When Danial Marizd launched his modern food truck La Famiglia in October 2014 in the Klang Valley, there were only two other food trucks like it around. Fast forward to today, and there are an estimated 70 modern food trucks in the Klang Valley alone!
At the recent 1st Asean Young Food Entrepreneurs Conference in Kuala Lumpur, organised by food portal and TV channel FriedChillies and initiated by the Finance Ministry, food trucks were all any of the 650 registered participants could talk about. Many of them had cherished dreams of owning and operating their own food trucks.
“I think it’s cheaper, more convenient and easier for people to reach. And it’s something I’m absolutely passionate about,” said Rozana Ramli, a 25-year-old who is determined to open a Malindo-inspired food truck sometime this year.
FriedChillies CEO Adly Rizal came up with the idea of devoting the conference solely to food trucks, because he believes that they are here for the long haul. According to him, an average of five food trucks open every month in the Klang Valley.
“We believe that food trucks, while a trend now, are actually a solution to a problem. As KL develops, this is an alternative to street hawkers,” he said.
Even DBKL (City Hall) has latched on to the food truck phenomenon, organising the bimonthly weekend-only KL Food Truck Feast (KLFTF), which is expected to continue until December 2016. The event has 49 registered food trucks and an average participation of 26 trucks a week.
According to KLFTF project manager Isham Ishak, since the event launch in September 2015, it has seen 99,000 visitors and an average increase of 10% in week-to-week sales.
The numbers tell a growing story: food trucks are on the up and up and an increasing number of young food entrepreneurs are heading down the food truck route. But just why is this the case?
The growth of modern food trucks
For one, modern food trucks are cool. They can be pimped up with custom-made fabrications to enhance the wow factor. The trucks are also mobile and have strong branding, catering to an ever-growing demographic, and attracting new followers through free social media marketing tools like Instagram. La Famiglia’s Instagram page has over 20,000 followers and the brand is so popular that Danial recently even launched a La Famiglia app!
The food truck’s branding can often be a great marketing tool in itself. Having a killer concept and a unique and memorable brand identity can turbocharge a food truck like La Famiglia, which references The Godfather and even plays Italian songs.
For most young food entrepreneurs with little spare cash to throw around, the cheaper cost of setting up a food truck is the real appeal. While brick-and-mortar restaurants cost upwards of RM200,000 to set up, starting a food truck is between RM100,000 and RM150,000.
Najee Ramli, who runs Mexican-inspired food truck Thyme Out, is all for the easier-on-the-wallet option.
“It’s harder running a restaurant – the finances are crazy, the overheads are crazy, so that’s why we prefer a food truck. It’s easier to run, more manageable and I can run it whenever I want. I don’t have to open it at a standard time,” he said.
For consumers, food trucks offer something different from stationary restaurants and hawker stalls. The trucks are clean and the food is quick offerings like burgers, wraps, and pastas, sold at lower prices than eateries. Adel Ishak’s popular Little Fat Duck truck sells spaghetti bolognaise at a mere RM5!
The communal atmosphere around a food truck is also a big draw. You’ll often find food truckers chatting up customers as they serve them, attempting to develop a relationship of sorts. This is in stark difference to the old-fashioned hawkers who are sometimes nice, but equally often mute or grumpy and dishevelled.
Obstacles and challenges
Despite its burgeoning popularity, there are a lot of headaches that food truck operators face. The biggest and most formidable one is the lack of a licensing framework governing food trucks. This means that while food truck operators have a commercial vehicle licence and all the necessary certification to run a food outlet, they do not have licences to park their vehicles in public spaces.
It sounds odd that there isn’t a licence for food trucks and yet so many are rushing to set up shop. Why would they take such risks?
“It is a risk, but if you want to wait for a licence, you’ll get nowhere. It’s only a matter of time before the licensing is sorted out – we’ve worked with the authorities and educated them about the modern food trucks,” said Ku Azharul Nizar, who runs American-barbecue food truck Cowboys Food Truck.
Danial also said that he knew it was illegal but wasn’t too bothered and went ahead with it anyway.
What’s even odder is that even though DBKL is actively supporting the food truck scene through KLFTF, it has not yet established a way of licensing food trucks.
Ahmad Tarmizi Baharom, the senior assistant director, Licensing & Small Traders Management Department of DBKL, confirms that food trucks are considered to be operating illegally. This means food truckers are always at risk of having their vehicles towed away by the local authorities.
Adel has had his truck towed a total of two months out of the year, causing massive losses as he literally couldn’t operate. Other food truck operators all echo his sentiments – each one having a story to tell about doing business under a cloud of doom.
“Everybody is selling in fear. Because every time they’re cooking, they’re looking out the window to see if the tow truck is coming. It’s not a fun feeling,” said Najee.
Recently however, things have started looking up on the licensing front. After petitioning their local council for nearly a year, Danial, Ku Nizar and Adel bagged permits from MPSJ (the Subang Jaya Municipal Council) to operate in SS15’s Pasar Moden in Subang Jaya from 7pm to 1am every night. The permits are issued on a three-month basis and have to be renewed at a cost of RM150.
Although this is a step in the right direction, there is a downside: the permit does not apply outside the gazetted area, rendering the food truck virtually immobile, which is ironic.
But in this regard, it seems a food truck’s mobility is severely overrated. The reality is that most food truck operators actually have regular spots that they park at, so people know where to find them, because moving around too much actually doesn’t help their business at all.
According to Nizar, “Having a regular spot is important because in Malaysia, generally people won’t want to chase you to new places all the time. They want to know that on this particular day, you’ll be here so they can sort of plan their drive.”
There’s more good news on the horizon. Tarmizi says DBKL has been drawing up a “licensing framework for the purpose of licensing all the food truck operators only if they follow our guidelines”. While he didn’t indicate what those guidelines were, he said that the licensing will be finalised by the middle of 2016.
So on that front, change is afoot. The weather, on the other hand, can be a more unpredictable beast for most food truckers.
Rain, haze and extremely hot days can all affect business as most people would rather stay indoors or go to restaurants where shade and respite is guaranteed.
“My sales dropped by 50% last year when there was haze. Even during the rainy season, people are just malas (lazy) to come to food trucks, as they would rather go somewhere cosier,” said Adel.
Then there are maintenance costs to consider. Modern food trucks wear-and-tear at an accelerated pace, because they get used so often and so much. If there is a problem with the fabrication, it cannot be sent to any old workshop, as they won’t know what to do. Only the original fabricator can fix it and this can sometimes be a time-consuming, expensive process that means the trucks are out of commission and losses are expected. “It’s a learning process that will cost you money,” said Adel.
Keep on moving
So given all the issues the food truckers face, a larger question looms: is the industry a sustainable one?
The reality is rather harsh: it is very, very difficult to be self-sustaining on a single food truck. Because for all the hype surrounding food trucks, they don’t actually bring in much money.
Of the 70 food trucks that have opened in the past year, at least 10 are closing shop because they aren’t making enough money, according to Danial. That’s nearly 15% of the competition wiped out in a single year of business!
Let’s break it down to some facts and figures. Modern food trucks make between RM30,000 to RM35,000 a month, out of which, at least 30% to 40% goes towards food and the remainder towards utilities, staff wages, rental of a central kitchen (where most of the heavy-duty cooking takes place), maintenance of the truck and owners’ wages. Whatever is left is clean profit and that is rolled back into the business. After the calculations, some food trucks only have RM3,000 a month in profits.
Most food truck operators have to take on catering gigs on top of hanging around their regular spots, charging a minimum of RM1,000 to RM1,500 and raking in as much as RM8,000 in a single night for larger events. But most admit that larger catering gigs are rare and it is the smaller catering jobs that pay the bills and ultimately keep the business afloat.
Interestingly, it also seems to be the case that most food truck operators go into the business with an end goal in sight, and often, this doesn’t involve the food truck at all. It’s like they’re dipping their toes in the food truck scene but keeping their eyes peeled for other opportunities.
Najee’s goal is to get into the food import-export business. Danial wants to get his pasta sauce into supermarkets and Nizar is determined to open a restaurant. Adel meanwhile, has taken things even further. He’s opened Little Fat Duck stalls in malls. By this February, his brand will be a feature in five malls!
What have they all done to set their dreams in motion? Because their long-term goals cost too much money – they started out small, using a food truck as their base. In the process, they’ve very cleverly used the trucks to test the waters and market their products.
Nizar admits that he actually wanted to open a barbecue restaurant but the capital was too high so the truck has helped him gauge the market. Danial also says that getting his pasta sauce into supermarkets was his plan all along and the truck has been his main marketing tool.
So, the food truck ends up being a mobile advertisement for what the food truckers actually intend to do in the long run. But it’s also clearly the sideshow attraction, a warm-up to bigger, better things.
It goes to show that there has to be a larger dream than having a single food truck, because one food truck is just not enough, a fact which all the food truckers attest to without any hesitation.
Adel thinks young food entrepreneurs have to be very clear about the fact that running a food truck is hard work (most food truckers work 14-hour days) and has few financial rewards.
“They think it’s very easy and they can move around. They don’t factor in the three hours it takes to load and clean the truck, or even think about how the weather can affect business. If you want to open a truck, open it but you must have a bigger plan, otherwise it’s just cukup makan only,” he said.
Nizar echoes Adel’s thoughts: “It’s not as lucrative as many people think. A food truck is the in thing and it looks cool but you won’t get rich with a food truck. You have to think bigger than that,” he said with conviction.
As competition intensifies, and more and more food trucks flood the market, it will become increasingly harder for everyone to keep their heads above water. The slice of the market will become smaller, as more food truckers vie for catering gigs and food truck hot spots. In the end, only those with passion and determination who also have larger goals in sight will make it in this tough business.
“Only the strongest will survive. We have to keep upgrading our menus and thinking of different things to keep people interested. People think it’s easy but it’s really not,” said Danial.
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