We do not yet know the full impact of COVID-19 and its associated policies will have on American businesses. At present, tech, home improvement, and logistics companies are creating record profits. On the other end of the spectrum, airlines, entertainment, and foodservice are struggling.
The long-term status of these industries aren’t quite as clear. No one knows how long COVID-influenced policy and public behavior will disrupt business. The combination of government stimulus, work from home, and consumer spending changes has caused the stock market to soar through much of the pandemic, while many businesses suffered and unemployment spiked.
Seven months into the pandemic, economists struggle to quantify even the current state of the economy. The Bureau of Labor Statistics reported an .4% inflation rate during the month of August; however the inflation rate, which is a proxy measurement for the increase of decrease of the purchasing power of currency, requires a predetermined bundle of items whose price is tracked each month. That bundle does not reflect the consumer spending habits of 2020, and the inflation rate that consumers experience is not .4%, but the true rate is unknown. Similarly, studies that measure average income have been less accurate than usual in 2020. Based on the 2020 Household Pulse Survey, 25% of Americans expect a loss of household income within the next four weeks; however, median weekly earnings increased in Q2 2020. Together, these factors make it difficult to evaluate the status of the economy.
Even with the uncertainty, it is clear that many restaurants and bars will close. Based on a March estimate, the New York Times estimated that over two-thirds of restaurants will fail during the Pandemic. The foodservice industry will struggle to return to full health, even when other sectors recover. The industry will need to adapt, not only to COVID, but to future disease outbreaks.
If given the opportunity to open any business now, I would open a crepe food truck. With the projections of restaurant failures and the decreased popularity of eating at a restaurant, food trucks will represent a better value proposition for entrepreneurs.
From a cost perspective, food trucks are possible to bootstrap. The start up costs of a food truck can be kept between 50 and 100 thousand dollars. For comparison a restaurant will cost, on average, $250,000. Crepe batter requires only three ingredients: Milk, eggs and flour. Fuel remains relatively cheap. The cost per serving will depend on the style of crepe and selected toppings.
From a revenue standpoint, the argument for food trucks is pretty strong right now. A number of cities have started to close streets to vehicles, to allow pedestrians more room for socially distanced dining. Food trucks are the perfect vehicle to capitalize on the closures in the short-term. Food trucks allow for socially distanced dining, delivery on app-based delivery services, and high throughput. These are key in a socially-distanced world.
Of course, the restaurant industry will come back eventually and people will be willing to eat inside. Will the food truck industry be in a stronger position in that time than it was prior to COVID?
Yes.
The industry has two primary drivers of potential growth accelerated by COVID. Food delivery is growing in the United States. COVID accelerated the growth, but the industry is here to stay. Food trucks can capitalize on this trend by moving to central locations of suburbs (which normally would not be popular) and sell both in-person and delivery orders. Food trucks will no longer be limited by population density of foot-traffic in the immediate vicinity. The other driver accelerated by COVID is the growth of civic outdoor space (hinted above). At least some of the streets converted into pedestrian walkways during COVID will remain that way. The increase in pedestrian areas will result in an increase in opportunity for the trucks.
Food trucks might be a good idea, but why crepes?
Crepes batter is easy to prepare. A crepe griddle is cheap compared to many cooking implements, training to make a crepe is incredibly easy, and crepes offer immense flexibility. If I were to make an October crepe menu, it might have the following items:
- Cinnamon and Pumpkin Spice (dessert)
- Apple Crisp Crepe (dessert)
- Coffee, Hot Chocolate, soda
- Sweet Potato and goat cheese
- Mushroom, garlic, arugula (Goat cheese optional) (vegan)
In the summer, my menu would play to the in-season fruit. For a morning event, the crepe truck would have all of the classic bagel options of a deli. For special events, a design your own option would be available. The crepe offers a more distinctive identity than a sandwich truck, but much more flexibility than an ethnicity- or ingredient- specific truck.
Polly Wanna Math 