08/01/2018 - 15:42

Food trucks drive opportunity

08/01/2018 - 15:42

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SPECIAL REPORT: With more than 500 food trucks in Perth, competition in the sector is heating up, despite a number of unique challenges and bureaucratic hurdles.

Food trucks drive opportunity
Stuart Fergusson (left) and Josh Catalano say The Fish Boss food truck has been the ideal stepping stone to open a fixed-site restaurant at Yagan Square. Photo: Attila Csaszar

SPECIAL REPORT: With more than 500 food trucks in Perth, competition in the sector is heating up, despite a number of unique challenges and bureaucratic hurdles.

Josh Catalano and Stuart Fergusson are preparing to take their food truck business to the next stage, having launched The Fish Boss in mid-2016.

Off the back of first-year revenue of $600,000, Messrs Catalano and Fergusson are on track to open their first fixed site in February this year at the Yagan Square retail precinct in the CBD.

A fixed location business was always the ultimate goal for Mr Catalano, a former MasterChef contestant and son of Catalano’s Seafood owner Nick Catalano, and Mr Fergusson, a chef for more than 25 years.

“The truth is we didn’t have any money and it (a food truck) was the best option we had,” Mr Fergusson told Business News.

“Over a brainstorming session in Northbridge eating Vietnamese, we wrote down the initial business plan on a tablecloth.

“Who are we going to get the money from? Where will we get sponsorship from and signage? What are we going to sell? How are we going to do it?

“Then we said, ‘yeah let’s buy it’, because we could see there was a niche there for us to take advantage of.”

Mr Fergusson said his hospitality experience, coupled with Mr Catalano’s business background, enabled them to develop the food truck project the way they wanted.

However, Mr Catalano said he didn’t expect the business to generate as much money as it did in the first 12 months.

“The first six months in that business we were scratching our heads as well; we launched in winter, sales weren’t there, Stu and I hadn’t drawn a dollar out of the business,” he said.

“I think Embargo Bar (at Elizabeth Quay) is where it started to change because we hit a different demographic.

“(Beforehand) we were sort of catering for low socio-economic areas and families and would still get good traction, but then (at Embargo) we were getting this younger crowd who were spending more money, coming back regularly and searching for us.”

Mr Catalano said the business would continue to target crowds in the CBD with the launch of The Fish Boss at Yagan Square.

Unlike most food trucks, he said, The Fish Boss offered about 20 restaurant-quality menu options, making it the perfect stepping stone for a fixed site.

“The big picture is to have four or five outlets, and the thing about the food truck is it has taught us the process,” Mr Catalano said.

“I think with the information behind the food truck and the agreed rent we have from the MRA and Yagan Square, I’d be very surprised if we’re not making profit in year one.”

(see a full PDF version of this special report)

Market challenges

Mr Catalano said the requirement to constantly move their ‘restaurant’ presented challenges for food truck operators.

“Because you have to move your restaurant and set up and have bump in times, everything moves; your gas bottle might not have enough pressure, your generator might be running a little bit slower … and the customer doesn’t understand any of that and they don’t care, and why should they,” he said.

“Sometimes you go to an event and they (event organisers) say there’ll be 500 people there, so we prepare for that and you get there and there are 2,500 people.”

Mr Fergusson said limited street trading was another major challenge.

“Councils are more inclined to give the management of their locations that they’ve activated to certain groups who have more trucks and want to manage trucks,” he said.

“To be part of that group you have to be a part of an association, and then you have to apply to be on their roster with the emerging market food trucks.”

Mr Catalano said he expected the food truck market to get tougher if current conditions persisted.

“People think if you buy a food truck you trade where you want, do what you want and pay no rent, but everywhere you trade someone takes money from you,” he said.

“Our view is that if it’s going to cost us any more than 10 per cent of our turnover we don’t do the event, because our margins are low and we need to make money just like any business.”

“To get a food truck now and get amongst these other organisations that are grabbing that work (would be tough); but let’s say the laws change and councils gave you street trading where you can pull up in a car park on the side of the road and trade, then the whole thing (market) would emerge again,” he said.

The association

Sean Bryce founded the WA Mobile Food Vendors Association in February 2016 to create a unified industry voice and reduce challenges.

“We wanted to be able to liaise with government over inconsistent fees and charges, and also we wanted to make sure vendors were basically given a fair go with regards to events,” Mr Bryce told Business News.

From just 25 food vendors at its launch, the association has grown to represent 268, with about 20 new vendors joining each month.

Mr Bryce said the association provided a support network for truck owners while attracting councils and event organisers to seek work from the group.

Events company Community First Events, founded by Peter Jenkins, is one of a number of organisers that act as a middleman between local councils and vendors.

Mr Jenkins told Business News he preferred to work with the association as it offered a level of credibility and convenience. However, he also occasionally worked with independent operators.

Mr Bryce said it wasn’t always easy dealing with councils, and while some were more agreeable than others, some of the greatest challenges to the sector were inconsistent rules and regulations, and barriers to street trading.

“We believe it’s a bit of a process to try and educate councils; by bringing food trucks into areas we can actually bring people into areas, which can help their businesses,” he said.

An increase in fees by event organisers was another challenge, Mr Bryce said.

“Sadly, if you’re a vendor and say your fees are too high, they’ll just say, ‘fine, we’ll find someone else,’ because I’d say at the moment we’re oversupplied with food trucks,” he said.

The Health Department of WA reported 529 mobile food businesses were registered within the Perth metropolitan region for the 2016-17 financial year.

Industry growth

Mr Jenkins told Business News the current food truck movement started in Perth about four years ago, having taken off in the US in 2007.

“The quality and design of the food trucks have gone through the roof in the last few years; it’s actually a really exciting time because the industry is booming,” Mr Jenkins said.

“It’s almost as if there are too many food trucks jumping on the bandwagon, but for me as an organiser it’s great, because it means I get to pick and choose the better ones. But I also appreciate some are really struggling.”

He said the City of Wanneroo and the City of Gosnells were particularly progressive regarding food truck activations.

The City of Wanneroo has recently extended a food truck trial, organised by Community First Events, involving 46 food trucks rotating across locations in the area in lots of eight.

The City of Wanneroo found that 98.5 per cent of residents surveyed supported food truck trading within the city, nearly 80 per cent wanted to see food trucks trading year round, and 70 per cent wouldn’t have travelled to a specific location if the food trucks had not been there.

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