Pop-ups threaten food trucks
I have long believed in the food truck business as an incubator for new restaurant menus and innovative restaurant concepts. They also provide a lower cost venue for getting into the foodservice business to test your concept viability, or provide another revenue stream for your family. Testing the menu reception at various locations is as simple as driving to an alternative location. Once you find the right location and best menu reception, you can consider a brick and mortar store.
But restaurant "Pop-Ups" fill the space between a full service brick and mortar restaurant and food trucks. According to an article written by Katy McLaughlin in the March 23, 2012, Wall Street Journal, pop-up restaurants are temporary eateries that set up shop for a few days, weeks, or months in spaces such as hotel lobbies or other restaurants that close for the night.
She states that these pop-ups are morphing into a multipurpose tool, used by a different strata of the restaurant industry to test concepts, market new brands, engage with a younger audience, or prove to landlords, lenders and investors that they are worth the risk. The initial costs may range from $50,000 to $500,000, depending on the city, location, concept. A food truck start-up costs could range from $50,000 to $200,000.
Katy reports that pop-ups first began appearing in London in the mid-2000s, when a hand full of restauranteurs began staging culinary "happenings." They have now become integral to the high-end restaurant scene, and led to the emergence of pop-up production companies that help chefs and companies stage events.
A pop-up example in the United States is Wise Sons (www.wisesonsdeli.com) in San Francisco. Leo Beckerman and Evan Bloom believed they have filled a niche for classic Jewish deli food as reported by Katy McLaughlin. Beckerman stated that the Bay Area has tons of great food, but there was nowhere to get a great pastrami sandwich. They started their business in January 2011 on Saturday mornings in a café that was used by a food truck business only for its bathrooms. Now one year later they started a fixed brick and mortar location. Katy reports that their start-up costs ranged from $2,000 to $2,500 a week, which covers rental space in a commissary kitchen, ingredients, and liability insurance.
Sprout LA managing partner Bill Chait is another supporter of the pop-up concept, and originator of "The Test Kitchen" concept that will reopen this fall. Chait has continued to stage 'mini Test Kitchen events" during the relaunch. He has reported a 20 percent margin on each of his advents, and generated an email list of 4,000 customers.
Another pop-up concept is Guerrilla Culinary Group in New York (www.guerrillaculinary.com or www.thepopuprestaurant.com). Alan Philips, company principle, states that a three-to-four night pop-up costs $30,000 to $50,000 upfront – and he even ties in to New York's Le Cirque. To learn more about pop-up and food truck restaurant concepts, plan to attend our July 9-11 industry workshop event on how to start a food truck and pop-up business.
Please contact me at email@example.com or follow the Food Innovation Institute website (www.foodbevbiz.com) for information on two three Food Innovation 3-day workshops in Denver:
April 30 – May 2, 2012: Food Innovation Business Principles & Processes
May 14 – 16, 2012: How to Commercialize Your New Product Ideas.
July 9 – 11, 2012: How to Start Pop-Up Restaurant and Food Truck Business
Darrel Suderman / Darrel Suderman, Ph.D., is president of Food Technical Consulting and founder of Food Innovation Institute. He has held senior R&D/QA leadership positions at KFC, Boston Market, Church's Chicken and Quiznos and led KFCs development team of Popcorn Chicken, now a $1B international product invented by Gene Gagliardi.