Montreal, CAN: Food Truck Challenges

Gaëlle Cerf, left, Marc-André Leclerc and Hilary McGown take a break outside the Grumman 78 food truck last year: When he worked the 2010 Jazz Festival, Leclerc and his team served tacos from his food truck for adoring crowds for up to 16 hours a day. Photograph by: Dario Ayala , THE GAZETTE

By Lesley Chesterman  |  Montreal Gazette

Gaëlle Cerf, left, Marc-André Leclerc and Hilary McGown take a break outside the Grumman 78 food truck last year: When he worked the 2010 Jazz Festival, Leclerc and his team served tacos from his food truck for adoring crowds for up to 16 hours a day. Photograph by: Dario Ayala , THE GAZETTE
Gaëlle Cerf, left, Marc-André Leclerc and Hilary McGown take a break outside the Grumman 78 food truck last year: When he worked the 2010 Jazz Festival, Leclerc and his team served tacos from his food truck for adoring crowds for up to 16 hours a day.
Photograph by: Dario Ayala , THE GAZETTE

MONTREAL – Last year, Marc-André Leclerc made more than a million dollars in sales with his company Grumman 78. Famous for its production kitchen restaurant (known as “The Headquarters”) and now-defunct Faubourg Ste-Catherine food-court stand, Grumman 78 is best known for the tacos he sells from his Grumman 78 food truck. Despite the mass amount of media attention, last year, Leclerc didn’t pocket a dime. When he worked the 2010 jazz festival, he and his team served tacos from his food truck for adoring crowds for up to 16 hours a day. He spent many a night sleeping on his production kitchen sofa. Yet he came away $20,000 in the red. Though Grumman 78 is the pioneering food truck behind the whole “bring street food to Montreal” movement, Leclerc has yet to turn a profit. And he is not alone.

Highly anticipated, Montreal’s first wave of food trucks hit the streets this Thursday. Twenty-seven permits were awarded to trucks that will be sharing nine spots, divided into three shifts, chosen by the city. Judging by Leclerc’s experience, it will be a challenge for anyone running a food truck in Montreal to make any money doing it.“But it’s a challenge for anyone in any business,” says Leclerc, “especially with anything pertaining to the restaurant business. And it’s a pilot project, so who knows what will happen. It all comes down to what the food tastes like.”

Jason Apple, owner of Vancouver’s first food truck, Roaming Dragon, has been running his successful truck with partner Jory Simkin since June 2010.

He has a pretty good idea of what the food truck business entails. “Whenever someone tells me they want to operate a food truck,” he says, “I want to grab them by the shoulders and shake them.”

Like the visionary Leclerc, Apple was so convinced food trucks would be the wave of the future that he built his truck before they became legal in Vancouver in 2010. Vancouver permitted the sale of pre-packaged goods like popcorn, chestnuts and hotdogs, but in 2010, fully equipped food trucks were given the go-ahead as long as they had a rental kitchen for the majority of food production.

“My knee-jerk reaction is to tell people, ‘Don’t do it!’ It’s not like what you see on the Food Network show, Eat Street. The reality is that it’s challenging. It’s important that expectations be rounded in pragmatism. You need to find people who can give you honest feedback. You need to find a good product, and you can’t be married to your food truck. You have to adapt quickly to the market or die. And if you fail, fail fast and fail cheap. If it doesn’t work, pull the ’chute.”

Says Leclerc: “I get people asking me about running a food truck every day. I only do it because I love it. And I don’t lose money anymore, because after three years at it, I’m established.”

“I have this joke that I share with my partner,” Apple says. “If we had a dollar for every person who came up to us who wanted to start a food truck, we’d have simply gone into consulting.”

That’s exactly the direction Apple and Simkin have chosen to pursue with their company Gourmet Syndicate, which helps prospective food-truck operators design trucks and get going. And those who want to get going can count on spending between $30,000 and $150,000 for the truck alone. And then there are other expenses, says Leclerc, like four levels of insurance, between $500 and $3,000 monthly to rent a production kitchen (a prerequisite in both Vancouver and Montreal), gas, generator fees, parking, permits, staff, ingredients, and the list goes on.

“There’s a general lack of understanding of what it takes to manage a business, too,” Apple says. “When you run a food truck, you take care of everything from bookkeeping to cooking, to hiring staff to taking out the garbage. My standard line is, whatever you planned it would cost, you’re wrong. The reality is that there is no money for startups. The survival rate is falling. In Vancouver, we’re starting to see all sorts of unnamed food trucks for sale on Craigslist. A lot of people are willing to sell. And then there’s the personal cost as well. How many shifts can a food-truck owner handle without sacrificing his family life?”

Apple is not only the co-owner of Roaming Dragon, but also a partner in the city’s most successful food truck, Vij’s Railway Express. Vij is, of course, Vikram Vij, one of Canada’s most acclaimed chef-restaurateurs and the owner of the wildly popular Vij’s restaurant. His truck is everything you’d want a food truck to be: breathtaking in design, well-staffed, and serving the sort of upscale ethnic food that fits well into the street-food credo. Like Montreal, the city of Vancouver favours merchants who provide high-quality fare made with local ingredients. With lineups and press coverage galore, after only one year, Vij’s Railway Express has been a huge success. Or has it?

“I have yet to make a penny,” Vikram Vij says. “In fact, on average, I’ve lost $500 a month.”

The challenges for making a profit with a food truck are many, according to Vij.

“Labour costs are high because you need to have at least one trained chef in the truck. There are extra costs like gas, permits, electricity, insurance and parking to pay. So to break even, you have to cover $300 in salary costs, $300 in food cost, and $300 for extras, which means you have to sell $900 worth of food. On average, you can sell dishes for no more than $10, so that means 90 customers a day, which is a lot of people. Two hours of office rush is not enough. And you have no way to plan how many customers you’ll serve.”

For Leclerc, that number is more than double.

“I have to make $1,900 a day just to break even, which means I’m looking at a minimum of 140 customers a day.”

When asked whether it was worthwhile to keep his truck running at a loss, Vij enthusiastically says yes.

“My food truck is like a 16-foot billboard on the street that brings awareness to my restaurant. That $500 I lose every month replaces what I’d plan for a marketing budget. To me, the purpose of food trucks is to bring multiculturalism to the street. I think a truck like mine showcases diversity. And food trucks bring young entrepreneurs to the streets. But my advice to them is to make sure you have a game plan and have a unique product. And know your costs. Ultimately, operating a food truck will be dire if you don’t have deep pockets.”

Though initially enamoured by the idea of food trucks after visits to food-truck meccas like Los Angeles and Portland, Apple’s enthusiasm has been replace with a cold dose of realism.

“North American street food is successful in highly populated cities,” he says. “But it’s not yet part of the Canadian culture. The challenges are greater than in a restaurant, and completely amplified with a food truck. People don’t want to eat fast food, but they do want to eat fast, so cost and time are very limited. You have no solid roof, no heat, no seat to relax on, no reservations, and no alcohol sales. Some trucks can be profitable, but only with ridiculously high margins (because of low-cost ingredients). But that’s not in line with what the whole street-food movement is about. People expect our food to look sexy, to be cutting-edge.”

When Apple and Simkin launched Roaming Dragon, they got the lion’s share of media coverage from outlets like the Vancouver Sun, the Globe and Mail and Macleans magazine.

“We were flattered by all the attention,” Apple says. “We’d see these long lines and were thrilled. But then you realize that there is so much personalization to the dishes you’ve created that you can’t get ahead of anything. You have to make it good, fast and reasonably priced. You begin to streamline your menu. But the reality is that you want a menu with many options. ”

But to the Gourmet Syndicate operators, there’s a lot more to a food truck than simply food.

Says Apple: “Now that quality food is a given everywhere, you have to ask yourself what else can you do to mark the experience? If we just become a truck serving food, who cares? It’s about personalities, the owner greeting you, talking to you. Suddenly, the food tastes better if you like the owner of the truck. We have music at the truck. We give out little food samples to people waiting in line. I talk to the customers. People want that connection. I always say a food truck is like a beautiful woman, there needs to be something more than just looks. It should be performance art!”

Indeed, when you see the stunning design behind the vast majority of modern food trucks, you expect equally fabulous food. And yet in Vij’s and Apple’s experience, there is a limit to what customers will pay.

“Vancouver customers are super aware of quality,” Apple says. “yet that does not transfer into quality to pay. We were serving a spot prawn curry, made à la minute, in Vij’s truck with four spot prawns, basmati rice and naan bread made on-site. We were selling it for $12, and that would easily sell for $30 in a restaurant here. But the venom we got for selling a dish for that high a price was unreal. They said for that price they could cook a pound of spot prawns at home.”

In Montreal, however, Leclerc has had much success with upscale tacos.

“I made a foie gras taco that sold for $15,” says the chef, “and we sold out in two hours. But food-truck cuisine is a high-volume game, and high volume and expensive don’t go hand in hand.”

To Apple, the sweet spot for a food truck dish is about $10, but there are high expectations for that price. In Montreal, the city stipulates that food trucks are required to sell food that is “creative and original, presents an added value to city’s gastronomic landscape, stands out from the fast-food already on offer downtown, uses local products,” is “ ‘transformed’ on-site and excludes pre-packaged or factory-produce foodstuffs.”

Similar criteria are called for by the city of Vancouver as well.

As for the city demanding quality ingredients, Apple says, “For sure when you’re doing your presentation and being judged, the look of the food and the ingredients will be as good as Thomas Keller. You’ll say, ‘Yes, we are using local and organic ingredients!’ But you can only sell a taco in Vancouver for $3 to $3.50 and if you go local and organic, meaning hormone-free and antibiotic-free meats, your food cost is going up to 60 per cent. And that’s before factoring in costs like staff and truck maintenance. Those demands become such a challenge. The city should do an audit just to see if people are sticking to what they’d say they’d do. Meanwhile, in L.A., the food trucks are using tails and lips for the meat in their tacos”

Apple, Vij and Leclerc all agree that street sales from the truck alone are not a money-making proposition. That’s why most of them have a sideline in a bricks and mortar restaurant, and/or catering events using the truck.

“There’s a lure that has been out there for a while that you can clean up doing this,” says Apple, “but in Canada, it’s not something that has been genetically ingrained into our way of life like in New York or L.A. We don’t have southern Californian weather. Just the elements alone mean we have a limited season. And then the truck breaks down and the water lines freeze up. But when it’s cold and rainy, I can’t just decide not to take the truck out. That’s not fair to my employees or customers. In fall, in winter, those are the seasons where you see if your brand can survive. It’s social media, social media, social media all the time. I see some slow food-truck deaths around me.”

And yet it’s not all doom and gloom to even these three successful food truck owners.

“I love driving the truck itself,” Leclerc says. “The attention we get is amazing, very flattering. We make people happy.”

Apple also mentions the love, attention and uniqueness that goes into making his food, and for Vij, it’s the chance for ethnic food to reach a greater audience.

Says Apple: “The beauty of the food truck is that it provides accessibility and approachability to the brand, which is awesome. People are in awe of the trucks, and you watch yourself becoming the voice and the personality of the truck. We love the response, we love being outside, and we love meeting all these characters. But that fun comes and goes in waves. Every once and a while I stop and wonder, what am I doing? And then a cool email comes in or a nice article gets published about us and we’re happy. But then I think, what about all those food trucks that don’t get that kind of attention?”