Today’s food trucks: not your father’s hot dog stand

Published on Tue, 04/08/2014 - 18:09

Whether it’s children playing in the neighborhood, a family outing at the beach, or lunch with coworkers away from the office, we love our fast, easy food. Most of us can remember hot dog vendors in the park or at the beach, and almost every neighborhood in America had an ice cream truck.

But who would have predicted an $800 million industry with 12 percent annual growth would come out of such humble beginnings?

The Food Truck industry is one of the hottest segments in the entire food-services sector. According to IBISWorld, revenue has increased 12.4 percent annually since 2008. Although saturation has slowed that growth recently, sales are still expected to grow 4.4 percent to $803.8 million this year.

This is not your father’s hot dog stand

Sure, there are still ice cream trucks and small food stands in many neighborhoods. But their more sophisticated cousins have moved downtown and into urban areas. And make no mistake – today’s gourmet food trucks are a far cry from the simple food stands of yesteryear.

What’s on the menu? Just about anything you want! Regardless of your tastes, you can probably find a mobile food vendor to satisfy it – from more traditional fare like pizza to top-line culinary delights such as Korean bratwurst, lobster corndogs and crème brûlée.

What’s been driving the food truck craze?

Two things – the Great Recession of 2008 and consumer preferences. The recession hit the restaurant industry hard, making it increasingly difficult to start and operate a conventional restaurant. Financing was hard to get, industry growth was slow, and competition was fierce. That drove thousands of restaurateurs into the food truck business.

About the same time, consumers began demanding more quality, value, and speed, the top three things consumers look for in quick-serve restaurants according to the National Restaurant Association. Food trucks often outpace traditional quick-serve and fast-food restaurants in all three. Today’s gourmet food trucks use fresh, local food to differentiate themselves from traditional quick-serve and fast food joints.


The Food Truck industry still faces evolving parking laws and other city ordinances, along with fierce lobbying against vendors from many brick-and-mortar establishments that pay taxes. But growing household incomes and consumers’ evolving preferences continue to drive growth in the industry.

Good news in food industry insurance.

One of the biggest challenges for food truck vendors in the past has been insuring their operations. With the explosive growth in the industry, ongoing regulatory hurdles, and exclusions in typical commercial property and business income policies, it’s been hard for many to find coverage. Many owners and operators have looked to niche insurance markets, while many more have simply gone without coverage.

Now there’s a better choice. A new ISO form – CA 99 05 02 14, Business Interruption Coverage – is an endorsement that can be attached to business auto, auto dealers, or motor carrier coverage forms. Similar to the CP 00 30, Business Income (And Extra Expense), the CA 99 05 offers both coverages in a single form. This new form finally breaks down the barriers to fully insuring food truck operations, offering much greater protection.

For more information about the new form and your expanded insurance options, contact Heffernan Insurance. With extensive experience in the food industry, we understand your unique challenges, and we can make sure you keep the grills hot and your customers satisfied.