Why Food Truck Growth and Restaurant Growth Go Hand in Hand
As our results illustrate, the critics’ theory that food trucks harm restaurants fails. Not only do food trucks not appear to harm restaurants, but they actually appear associated with more restaurants. After the Great Recession in 2008, both food trucks and restaurants increased substantially at the county level throughout our study period. And while food trucks experienced higher growth rates, restaurants cannot complain because a greater number of food trucks in a county does not mean fewer restaurants in that county in a given year. In fact, the opposite is true, with three more restaurants present for each additional food truck. This further undermines food truck opponents’ arguments, which they often make most forcefully during economic downturns when restaurants are hurting the most.
There are at least three possible reasons for our finding that food trucks do not harm the brick-and-mortar restaurant industry and may help it. First, food trucks are not direct competitors for all restaurants. Food trucks generally compete with fast food restaurants, not traditional, full-service restaurants. 1
According to one survey, lunch customers account for approximately two-thirds of food trucks’ customer base. About half of these customers would choose to buy their lunch at a fast food restaurant if they were not buying it from a food truck, 42% would eat at home or bring food from home, and only 11% would choose to eat at a full-service restaurant. 2
Second, food trucks provide brick-and-mortar restaurants with opportunities to test new markets and products. According to the National Restaurant Association, some restaurants see food trucks as opportunities to expand their presence beyond four walls as well as to attract different market segments. 3
In fact, restaurant-affiliated food trucks account for 30% to 40% of all food trucks in operation. 4
Food trucks have even helped many restaurants weather the COVID-19 pandemic: Unable to conduct business as usual due to deserted business districts and indoor dining restrictions, many restaurants have come to see the advantages of having a food truck and have added one or more to their repertoire. 5
Third, instead of taking customers away from restaurants and putting them out of business, food trucks can help restaurants flourish in a variety of ways. For starters, food trucks can increase foot traffic to an area, helping existing brick-and-mortar restaurants and other businesses and encouraging new entrants into the industry. For example, until the pandemic shut it down, 6
a weekly food truck gathering at ArtsPark in Hollywood, Florida, drew hundreds of people downtown on Monday nights, traditionally the slowest night of the week for brick-and-mortar businesses. 7
In another example, food trucks at a popular location in Washington, D.C.—Farragut Square—drew so much foot traffic that four new brick-and-mortar restaurants opened across the street. 8
And in Houston in 2012, many restaurants supported deregulating food trucks because they noticed trucks brought more foot traffic to their businesses. 9
Similarly, when Sarasota, Florida, considered legalizing food trucks early in 2021, the city’s planning director was in favor based on his professional experience in Atlanta and Madison, Wisconsin, where he said food trucks actually increased business at takeout restaurants. 10
It is easy to understand why this might be: People may go to an area for the food trucks, but they might choose to eat at a restaurant instead if the truck they planned to patronize is too busy or if they see a restaurant that appeals to them more. Or while buying lunch from a food truck one day, they might notice a restaurant they have not seen before and return to the area to try it on a subsequent occasion.
In addition to fueling innovation through competition, food trucks fuel innovation by incubating new brick-and-mortar restaurants.
Food trucks can also create new places for restaurants to be established. They can do this by helping to revitalize underutilized urban spaces. In setting up shop in areas that have few other draws, they can make those areas both more attractive and safer, 11
drawing foot traffic to those areas. This new customer base, in turn, may encourage other brick-and-mortar businesses, including new restaurants, to locate in those areas. For example, municipal leaders in Montgomery, Alabama, saw food trucks as an essential part of revitalizing the downtown area—so much so that the city created events for food trucks to be hosted there. 12
Similarly, food trucks appear to have served as a low-cost revitalization tool on underutilized lots in Austin, Texas. 13
Another way food trucks can help restaurants flourish is by stoking the fire of competition and innovation, contributing to the local culinary scene and even leading to the establishment of new, high-quality brick-and-mortar restaurants. For example, a survey of food truck owners in Vancouver, Washington, revealed that many believe the competition they provide is a healthy driver of restaurant innovation—that it forces restaurants out of complacency. As one survey respondent stated: “[T]he more food carts/trucks we have, the more vibrant our local culinary scene will become. This will, in time, lend itself to more high-quality brick and mortar restaurants and cafes.” 14
This food truck-induced culinary innovation makes intuitive sense, as restaurants must develop better and more unique menu items when food trucks are selling the same type of cuisine. 15
As Alan Hirsch, a restaurant owner in Baltimore, stated: “It’s the market at work. . . . I’m sure when Starbucks was rolling across the country, independent coffee shops were outraged. But there are still independent coffee shops. They had to figure out a way to compete. They started making better coffee.” 16
Others have noticed the culinary innovation food trucks have brought as well. One food producer even testified that the innovative nature of food trucks brought the entire industry back to concentrating on the customer: “Food trucks have helped provide the entire food industry with culinary focus at a time when many had lost sight of consumer needs and interests, taking what’s being learned on the road back into restaurants.” 17
In addition to fueling innovation through competition, food trucks fuel innovation by incubating new brick-and-mortar restaurants and other food establishments. While most food trucks may start off small, they can grow to a point in their popularity where it makes sense to open a brick-and-mortar location. For example, in 2007, Enzo Algarme started a food cart called Pupatella in Arlington, Virginia, serving simple yet delicious pizzas made using traditions from his hometown of Naples, Italy. 18
Because of its success, Pupatella morphed into a brick-and-mortar restaurant with five locations. 19
The small chain continues to differentiate itself from the competition through its menu, such as by partnering with another local restaurant—Texas Jack’s Barbecue—to create a brisket pizza. 20
In another example, this one from Chicago, in 2011, IJ client Laura Pekarik opened her food truck, Cupcakes for Courage, from which she donates 10% of sales to cancer charities. The previous year, she had quit her job to help care for her sister who had been diagnosed with cancer. Following her sister’s recovery, Laura decided to go into business for herself rather than return to her previous career. Despite the Windy City’s stringent food truck regulations, Cupcakes for Courage was such a success that in 2012 Laura opened a brick-and-mortar bakery and café. 21
Today, Courageous Bakery Cafe has two locations. 22
Yet another example of food trucks incubating new restaurants can be found in Louisville, Kentucky, with IJ client Troy King’s food truck, Pollo, which serves gourmet chicken dishes such as chicken and waffles. Troy bought his first food truck in 2014 and soon added a second truck as the business expanded. 23
Troy’s continued success allowed him to open two brick-and-mortar restaurants—Six Forks, which dishes up gourmet hamburgers and hot dogs, and Fry Daddy’s, which mainly serves fried foods. 24
Today, Troy’s food trucks and restaurants contribute to his community in myriad ways. Not only do they provide consumers with more dining options, but they generate tax revenue and create jobs in Louisville. And they might not exist at all if the city’s no-vending zones, discussed above, had been allowed to stand.
Other cities where restrictive food truck regulations persist are missing out on the benefits food trucks provide. To return to Benny Diaz’s story from our introduction, after he joined with IJ and other food truck owners to sue Fort Pierce, the court granted an injunction, stopping the city from enforcing the 500-foot ban while the case proceeded—a strong indication that the city was unlikely to prevail. 25
In response, the city repealed the ban. 26
But to ensure the city never revived the ban, Benny continued to press his case, 27
and the city admitted during discovery that it was unaware of any harms to “public safety or any other governmental interest” caused by either the injunction against the ban or the ban’s subsequent repeal. 28
In the end, the court entered a consent final judgment finding the ban unconstitutional—and ensuring Benny and other food truck owners never have to worry about Fort Pierce bringing it back. 29
Taco Trap is now freely rolling on the streets of Fort Pierce, serving up tasty tacos and a heaping helping of healthy competition that can only be a good thing for Fort Pierce consumers and restaurants.