Like thousands of other downtown Minneapolis workers, I continue to be surprised and delighted by the proliferation and popularity of food trucks on our downtown streets during the busy lunch hour. Besides the tasty food many of them are serving, I love how the food trucks bring office workers out of our skyways and back down to the street for at least a few months out of the year. Some, like the Smack Shack, have even garnered national acclaim for their dishes.
This trend has recently taken off in Minneapolis, just as it has in many other parts of the country where food trucks have not been part of the traditional cityscape. In April of this year, the Minneapolis City Council voted to increase the number of food trucks allowed in the city (after issuing just 10 licenses in 2010), as well as to allow food trucks to operate in neighborhoods of the city beyond downtown. Restaurant industry associations have taken note. The National Restaurant Association cited an increase in mobile food trucks as one of its highlighted findings in a recent study of industry trends. A couple of months ago, Entrepreneur Magazine also published an article describing to entrepreneurs how they might go about starting a food truck.
I have a personal interest in the hospitality industry, so I read blogs and other local and national media about restaurants and hotels. With food trucks being such a dominant national trend over the past couple of years, I have read many articles that, not surprisingly, assert a correlation between our economic downturn and the marked increase in food trucks. The vast majority of the articles I’ve read focus on this correlation from the consumer’s side—essentially, that food trucks have grown and prospered during this time of economic hardship because consumers have less disposable income and/or are more reluctant to spend money on luxuries like dining out.
While I’m certain that consumers’ financial stability (or lack thereof) has played a role, in my mind it is only part of the story. To me, the lack of access to lending and investment capital is just as important a factor. These are two sides of the same coin. The food truck is where a chef’s inability to raise the several hundred thousand dollars it costs to launch a new restaurant meets diners who are unwilling to spend the $20 they used to spend on lunch and want to spend $10 instead for comparable food. Diners needed ways to satisfy their desires for restaurant-quality food, and chefs and restaurateurs needed a way to start their restaurant businesses with less capital required up front.
If there is such a thing as a silver lining in the context of the global recession that has taken a serious toll on our wealth and psyche, it’s innovation inspired by changing conditions. Entrepreneurs are forced to adapt, just as consumers are. If there aren’t investors or banks willing to lend as much capital as is necessary for an aspiring restaurant owner to lease a space, furnish and decorate it, to hire several cooks and front of the house staff, and to develop a complete menu, maybe the entrepreneur can scrape together just enough to buy or rent a food truck, hire one or two additional staff, and make a limited menu of high-quality specialties. When would-be entrepreneurs in an industry are feeling more risk averse than they might in times of economic growth, food trucks are a great example of how they figure out a way to dip their toes in the water without diving into the deep end head first. The result is a greater diversity of products and services that satisfies more diverse consumer needs.
A Post by Alyssa Hirschfeld, Guest Blogger
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