarina will be up against not only national chains, but also numerous and long-established independent restaurants serving sandwiches in the markets where it wishes to expand. He said the company will likely look to differentiate itself with an approach that has worked well in California, focused on healthier and lighter fare.

A Taste of Success

“It gets to the point with these chains where you’re looking at saturation,” Tristano said. “They have to offer a different style of sandwich, or a different method of flavoring or preparation.”

Former U.S. Postal Service workers Les Warfield and Ron Vickers started Submarina in 1977, with their first restaurant in Poway. They subsequently turned daily operations over to other investors and managers, although they remain franchisees, and Warfield’s son, Jeff, is now a multi-unit franchisee and area developer for Riverside, Orange and Los Angeles counties.

The privately held company does not disclose finances, but Rosenthal said Submarina is holding its own by focusing on the quality of meats, cheeses and produce in its sandwiches and salads, rather than trying to compete on price with giants like Subway.

In coming months, it will be introducing new salads and dressings, and doing more on-premises baking of its sandwich bread at some locations. There will be experiments with food delivery, and more use of Web and mobile technology that lets customers order items for pickup.

“We’re working within the constraints of a tough economy,” Rosenthal said. “But we are not looking to tread water–we’re looking to grow.”

View the full article on San Diego Business Journal