Categories: BusinessNews

Fast-Growing Food Truck Industry Can Operate Amid COVID-19 Social Distancing Rules, No Indoor Seating Orders

Andrew W. Hait

When businesses were ordered closed and social distancing requirements went into effect amid the COVID-19 pandemic, restaurants were among the hardest hit.

But not all foodservice businesses were affected equally: “Food trucks” or Mobile Food Services by their very nature have more flexibility to continue to operate.

Food truck businesses have been on the rise in recent years. The number of food truck establishments in 2018 was 5,970, nearly double the 3,281 in 2013.

The number of food truck establishments in 2018 was 5,970, nearly double the 3,281 in 2013.
In 2018, these businesses employed 16,210 workers and reported annual payroll of $320.6 million.

Mobile Food Services (North American Industry Classification System or NAICS 72233) businesses exist in every state and the District of Columbia.

California, the nation’s most populous state, had the most (753) in 2018 and South Dakota the least (11).

The top 10 states (California, Texas, Florida, New York, Oregon, Washington, Pennsylvania, Ohio, Colorado and Virginia) accounted for 57% of the U.S. total.

Even the top 20 states accounted for just 77% of the total, making this a very geographically distributed industry.

These data are from the Census Bureau’s County Business Patterns (CBP) program, which provides data on the nation’s nearly 8 million employer businesses (businesses with one or more paid employees) in the United States, Puerto Rico, and the Island Areas.

How Do My State and County Compare?

Texas saw the nation’s largest increase (135%) in the number of food truck establishments between 2013 and 2018, up 315 to 549.

Employees of the 172 food trucks in Virginia, for example, saw one of the biggest increases in their average annual payroll: up $9,282 from $14,529 in 2013 to $23,811 in 2018.

Some people may think that food trucks are found mostly in warmer climates but that’s not quite true. Only five of the top 10 states with food trucks are in the South or Southwest. The rest are in the Northeast, Midwest, and Northwest.

Food trucks are widely dispersed throughout the country. Thirteen of the top 20 counties with food trucks are in southern states but these top 20 counties only account for 1,374 or 23% of all food trucks.

Even the share of food trucks in the top 50 counties is small: only 2,230, or 37%.

Data on food trucks was published in CBP for 461 counties that accounted for 5,104, or 86% of the total number of food trucks.

Counties where the data was not published accounted for 866 (or 14%) of all food trucks. It’s important to note that these data reflect the central location from which the caterer route is serviced and not where each food truck (or cart) owned by the business serves its customers.

This industry has gained a foothold in counties that never before had food trucks.

A Billion Dollar Business

Sales from food trucks increased 79% between 2012 and 2017, rising from $660.5 million to $1.2 billion.

Nationally, average sales per food truck establishment were $226,291 and average sales per food truck employee was $86,212 in 2017.

These data are from the 2017 Economic Census, which provides detailed information (including sales) for nearly every NAICS code at the national, state, metro, county, and place level. Geographic details vary by the NAICS sector.

California, Texas, and Florida were the top three in food truck sales in 2017: $276.1 million, $112.6 million, and $98.3 million, respectively.

These same three states also saw the largest increase in food truck sales, up $114.5 million, $82.5 million, and $57.8 million (respectively) between 2012 and 2017.

California led the nation in average sales ($392,136) per food truck establishment. However, Vermont reported the highest average sales ($157,400) per food truck employee.

Small Is Big in This Industry

Ninety percent of all food truck establishments were individual proprietorships, S-corporations or individual partnerships.

The 1,879 Mobile Food Services businesses legally organized as an S-corporation reported an average annual payroll of $20,872 per employee, compared to $19,777 for all legal forms of organization in 2018.

Of the 5,970 food truck establishments nationwide, 4,979 had fewer than five employees. These smallest businesses employed the most workers (5,187 of the 16,210 total) and paid the best, with an average annual payroll per employee of $25,712 in 2018.

Some Food Trucks Have Zero Employees

The number of employer food trucks have grown significantly in the last five years. But there are also food trucks that don’t employ anyone and have operators who report sales to the Internal Revenue Service on the form 1040 Schedule C or Schedule SE.

There were also 220,978 Special Food Services (NAICS 7223) businesses in the United States, which had $6 billion in sales in 2018, according to the Census Bureau’s Nonemployer Statistics.

This industry group includes Food Service Contractors, Caterers, and Mobile Food Services but there is no way to tease out what share food trucks make of this total.

Food trucks are not the “coffee wagons” that our parents and grandparents might have frequented at job site years ago. Many now provide gourmet meals that come right to our neighborhoods, allowing us to “dine out” even when indoor dining is restricted during the pandemic.

When we patronize them, we support businesses in our communities that bring truly local “flavor” not only to our larger metropolitan counties but to our smaller, more rural ones, which expands that “flavor” to a broader swath of America.

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