Meatballerz food truck owner Cara DeLalla used to pay $40 for a case of plastic disposable gloves. Now she shells out $130. A pound of sausage that cost $2.50 two years ago is now $4.12. The starting hourly rate she pays her seven employees has gone from $10 to $14-16 with raises within the first three to six months. And when gas prices peaked in mid-June she was paying over $110 to fill up the 22-gallon tank of her food truck.
All of these sizeable cost increases have forced DeLalla, who also has a brick-and-mortar Meatballerz location that opened in January 2020, to rethink how she runs her 7-year-old mobile food business.
Credit: arvin.temkar@ajc.com
Credit: arvin.temkar@ajc.com
She has pinched pennies by purchasing off-brand packaging and cleaning supplies. She raised menu prices and booking fee minimums. And she’s investing much more in marketing in an attempt to attract would-be patrons in search of restaurant-quality dishes at a slightly lower price.
Still, DeLalla says it’s getting harder to make ends meet.
“The bottom line is we want to have a future, but if we keep progressing in the way that we are, we won’t,” she said.
Navigating a bumpy road
The entire food-service industry has been hit hard by soaring costs for labor and goods and supply chain disruptions caused by the pandemic, but food truck operations face unique challenges in the current economic climate. As mobile operations, they literally run on gas. And most patrons expect affordable fare.
Food truck owners have little control over the price of gas, which sold last week for an average of $4.23 a gallon in metro Atlanta, down 13 cents from the week earlier and 30 cents lower than it was a month ago. But, there are adjustments mobile operators can make — from where they travel to what they put on the menu and how much they charge for it — that affect the bottom line.
At the beginning of the pandemic, many food trucks lost a core clientele overnight: office workers. According to Doug Marranci, COO at kitchen concept PREP, trucks that shifted to selling at apartment complexes and hosting small private events performed “really well.” Of the 89 food trucks that lease commissary kitchen space at PREP, only three have gone out of business during the pandemic, Marranci said.
“Especially in the pandemic, people got used to convenience... They got used to having food trucks in their neighborhoods,” Marranci said. “The good thing about this year is that the demand for people who either want or think they want (to eat at) food trucks is exponential.”
Manny Perez, 29, said he would rather spend money on food trucks than large chains to support local businesses. The Chamblee resident has dined “very often” at food trucks during the pandemic. He would be willing to pay a few extra dollars at food trucks since “I understand their commute, their expenses.”
However, Perez expects to pay a few dollars less at a food truck compared to a restaurant. So does Payton Rutledge, 27, who likes to support local vendors and would pay an extra dollar or two on food trucks given inflation.
“I would expect to pay more at a restaurant just because you have to pay more staff, tipping waitresses, getting drinks,” she said.
Credit: arvin.temkar@ajc.com
Credit: arvin.temkar@ajc.com
Determining how much they can raise menu prices to offset food costs has been a balancing act for food truck operators.
Ashley Carlton, president of Not As Famous Cookie Company, Atlanta’s first gourmet cookie truck, said the “ridiculously high” cost of ingredients including flour, sugar and eggs forced him to raise prices twice in the last six months and potentially a third time soon. He said while some customers are willing to pay the 18% increase on prices, others have cut their spending on cookies.
“Those that know our product and have been experiencing it for some time are still willing to pay based on (the) increase,” Carlton said. “New customers might budge until they try them or overhear others speaking about how they love the cookies.”
Throughout the pandemic, Sandy Williams of Superior Vegan said she tried to keep prices low for comfort food dishes like vegan cheesesteaks. But with the cost of vegetables, grains and seasonings now double what they were pre-pandemic, she had little recourse but to raise prices a few months ago.
According to Tony Harrison, president of the Food Truck Association of Georgia (FTAG) and owner of Baltimore Crab Cake Company with a food truck in Atlanta, food trucks have navigated food cost increases between 30-100% without raising menu costs by that amount.
“If the price of wings is up 50%, you can’t raise your price 50% since people will stop coming,” Harrison said. “Our margins right now are eroding, and it does make it very difficult to do business.”
To navigate a fluctuating economy, Antoine Smith of food truck SGC Chicken & Seafood makes weekly adjustments to his Southern- and New Orleans-inspired menu. With propane prices up, he has added dishes like grilled shrimp and lamb chops to cut back on items that need a dip in the fryer. And he swapped expensive french fry toppings like lobster with chicken to keep the dish affordable and still make a profit.
Jace Whitsey, who runs Let’s Taco Bout It, has not raised prices or changed the menu much, even though a box of chicken breasts doubled from $60 to $121. Instead he added a revenue stream by selling homemade sauces to broader markets. Despite a lack of answers about how the economy will shape up, customers have made a noticeably larger effort to patronize the truck during this difficult period, Whitsey said.
“When people started understanding we’re not a Taco Bell or we’re not throwing things together but we actually put time and effort into each taco we make, people really seem to appreciate that a lot more now,” he said.
Hope for the future
One cost of doing business that has long cut into the bottom line for food trucks is permitting. Food trucks must get a mobile food service unit permit from the board of health in each county in which they operate. To get a permit, food trucks must pass a health inspection, costing thousands of dollars and hours of labor. Permit costs vary between $200-600, not including plan review fees, Harrison said.
In March, the Georgia legislature passed HB 1443, which would allow food trucks to sell food anywhere in the state with a single permit, and with quicker verification procedures for inspections. The bill, which Gov. Kemp signed in May, will go into effect on Jan. 1, 2023.
“A lot of (food trucks) are just a one-man, one-woman show. They don’t have accountants, they don’t have lawyers, they’re just trying to figure it all out on their own,” said Tony West, Deputy State Director for Americans for Prosperity Georgia, who worked with Harrison of the FTAG to lobby for passage of the bill. “To be able for them to get their annual permit one time to complete that process and have it honored everywhere else in the state is a really big deal.”
But with Jan. 1 some five months in the future and inflation still a daily reality, food truck owners are putting some plans on pause. Carlton plans to “wait around and see how everything plays out” before opening another Not As Famous Cookie Company brick-and-mortar location.
Whitsey said, “I had a plan with my accountant where we’re looking at it and by September if things are changing, then I’m going to have to change my prices... since there wouldn’t be enough money to keep everything running if I didn’t.”
For his part, Marranci is optimistic relief is near. Based on conversations with distributors, he anticipates if food trucks can hold on until September with slightly elevated prices, they will be fine.
“We’re painfully aware of what people have in the bank, but it’s not far around the corner that some of these prices will start coming back down,” Marranci said.
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