By Lindsay William-Ross | The VanCity Buzz
Over the past few years, the street food scene in Vancouver has exploded, and food truck dining has become part of our way of life.
With anything from the humble hot dog to high-quality seafood dishes coming off carts and trucks, Vancouverites and visitors have a buffet of options when it comes to street eats. There’s one continual grumble, however, and that’s the price–Vancouver’s street food has a reputation as being “too expensive.”
How far off is the perception from the reality? We talked to several street vending business insiders to learn more about their cost of doing business, how they price their items, and what it takes for them to be successful, all while giving customers the food and experience they’re looking for.
The cost of doing business
First, the City of Vancouver has to grant a street food vendor a permit. While they’ve increased the number of permits available annually since 2011, in 2014, the city froze new permit applications, pending further review of their food vending program.
A rep from the City of Vancouver explained that the cost of the vendor’s license is based on the cost of operating the city’s food truck program. Vancouver’s City Council approves the fees and any annual increases. The most recent posted rates were an application fee of $50.00 per location and a permit fee of $1084.02, plus $54.20 tax for a total of $1188.22.
There are then a number of other costs that factor into a truck’s operation. In 2012, Re-Up BBQ took the issue of cost head-on in a direct rebuttal to an item in Business in Vancouverabout local restaurants feeling unduly challenged by the presence of food trucks.
Re-Up identifies all of their cost considerations for food truck operation as including commissary rent (base location for food prep), parking during selling times, permit fees, overnight parking, gas, propane, insurance, electricity at commissary, labour (including maintaining the vehicle’s kitchen before and after transport), the cart or truck itself, and a vehicle to tow the trailer (if using a hitched cart).
And yet, in talking to others in the industry, what Re-Up names are only a few of the cost considerations. For example, while some vendors may opt to get creative and barter in trade, or take on something like marketing themselves using free tools like Twitter, others may be adding to their bottom line with PR costs, as well as their products’ packaging. (Re-Up did not respond to our request for an interview for this article.)
As any other business, street food vendors have to set their prices based on their overhead and making a profit. The Juice Truck‘s Ryan Slater explains that he and business partner Zach Berman “consider the truck much the same as we would a store,” when it comes to operational costs and pricing. Slater says commissary rent and parking roughly equate rent in a brick-and-mortar location, and the truck’s generator and propane costs their “hydro bill.”
Like any food business, Slater says their prices have to reflect the fluctuating market, striking a comfortable balance to account for things like this year’s lime shortage, which drives their food costs up.
Setting the price
Food costs seem to be a prime factor in determining street food prices, and while the market has tremendous influence, so does the consumer. Steve Kuan of the popular Le Tigre food truck says for his business “the food cost is very high because Vancouver people want everything eco-friendly and local, if not organic. It all comes with a price.”
The City of Vancouver’s own “Greenest City” agenda to some extent sets the tone when it comes to street food pricing. “The city chose food carts that have large uses of organic, fair trade, and sustainable ingredients, and with that can come a slightly higher price point,” remarks Slater.
For consumers savvy to Vancouver’s robust food scene, the lexicon associated with high-quality ingredients is familiar; it’s the Ocean Wise seafood, free-range poultry, pesticide-free produce, and so on–it’s exactly what inspired that iconic “Is it Local?” restaurant sketch on TV’s “Portlandia.” While those kinds of ingredientss are not necessarily going into your curbside mustard-and-onions hot dog, the brethren of the new wave so-called “gourmet” food trucks are, in fact, using those kinds of ingredients.
Take Yolk’s Breakfast, for instance. They run both a brick-and-mortar and street vending operations, and draw in hungry hordes for their Croque Madame made with “free range soft poached egg” or their “crispy, organic pork belly confit.” In this new era of street food, the game has been significantly upped, and locals and visitors have come to expect it from the trucks and carts they support.
Michelle Ng is the founder of Foodie Tours. She’s operated the “World’s Best Food Truck Tour” spotlighting Vancouver’s street food vendors since the spring of 2011, with a client base split an estimated 65 percent tourists and 35 percent locals. Ng agrees that Vancouver’s street food is a showcase for top-notch food. “The quality of ingredients many of these food trucks use are extremely fresh, hyper-local, and wild and/or organic,” she points out.
Oftentimes the consumer base also needs a little time to understand the value of what is being sold. The Juice Truck, for example, was Canada’s first cold-pressed juice bar three years ago, and the product somewhat unfamiliar to Vancouver’s consumers.
“At first, we had to educate the public on what cold pressed was and why it was different to anything they had drunk before,” explains Slater. “Within a couple months our regulars were researching prices in New York and Los Angeles, where cold pressed juice is $10-$11, and understood our price point as being much more affordable than in the U.S.”
Field echoes the importance of what the consumer believes when they pay up at a food truck or cart: “It comes down to – what’s the perceived value of the product? So quality, convenience, availability, the ambiance and customer experience all come into play.”
Kuan says he’s heard back from Le Tigre customers that they feel they are getting their money’s worth. “Our feedback is generally great,” he elaborates, adding his customers appreciate their affordable prices and big portions.
Add the higher cost of ingredients to most vendors’ tally sheet, plus the standard costs of operation, and the savvy of the seller and the buyer, and it’s time to come up with a price that will let the food vendor make a living.
“All businesses have to balance operating costs with revenue generation to be profitable. This is part of the business planning process and pricing strategy- knowing the food costs, labour costs, fixed and variable costs, having conducted market research and competitive analysis to determine pricing that is palatable (no pun intended) to the street food vendor consumer,” notes Field.
Apples and oranges
Customers in Vancouver may be tempted to compare the price of local street food to what they’ve experienced in other cities with a food truck scene, particularly those across the border in the States, but the comparisons are not really on equal footing.
Grilled cheese sandwiches from Los Angeles’ Grilled Cheese Truck run USD $3 to $5.50 for simple bread-and-cheese pairings, and more specialty items run upwards of USD $7.75. In Portland, the Grilled Cheese Grill has basic sandwiches for USD $4.50, and more specialty sandwiches from USD $6.75 to $7.50. Vancouver’s Mom’s Grilled Cheese Truck has a plain sandwich for CDN $8 and specialty offerings for CDN $10.00.
Firstly, there is the exchange rate that accounts for a portion of the discrepancy. Then you’ll have to factor in the variable tax and labour costs among the cities.
“If you’re comparing [Vancouver street food] prices with American prices, then yes, we can be perceived as expensive, however, our cost structures and taxes are also higher than what you’ll find south of the border,” comments Ng.
Ultimately, what it comes down to is that food over all is overwhelmingly more expensive in Canada than the U.S. Food as a whole was 57% more expensive in Canada than in the U.S. in 2011, and specifically meats, milk, cheese, and eggs 76-77% more expensive in Canada than in the U.S., according to a study published this year. Food prices in Canada, further, aren’t getting any cheaper.
Vancouverites can take comfort that pricing here is on par with food trucks in other Canadian cities, however. Calgary’s Cheezy Bizness truck has a basic grilled cheese for CDN $7.50 and specialty sandwiches in the CDN $9.50-$10 range. Calgarian street food vendors, obviously, are factoring in similar food, labour, and other costs when pricing their wares; have a limited high-volume selling season due to weather; and, like Vancouver’s vendors, too, want to make a profit.
Sometimes it rains in Vancouver
Profitability, of course, for any business owner, means staying in the red, and maybe even saving a few pennies for that proverbial rainy day. And it just so happens it rains every now and then in Vancouver.
Unlike in Los Angeles, the generally sunny and warm Southern California city considered the “birthplace” of the new generation of high-end street food (thanks to Roy Choi’s Kogi BBQtruck), Vancouver food trucks and carts face four seasons and some often wet and windy days.
The Juice Truck’s Slater acknowledges the role weather has in the biz: “Weather can play a large drop in sales for certain trucks. Cold weather is less of a deterrent then rain is. We looked at the differences between summer and winter sales, but did not take it into major account of setting our price points.”
Slater adds that it is, in the end, more of a balancing act than a direct trigger when it comes to setting the price: “Some trucks make the bulk of their sales in the summer months, and consistency in there price points throughout the year, is how some simply pay the bills in the winter and still operate year round.”
Similarly, Le Tigre’s Kuan says he doesn’t think weather is a direct factor in pricing.
Summer is key for food truck vendors. “June to August are the make it or break months, as business is significantly slower the rest of the year, so truck owners have a small window in a given year to make the money, and to save for rainy days,” observes Ng. Further, it’s during summer that there are increased opportunities for trucks to make money, thanks to music festivals, outdoor farmers’ markets, and street food-focused events. By taking advantage of those opportunities, a vendor can raise their profile and their profits to help them stay afloat. In fact, without diversifying their operations, many food trucks are hard-pressed to succeed.
Branching out to stay in business
“The most successful street food vendors have diversified, either by selling product to retail locations or once they have been successful at street vending opening a retail location,” remarks Field, citing The Juice Truck and their recent expansion into a brick-and-mortar location as an example. “Also many of the street food vendors also provide catering,” Field adds.
The Juice Truck is the latest in their field to take things from the truck to four walls. In late 2012, Re-Up BBQ opened a modest-sized counter service restaurant inside New Westminster’s River Market. “It IS comparatively cheaper to run than our food cart,” Re-Up BBQ wrote of the endeavour. Slater says The Juice Truck keeps their pricing “fairly consistent” between the truck and the shop. “A brick and mortar location does have higher overheads, but does allow for longer operating times to help balance it out,” Slater notes.
Many food truck operators use their trucks to build a reputation in the business, which can help foster funding for more permanent plans. Not surprisingly, owners of popular food trucks like Le Tigre share that goal. Kuan says he’s ready for Le Tigre to move forward:
“Since we only have [had] the truck for two years, and have been constantly building up our clientele, our goal is to maintain what we provide to our customers,and see ourselves transitioning from truck to restaurant in the next year. We want to have a restaurant because that’s our original goal, but the start up cost was too much and too risky for us two-three years back then, before we had our truck.”
The Juice Truck’s Slater has a similar vision for his business: “We would eventually open a location in Gastown, and have the truck really be able to take on more events and become more mobile. Our truck is still a great marketing and branding tool, and having it’s traditional use of driving around will help to increase our brand awareness even more.”
Still, there’s something inherently special about getting a really good meal or snack from a cart or a truck on the street, even when it may feel like you’re shelling out more than you may have a few years before when the options were more limited and less novel.
“A Vancouver food truck experience is more communal than dining in a restaurant,” points out Ng. “People mingle and have conversations while waiting in line to order and when waiting for their food. You’ll also feel the buzz of the city so much more because you’re on the streets, often interacting directly with the food truck operators. It’s a fun experience and great for those who enjoy an edgier experience!”
When you fork up the Butter Chicken from Vij’s Railway Express, or devour a JapadogTerimayo dog, you’re biting and buying more than just lunch. It’s a unique experience that’s part of the city’s cultural and financial ecosystem. It’s just not often “cheap.” So this is where we came in.
Are Vancouver’s food trucks “too expensive”?
Maybe it’s a matter of managing expectations. “If you’re comparing Vancouver food truck prices to Vancouver restaurants and even the food court, you’ll see that the prices are actually very fair,” cautions Ng. Besides, food trucks that sell items with notably higher prices aren’t going to be serving up for long, points out Kuan. A truck that is “overly expensive does not last too long in the food truck scene in Vancouver,” says the Le Tigre operator.
Consumers also need to bear in mind they’re not only paying for a product from a business that wants to stay in business, but a business that offers good food and an alternative dining experience.
“I think the price point is reflected in both the ingredients and in the unique dishes offered,” says Slater. “Similar items in restaurants cost around the same, and while the setting may be different and not liked by all, lots of consumers enjoy supporting small business owners trying to get into the hospitality industry.”
Street food culture in Vancouver–and, increasingly, in its suburbs–seems to be staying put for a while, even if it’s a business based on being on the move. Where trucks and carts go, paying customers follow. Sounds like a recipe for success.