16 July 12, 2021 • CRAIN’S CHICAGO BUSINESS
Food trucks were hit hard—and the survivors are still waiting for a rebound
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The pandemic hit food trucks harder than any other restaurant segment, says Mark Brandau, an analyst at Datassential, a food industry consultancy based in Chicago. Spending in the U.S. food truck market was 41 percent lower in 2020 than was initially forecast, Datassential reckons. Food trucks that were once dependent on bustling Loop lunch crowds and catering events sat mostly stationary. There were some bright spots, like events for front-line workers and stops in suburban neighborhoods. But for many, it was not enough to recuperate their losses. Pre-pandemic, there were 80 to 100 modern food trucks operating in Chicago, says Gabriel Wiesen, owner of Beavers Coffee + Donuts food truck and head of the Illinois Food Truck Association, which has been mostly dormant since the pandemic struck. He estimates about half of that fleet did not survive. “Food trucks, in particular, are vulnerable because they’re such a bootstrapped business. Oftentimes it’s someone’s life savings” tied up in the enterprise, he says. “There are no nest eggs or ability to deal with a week’s loss in revenue, let alone a year.” For those that survived the months of COVID restrictions, recovery is expected to take 18 to 24 months, as food truck operators wait for downtown foot traffic and large-scale, in-person events to return. That’s assuming, of course, that the scene isn’t forever altered by the pandemic. Food trucks, so dependent on downtown office denizens for survival, may be out of luck if the COVID-era work-from-home revolution permanently upends 9-to-5 office life as so many observers predict. Worker occupancy in downtown offices was at about 30 percent of pre-pandemic levels
JOHN R. BOEHM
FOOD TRUCKS from Page 1
Brothers Alexis Vejar, left, and Teddy Vejar own Jarabe Mexican Street Food. “The Loop was a ghost town” during the worst of the COVID outbreak, “and it’s still relatively empty,” says Alexis Vejar. a ghost town” during the worst of the COVID outbreak, “and it’s still relatively empty.”
SHIFT IN FOCUS
Jarabe was one of the first food trucks in Chicago more than a decade ago, says Vejar, who owns the business with his brother. They have since shifted their focus, opening a brickand-mortar location and delving into catering. Now the food truck is mostly seasonal, bringing in about 25 percent “OF COURSE, DOWNTOWN GOT ELIMINATED. of the business’ reveI WAS LIKE, ‘OK, WHERE WILL EVERYBODY nue in the BE?’ SO I PARKED IN FRONT OF A JEWEL” AT summer and even less 75TH STREET AND STONY ISLAND AVENUE. other times. Roughly 70 Thomas Brewer, owner, Whadda Jerk Food Truck percent of Jarabe’s revlate last month, according to enue came from catering, which the Chicago Loop Alliance. The intensified the pandemic’s sting advocacy group for downtown but might set the business up businesses, civic and cultural for a faster recovery. institutions expects occupanThere are almost 11,000 food cy to increase to 50 percent by trucks operating in the U.S., acthe end of July and grow from cording to Datassential, and conthere, but many experts say sumers spend about $1.5 billion most workplaces will maintain a year on them. In Chicago, there some work-from-home flexibil- are 200 licensed food trucks, inity even after Labor Day. cluding those that prepare food “That was the only part of Chi- on the truck and those that precago where there was enough pare it in a kitchen and sell from foot traffic to generate the sales the truck, says Isaac Reichman, somebody would need to make a city spokesman. That number a profit each day,” says Alexis could also include some that are Vejar, co-owner of Jarabe Mexi- not currently operating, since can Street Food. “The Loop was their licenses were automatically
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extended during the pandemic. In 2019, there were 233 licensed food trucks. The city plans to bring the Chicago Food Truck Festival back to Daley Plaza later this month after a pandemic hiatus. Thomas Brewer, owner of Whadda Jerk Food Truck, says he plans to attend. But for the most part, he has stayed out of downtown during the pandemic. Whadda Jerk used to frequent stops such as Monroe and Clark streets and the Aon Center. “Of course, downtown got eliminated,” Brewer says. “I was like, ‘OK, where will everybody be?’ So I parked in front of a Jewel” at 75th Street and Stony Island Avenue to capture lost business. That tactic worked well for Brewer for a few months, when grocery stores were one of the few businesses open. But it wasn’t sustainable. His revenue took a 70 percent hit last year. Whadda Jerk Food Truck is now focusing mainly on private events, where it is guaranteed to make money. Brewer says he doesn’t have the staff to do more. Indeed, Chicago food trucks are finding success catering events—as they slowly return— and eagerly awaiting high-dollar corporate gigs. Though event attendance remains lower than pre-pandemic, food truck operators are learning their sweet spot. They must be choosy about where they go, to ensure
an event or location is financially viable. Evanston catering company Soul & Smoke won’t dispatch its food truck to an event unless it can make $3,500 on the weekends, says owner Healther Bublick. That equates to about 250 barbecue brisket sandwiches. There’s a $2,500 minimum on weekdays, too. The food truck frequents Sketchbook Brewing, hits up farmers markets and set up at a firework show in Wilmette. Soul & Smoke bought the food truck last summer to reach more customers, and it’s working. “I very much treat it now like it’s one of our main locations,” Bublick says. “There’s Evanston, there’s Time Out (Chicago) and the truck. Those are our three big producers.”
COMPETITION
That approach highlights another part of the food truck industry’s pandemic saga: new competition. Some restaurants launched food trucks over the past 15 months as additional revenue streams. Rainbow Cone is among those ranks. The 95-year-old brand launched its first food truck last year “to get Rainbow Cone out to the people that we were missing,” says marketing director John Buonavolanto. Now, Rainbow Cone has five food trucks— one named for each flavor in its famous multicolored ice cream cone—and their popularity
is helping drive decisions on where to open new brick-andmortar locations. Similarly, Stan’s Donuts plans to debut a second food truck in August, says vice president of operations John Gurgone. The company has had its “Stan Van” for about four years, but it served mainly as a marketing tool up until the pandemic. Five of Stan’s stores were closed for two months, and its downtown locations suffered for much longer. For a while last year, the food truck was Stan’s No. 1 sales generator. Wiesen from Beaver’s Donuts also owns a manufacturing company that builds food trucks for companies across the country. Midwest Food Trucks got an influx of interest from restaurants wanting to buy or lease the vehicles. Established restaurants can often buy a food truck for less than $50,000 and write off the expense, Wiesen says. It was a good way for restaurants that were watching their indoor dining revenues languish to get out into different areas and meet consumers near their homes, for example. But in Chicago, at least, the new food trucks hitting the streets weren’t enough to offset the industry’s losses. “The people that were inquiring were those that already had restaurants, that had revenue,” he says. “It wasn’t a mom-andpop food truck owner.”
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