Food truck industry growth has only grown in strength over the past five years and is one of the best performing segments in the broader food-service sector. The industry’s remarkable rise began in 2008, just as the recession hit, as hundreds of new vendors recognized changing consumer preferences favoring unique, gourmet cuisine.
Food Truck Industry Growth: Why?
Cities such as Portland, OR; Austin, TX; and Los Angeles sought to differentiate themselves by crafting laws and creating areas specially designed for mobile food trucks. While the recession put the brakes on the broader food-services sector from 2008 to 2009, it was in fact a boon for food truck industry growth as consumers sought to maximize their disposable income by indulging in small conveniences such the affordable gourmet food.
As a result, industry revenue has increased at an impressive annualized rate of 12.4% over the five years to 2014.
Despite strong industry-wide performance, some operators have been held back by city regulations, increased competition and low profit margins. Laws governing food trucks differ between cities, with most specifying what hours a food truck can operate and the distance a food truck must be from the nearest brick-and-mortar restaurant. The industry competes directly with the broader food-services sector, and some brick-and-mortar establishments that pay taxes have lobbied against the industry. Also, in many cities, the industry has begun to reach saturation point, resulting in lower profit margins for some operators. As a result, growth has slowed over the past few years. In 2014 the industry is expected to grow at a slower rate than that of the past five years, posting a 4.4% gain to reach $803.8 million.
Food Truck Industry Growth: The Future
The industry will face various challenges over the next five years, most crucially regulatory hurdles, which have restricted the industry’s growth over the past five years. Parking laws and other city ordinances are still evolving in many cities to catch up with the industry’s transformation. Industry associations will need to work closely with city governments and other restaurateurs to resolve these issues if food trucks are to play a bigger role in the country’s food-services sector. Still, growing household incomes and changing consumer preferences toward healthy and gourmet cuisine will spur growth over the next five years.
The food truck industry exhibits a low level of concentration due to the highly fragmented nature of the industry. New enterprises have entered the industry at a faster rate, causing the industry to become more fragmented. This trend to will persist in the upcoming years as mobile food vending becomes popular in less saturated regions.
Find the entire report on the food truck industry growth <here>