In the last five years, the street vendors’ segment has evolved from providing basic food options such as hot dogs and fries to supplying a diverse range of gourmet meals — thanks in large part to the increased number of food trucks popping up in Canada’s major urban centres.
According to the 2015 IBIS World Industry Report “Street Vendors in Canada” by Andrew Alvarez, support from municipal governments has helped encourage industry growth by offering permits to vendors that serve unique and diverse food, allowing food trucks to tap into consumer trends — namely the demand for higher-quality food, greater variety and better presentation.
“An increasing number of urban dwellers seeking proximate and convenient food options bodes well for street vendors because most industry revenue is earned in cities,” says Alvarez in the report. “Most importantly, regulatory barriers have been lowered in many municipalities to enable a greater number of food trucks to serve a growing number of consumers seeking gourmet food options.”
Robert Carter, executive director, Foodservice Canada with Toronto-based NPD Group estimates that although the percentage of food truck sales in Canada represents a small portion of the market (about 0.5 per cent of overall restaurant sales), the awareness and conversation around it is much higher.
“A lot of the awareness of the food-truck phenomenon is coming up through the U.S. and people in Canada jumped on the bandwagon — especially in the Vancouver area, which has a very healthy food truck business,” he says.
Even Calgary, which boasts both unique food-truck concepts and extensions of existing brands, and Toronto have embraced food trucks, although Carter says “In Toronto [the segment] seems to have sputtered and not really taken off as it has in Vancouver” due mainly to the city’s restrictive bylaws.
“The reality is that in large urban centres we’re running into traffic problems and congestion,” says Geoff Wilson, a founding principal of FsStrategy in Toronto. “[Toronto] Mayor [John] Tory has been focusing on this for some time and it was part of his election platform. Politicians never want to put business people into situations where they potentially lose business — the traffic issue is becoming more of a flash point for voters. We’re going to see cities being more aggressive in terms of where you can and cannot park a food truck.”
He says the City of Toronto Mobile Food Strategy has specific measures in order to be fair to food-truck operators while balancing other parts of public life such as commuting, transit and unrestricted emergency vehicle access. Restrictions include not having more than three food trucks on the same block, at the same time, and trucks required to park a specified number of feet away from a restaurant.
According to Wilson, bricks-and-mortar restaurant operators often resent the presence of food trucks because they don’t pay property taxes, they don’t have the overhead costs and sometimes, it is argued, they aren’t subject to same regulations as bricks-and-mortar locations. “Food trucks are a thorn in the side of people paying rent to be in a location — a food truck pulls up and parks outside your door and cuts your market.”
Carter, however, believes there’s room for both players. “We have a pretty strong restaurant industry from a bricks-and-mortar/unit count standpoint and half of the Canadian population goes out to a restaurant every single day — that’s a high penetration rate so it’s hard for food trucks to break in.”
He says the offerings food trucks can provide limit the number of times customers visit them in a week. “How many times can you have a pulled pork sandwich in a week?” Therefore, food trucks are perceived to be more of a special treat, as opposed to a regular, ongoing foodservice occasion — making it challenging for operators to generate enough consumer traffic to maintain a worthwhile business.
Steffen Marin, owner of the Toronto-based Heirloom food truck, believes the city’s restrictive food-truck bylaws are causing the segment to stagnate here. “Toronto is the biggest city in Canada. There should be food trucks on every corner like there are in Vancouver, Calgary and Edmonton. The mayors of those cities are open to [the presence of] food trucks being there.”
He says the competition complaint from bricks-and-mortar restaurants doesn’t fly since, especially in cities like Toronto, streets are lined with restaurants fighting for market share. “Realistically, if a customer has plans to eat at a specific restaurant and they see a food truck parked outside, they aren’t going to cancel their reservation to go eat a sandwich off a truck.”
Jenn Burko, owner of Bake Three Fifty, a custom cupcake and ice-cream sandwich truck, doesn’t rely on city streets to build her business. “I focus on food festivals and events rather than on the streets because you are guaranteed a steady stream of customers coming to you rather than parking on the side of a street and hoping 100 people come to buy your food.”
Cost of Entry
When Jenn Burko, who began her culinary career as a cake decorator, was planning her own business, she researched the costs involved in both a store front and a food truck. “When all was said and done, it was a no-brainer to go with the truck,” says Burko, who opened Bake Three Fifty in July 2015 at a cost of approximately $50,000. The price tag included the purchase of the truck itself, interior renovations, vinyl wrapping, a street license, equipment, lawyer fees and insurance.
“The biggest challenge was getting the paperwork filed and processed, getting inspections done on time for our opening — we bought the truck in May and our first event was July 28,” she says. Because of the type of equipment needed, the turnaround time was relatively quick. “We didn’t have deep fryers or ovens or propane tanks — only fridges, freezers and a generator. Our cookies and cupcakes are baked at a kitchen we rent space from because if you have propane on the truck, it limits where you are allowed to set up, especially if you want to do events indoors.”
For Marin, a 23-year-old graduate of London, Ont.-based Fanshawe College’s Artisanal Culinary Arts Program, the choice to go mobile was not just about the cost-savings, but about personal branding. “When I started the food truck I was 22 years old and didn’t have [the money] to start a restaurant. So the food truck was the only way to go to get your name out there with a lower cost,” says the young chef, whose Heirloom food truck serves locally sourced and sustainably produced food such as braised lamb sandwiches, duck sandwiches and whipped cheesecake (all of Heirloom’s menu items are under $10).
The final price tag on the truck was $65,000 — a worthwhile investment in his culinary future, says Marin. “I don’t even have friends anymore,” he jokes. “Getting my name out with the food truck, going to different cities, it’s building a name for the future.”
A Hard Road to Travel
It’s a tough part of the industry to be involved in, Carter says of the food-truck segment in Canada. “Within the Canadian marketplace, the biggest challenge is obviously the weather. Also, you have limited urban centres (Vancouver, Edmonton, Calgary, Toronto, Montreal and Halifax) in which to operate; the population is not large enough here and it’s too sparse to really have a thriving food truck industry.”
Burko extends her food truck season by operating as a preferred vendor at Toronto’s Enercare Centre, serving up tasty treats at indoor events all winter long. “In the winter I can’t be on the street or at festivals because my icing will freeze; let’s face it, no one really wants ice cream outside in -10 weather.”
Other challenges for food-truck operators come from within the foodservice industry itself, according to IBS World’s, report which shows the level of competition has increased in the past five years as more enterprises have entered the industry in an attempt to offer products that are perceived to be underserviced by existing operators. “The foodservice sector is large and diverse, offering all manner of cuisines at different price points. Street vendors need to compete within this broader sector against cafés, restaurants and other quick-service food providers. The industry also competes indirectly with supermarkets, grocers and convenience stores.”
In order to remain competitive, food-truck operators must effectively market their products to consumers, while capitalizing on areas in which there is a high amount of food traffic and opportunity for fast and consistent turnover.”
A Side of Social
Social media and food trucks are a match made in heaven. The very nature of the segment makes it impossible to use traditional media to communicate, so it’s no surprise social media has become the channel of choice “If you’re mobile, the cost of advising people through traditional media about where you’re going to be each day is horrendous. Social media is an instant marketing tool,” says Wilson.
According to Robert Burko, president and founder of Elite Email in Toronto, the most important reason for food trucks to use social media is also the most obvious. “Bricks-and-mortar businesses don’t move, so for traditional restaurants, the goal is to drive foot traffic to their location; you’re always there, so the way you market and drive awareness is based on your knowledge of your geographical area and how far people are willing to travel to your restaurant. Essentially once you’ve built brand awareness and people know where you’re located, you don’t really have to focus on location anymore, focusing instead on your menu, your chef or your specials.”
When you’re a food truck, he says, the game changes. “It becomes a game of ‘Where’s the food truck’ because it could be on Front St. one day and in Richmond Hill the next. From a marketing perspective, just conveying your location goes from something you’d put in the completely irrelevant column to being amazingly important, because if people can’t find your truck they can’t buy your food.”
Social media also offers a powerful branding tool for smaller operators who lack large marketing budgets. “They inherently need a grass-roots social-media advertising campaign,” says Burko. “Prior to social media, it was really challenging to build a brand for a small enterprise like a food truck. Now all of a sudden you have Twitter and Instagram and Facebook and Snapchat and a small business with an owner/operator/chef who is also the marketing manager and social- media coordinator. They are doing a brand-building exercise whether they know it or not — the more times they post on social media, the more people like it, the more they share it, the more they comment on it — that’s driving awareness.”
Room to Grow
As a result of Canada’s culinary explosion, IBS World’s report shows traditional street foods, such as hot dogs and poutine, have given way to a diverse range of gourmet street cuisine. “Furthermore, as consumers took a liking to the new and diverse offerings, food trucks have been able to satiate this demand through niche product offerings and high-quality gourmet options,” the report states. “Coupled with a rise in consumer spending, industry operators have been able to maintain strong demand for their products as a result of providing diverse offerings to consumers.” For these reasons, the report says the industry has performed better than the broader foodservice sector, which has suffered from diminished spending by consumers amid less options and higher prices.
“Food trucks are following the food trends in general,” says Wilson. “Local food, the ability to do fresh and prepared à la minute, customization — all those things can happen with a food truck and operators can quickly latch onto trends.
No one cuisine jumps out as being the go-to cuisine for food trucks, he adds. “That’s not the point. The point is flexibility.”
As Carter says, overall, food trucks are seen as providing a unique push on innovative food offerings that caters to some of the bigger trends taking place in the market — particularly in Canada — with a focus on stronger flavour profiles and ethnic offerings. “A lot of the successful trucks were ones with unique positioning in terms of the product offering,” he says. “A good point of difference, strong flavour profiles and unique menu offerings — all things that are resonating with today’s restaurant consumer.”
Volume 48, Number 3