Food Notes

Vancity report reveals high turnover in B.C.'s $50-million food truck industry

by Charlie Smith on July 28th, 2015 at 7:03 AM
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      B.C.'s food-truck sector is experiencing some serious growing pains, according to a new report by Vancity.

      It notes that there are approximately 305 food trucks operating in Metro Vancouver and Victoria, generating annual revenues of $50 million.

      The report cites Industry Canada statistics revealing that 29 percent of mobile-food businesses are not profitable and the average net income is only $31,300.

      Vancity's report also highlights a StreetFood Vancouver Society estimate of an 80 percent turnover among Vancouver's vendors.

      This is "mostly due to the cost of commissary kitchens and insufficient demand at some fixed permit locations".

      "For the operators spoken to in this research, the reality of a food truck could hardly be further from the 'golden ticket' many believe it to be," the report states. "Local organic ingredients are expensive, margins are thin, bottom-line boosting alcohol sales are not allowed and there are few economies of scale."

      In addition, entrepreneurs often overlook other significant costs, such as motor-vehicle and liability insurance, permit fees, propane, gas, and parking meters, which can reach $500 per month in downtown Vancouver.

      Then there's the expense of renting commissary kitchen space, which is required in Vancouver. According to the report, this is in short supply.

      The overall B.C. restaurant and food-service industry is in the $11-billion range. That amounts to about 4.6 percent of provincial gross domestic product.

      The report notes that consumers can help food-truck operators by paying in cash, which eliminates credit-card vendor fees.

      It adds that municipalities can nurture this industry by "addressing the competitive threat to local restaurants, extending mobile business licensing to mobile food vendors and being realistic about locations".

      Vancity's report encourages entrepreneurs to build a solid business plan, do some mystery shopping at other food trucks, and find other work in the off-season.

      Comments

      7 Comments

      Natty

      Jul 28, 2015 at 7:45am

      Being that I watch a lot of Food Network, I'm not really surprised to hear. In a Canadian food truck show, the operators get excited when they make $200-$300 over the course of 4 hours. Not exactly the cash cow business many people dream of.

      RealityCheck

      Jul 28, 2015 at 11:04am

      It doesn't help that many of the food trucks themselves are a big letdown. Vancouver has always been a city where good restaurants close because great ones opened nearby. With a few really good exceptions, most of the food trucks serve average to mediocre street food.

      Also, there's zero reason why with their low overhead, prices are higher than nearby restaurants. If you're serving street food, you have to be competitive with Vancouver's plentiful & excellent nearby alternatives.

      Re: Reality Check

      Jul 28, 2015 at 11:56am

      You're spot on. Fads can only carry you for so long. I would say the food is out right bad and expensive.

      Dean

      Jul 28, 2015 at 1:41pm

      I find the food pretty variable. Some carts have fricken delicious food while others are pretty mediocre. You kind of hope that out of a cart they can focus on a handful of really good items. The prices are definitely not cheap but I wouldn't say they're super expensive either.
      I suspect that while it seems that overhead is inexpensive, the carts have to deal with financing a cart/truck, licensing/fees, paying for a commissary to prep food, moving and storing their truck daily (vs a lot of stationary carts in Portland), and a somewhat limited season. I try to go to food trucks in downtown all throughout the year and I can tell you the difference in the number of customers between summer and once the rain starts is night and day.
      And to top it off, Vancouver has a pretty competitive food scene.

      Xander Davis

      Jul 28, 2015 at 4:22pm

      And there was 1,000 percent rental handovers when some licenciées "sold" their licence to another sucker.

      Commissary Licensing Issues

      Jul 29, 2015 at 11:37am

      Then there's the commissary issue factor. The city desperately wants the food business to succeed but has no actual "Commissary" license for businesses to get. I know, I've tried. They want to stick commissaries under titles like catering or manufacturing and then say that license is deemed a safety risk and won't hand one out. The City of Vancouver needs to catch-up on demand so that other businesses (like me), can help small businesses like food trucks (and others that you see at farmer markets) succeed. If the city wants this to work they better get into this century. Create a specific commissary business license and allow stationary trucks.

      Olly

      Jul 29, 2015 at 1:47pm

      Once again the city ties the hands of the little guy with red tape only to cater to those that can afford to play (Vij's truck, Tacofino). Most of the offerings are overpriced and quite frankly boring. Burger $2.85 may not be the best burger in town but at less than $3 it is fast street food. Most food trucks charge in the $9+ range for mostly crap which is hardly considered cheap food to soak up the late-night booze.

      Another Fail for the most boring city in North America.