When we first looked at mobile vending, Mark’s Carts in Ann Arbor had only just opened and El Guapo, the popular taco and burrito truck based in Madison Heights, was at the end of a year-long challenge with the city of Detroit to get mobile vending laws changed to allow more to operate on the streets. (Their 60 trips to city hall is now the stuff of local legend.) As mobile vending momentum gained, Ferndale took a “come one, come all” approach, but not without some backlash from brick and mortar businesses that felt mobile vendors were at an unfair advantage.
Now here we are, almost two years later, and mobile vendors seem to have found a comfortable place in the marketplace. While no laws have changed allowing these businesses to operate freely on the streets, there is now a more comfortable set of rules governing their operation – where the health department didn’t seem to know what to do with them initially, the difficulties that the early adopters once faced seem to have diminished and there’s a general (if not yet entirely consistent) consensus as to what they need to do in order to legally operate.
Two years ago we could count on one hand the number of legally operating food trucks in greater metro Detroit. That number has since swelled to around 20, with an ever-increasing number in the works. Right now you can catch El Guapo, the Mac Shack, Treat Dreams, Ned’s Travelburger, Concrete Cuisine, Green Zebra, Jacques’ Tacos, the Grindhouse, Dago Joe’s, Taco Mama, People’s Pierogi Collective, Debajo del Sol, Franks Anatra, Cheese Dream, Beignets, and Buffy’s Mexi-casion at various food truck meet-up events in Detroit, Royal Oak, Ferndale, Dearborn, Mt. Clemens, Novi, Waterford, Allen Park, and Plymouth.
Motor City Street Eats, a sort of food truck collective operated by Jacques’ Tacos co-owner Jim Mastrangel, oversees the organization of the bulk of local food truck rallies and has grown from once-monthly events at the Royal Oak Farmers Market to regular weekly events all over metro Detroit. These same food trucks have also become a staple of local events with a regular presence at art fairs, street and music festivals, and major sporting events. Private companies, like Quicken Loans in Detroit and Valassis in Livonia, often organize food truck rallies for their employees’ lunch hours or invite individual trucks to set up shop in their privately-owned parking lots – currently the only way trucks can legally park and serve. You can also catch a mini fleet of food trucks at places like Eastern Market, Campus Martius, and Wayne State University, depending on the day.
Food trucks in the driver’s seat
El Guapo hit the streets in July 2011 after co-owner Anthony Curis spent a year working with the city of Detroit to get proper licensing, paving the way for other would-be mobile vendors to do the same. In December 2011, Dan Gearig, who started in the mobile food industry as a film caterer, came on board as his business partner.
They started by getting El Guapo “tuned up” to where they wanted it to be. El Guapo fit their vision, then came the Mac Shack in May 2012. “We figured we make tacos, we make burritos, everybody loves that. The other thing everyone loves is mac and cheese,” Gearig says. He had his own mac and cheese recipe he had been using, so they invested $20,000 in getting the Mac Shack cart and website built. Within a year it has already been a huge success for them.
All of their business is done through food truck rallies, special events, and their spots at Campus Martius and Wayne State University. And at event after event, people happily stand in line for their food. “The people want more street food! We just love our customers and how happy they are to stand in line. You don’t see that too often – people standing in line for anything other than iPhones,” Gearig says.
While asking a food truck owner how much money he makes is akin to asking a woman her age, it can be said that El Guapo and the Mac Shack bring in enough cash to reinvest in the business and pay the owners and employers a living wage.
One of the advantages always touted about mobile vending is the low barrier to entry. Regarding the Mac Shack’s low start-up cost, Gearig says, “It’s just a testament to how cheaply you can do this. You don’t need a ton of money. It’s such a great crash course in food entrepreneurship in general.” The partners just bought another (fully mobile) truck for the Mac Shack that will hit the streets this month, allowing them to double their presence.
The growth of mobile vending in metro Detroit inspired Gearig to launch a third business: Red Beard Customs. “It’s annoying to me to see people shopping out of the state for these trucks when we have the best engines and the best fabricators in the world here in Detroit,” he says. “I don’t see any reason to send any more people out of our city.”
So he launched Red Beard Customs six months ago with his engineer partner, Brian Struebing. Red Beard is a custom fabricator of anything street-food related, and has already expanded into other areas, like repurposing shipping containers. “We’re trying to create a new industry. We’re not just here to push a taco; we’re here to do something.” The three businesses collectively employ 20 people, and they just expanded into a second larger building in Oak Park.
Established businesses add new ingredients
Red Beard has already had its first satisfied customer, Will Branch of Corridor Sausage, who, along with his partners Zack Klein and Gjon Camaj, just launched the Grindhouse food truck last month and is already booking all the major mobile vending events.
“The Grindhouse is something Zack and I talked about for awhile,” says Branch. After opening a production facility for Corridor in Eastern Market last year, and most recently receiving USDA approval to start wholesaling products to stores, it was time. The Grindhouse, a name that pays homage to Branch’s background in film studies, is an extension of the Corridor brand, utilizing Corridor’s products in an expanded menu that includes chorizo poutine, corn dogs, and Hungarian fried pizzas.
The Grindhouse is a way to get Klein into the business full-time and expand marketing reach. “I wouldn’t be shocked if in three months the Grindhouse has more followers than Corridor,” Branch says. “It’s an opportunity to co-promote each other.”
Branch knew Gearig from Eastern Market and had been discussing launching a truck. He and his partners bought an old newspaper truck for $13,000 and had Gearig customize it, which included adding the kitchen. The Grindhouse shares El Guapo’s commissary kitchen in Madison Heights.
Though he declines to give a total cost for the start-up, he warns that the barrier to entry isn’t quite as low in Detroit as it is in some other cities, giving a blanket estimate of $30-50,000 for a new food truck to launch. Gearig says a vendor can go the DIY route and get into the business for as little as $20,000, or have “a really bitchin’ rig” for $100-130,000. For a practical benchmark, he says, “I think $65,000 will get you a solid foundation to really make some money.”
Another established business, Green Dot Stables in Corktown, is following their lead. While it’s had a commercial truck for a while – fans of the gourmet burger joint and beer bar have probably seen it parked in the lot – it wasn’t equipped to prepare or serve food. Now with Gearig’s help, the green machine will soon hit the streets and allow them to expand their catering operations and service in their restaurant during special events. Owner Jacques Driscoll says it should be ready by the end of the summer.
Jumping the corporate ship
Detroit BBQ Company had the same idea. Brothers Zac and Tim Idzikowski have been private caterers and had a presence at farmers markets and annual events like Pig & Whiskey for the last two years, but they have more opportunity to grow. They currently have two rotisseries and a smoker, with a second on the way, and they’re still maxed out. Next year they’re buying a 30-foot-long trailer with a 500-pound commercial smoker, a flat-top grill, and a cooler for a fully-mobile BBQ restaurant. “It’s a next step to grow our business,” says Zac Idzikowski. “We need to cook large volumes sometimes but it’s also important for us to be more mobile and split apart.”
In two years they have grown from doing one farmers market and the occasional party to not even being able to do the markets anymore because they’re too busy. “We didn’t know it was going to grow this fast. Had we known we could have got the trailer this year.” Their goal is to make this their full-time jobs and ultimately open their own restaurant, doing it all their way.
Gearig is excited for them. “I love the excitement and anxiety in people’s voices when they talk about jumping the corporate ship!”
No one knows more about jumping the corporate ship than Scott Moloney, owner of Treat Dreams. He left a career in banking to open an ice cream shop. At the time, he didn’t even know how to make ice cream. Now his business gets profiled in national media outlets like Time and CNN Money.
Earlier this year Moloney was able to expand his brick and mortar location in Ferndale into a second storefront, significantly increasing his kitchen, storage, and dining room space. He started operating a push cart in 2011, which he bought used for $1,200, for off-site events, then added the Dream Machine refrigerated van in 2012, which cost $10,000.
The mobile units have made Treat Dreams’ participation at food truck rallies and special events much easier, and Moloney is at all of them. During the summer, Moloney spends all of his time outside of the store at events. “I look at it all as marketing,” he says. “They’ve been very beneficial from a marketing standpoint, but we do make money at these rallies too. We can do as much in sales in a three-hour window as we can in a whole day in the store, and that’s with just one employee.”
Mobile events and outside catering account for about 25% of his business. “If we hadn’t had the cash flow from these events to invest back into the business … we would not have had the need to expand the store, and we also wouldn’t have had the money.”
Next up: brick and mortar businesses
When we first got mobile food on the brain there were certain points of focus in every discussion about food trucks: first was their comparatively lower startup costs for aspiring entrepreneurs. Second was their ability to vet business concepts for sustainability as a brick and mortar restaurant.
“This is all leading up to a brick and mortar business,” Gearig says. “We will definitely continue to do food trucks, but this is going to fund us getting to the next level.” In fact, they’re already looking at locations. “Mobile businesses eventually all want their own brick and mortar spot, and this is a stepping stone to that.” Mobile vendors are constantly at the mercy of strict operating regulations, bad weather, flat tires, limited menus, no seating, no bathrooms, no booze. For any brick and mortar business claiming food trucks have an unfair advantage, Gearig invites them to ride with him for a day to see what it’s really like.
For Branch, the Grindhouse is an incubator model to see what’s feasible and what the response is like. “This gives us a chance to see what might a brick and mortar location look like.” He adds, “It gives us a little room to sort of play with our food.” Zing!
In Ann Arbor, Mark’s Carts has inadvertently acted as a food business incubator. After their first season in 2011, Eat Catering and Chef Services moved on to a storefront of their own. Now the Lunch Room, a vegetarian and vegan concept that was at Mark’s Carts from 2011-12, is getting ready to open its own café in Kerrytown in July.
Owners Phillis Engelbert and Joel Panozzo used to talk about their dream community café and doing something with their lives rather than just working for a paycheck. They didn’t have the startup money or the expertise, so the Lunch Room got its start with small dinner parties for friends and pop-up events. When Mark’s Carts announced it was opening and put out a call to vendors, they applied and were accepted. They ran a Kickstarter campaign to fund their cart, and in two years made enough money operating the cart to get a business loan for their café.
While the cart enabled them to build a loyal following and see whether a café would actually be sustainable, Engelbert is relieved to not be at the mercy of weather that is too hot, too cold, too rainy, too windy, or otherwise just not right. The café will also allow them to significantly increase their number of offerings and do large-scale catering. She says, “If people think a food cart is a good way to make a quick buck, it’s not. You still have expenses – commissary rent, insurance, marketing, equipment. All the line items are almost the same.”
While food trucks are still establishing themselves in the marketplace and discovering their own potential for growth and sustainability, the market is a long way off from being saturated and the business model is still less than ideal. Still, as Gearig says, “We keep on truckin’.”