The food truck phenomenon has been rolling on for around five years; gradually gaining momentum, especially across the US and UK. From a very slow start, pioneered by corporates rather than individuals, the food truck market in the UAE is now taking shape. However, as Michael Gordon discovered, truckers here face a unique set of challenges
The UAE is a melting pot of global inspirations and ingenious ideas; from its creative borrowing of cultural and architectural influences, to its recreation of scenes as diverse as street food and dine in the dark. But recently the UAE has taken a concept of institutional status from the UK and US and rolled it into the local market.
Globally, food trucks, along with portable food kiosks and food carts, are on the front line of the street food industry, which serves an estimated 2.5 billion people every day.
These gourmet trucks’ menus run the gamut of ethnic and fusion cuisine. Food trucks are synonymous with offering limited but creative dishes at reasonable prices, and offering customers a chance to experience food they otherwise may not. Finding a niche seems to be a path to success for most trucks. While one truck may specialise in gourmet burgers, another may serve only seafood. In the UAE, the key market difference is one of ownership and operation.
Whereas in the US and UK, food trucks are often run with a small team, or even as a one-person operation, in the UAE they require a lot of personnel, both on and off the truck. The differences in legislation, make the sector prohibitive for owner-operators so most food trucks in the region are owned by large multi-truck companies, hotels, food chains or leased to individuals on a membership programme structure.
Food trucks are subject to the same range of concerns as other foodservice businesses. They generally require a fixed address to accept delivery of supplies, a commercial kitchen is needed for food prep, there are a variety of permits to obtain, and a health code to observe, as well as labour and fuel costs which form a significant part of the overhead.
Nevertheless, in the US the food truck market has grown 12.4% over the last five years, to a reported 4,130 trucks today, generating a $1.2 billion industry.
The outfitter
The food truck supplier/outfitter offers comprehensive start-up services that can include concept development, training, and business support, in addition to outfitted trucks. A pioneer in the UAE is the Food Truck Kings, led by Glen Kerfoot and his brother.
Glen says: “There has been such an interest in street food recently so the market in this region certainly looks promising – but it doesn’t happen overnight. We started getting requests for food trucks from the UAE about four years ago, but it takes the government time to draw regulations and health boards need to make decisions.
“On top of that, most of the people in government who make the regulations may have never heard of ‘Street Food’ until recently, if at all, so they have to become informed at first before they can make policy. I think it is important that government takes their time and makes all the proper policy for their region. The entire business will only survive if the proper infrastructure is put in place right from the start.”
He adds: “I think the barriers are knowledge, but it will come with time. The people requesting these food trucks have to have as much knowledge as possible. I receive requests for food trucks like the one in the movie ‘Chef’ and I cringe a little. Running a food truck is not like the movies. It is long hours, a large investment and some make good money and some do not. You need proper food and great staff, as it is a very social event to get street food from a food truck operator. It is the part of the business that makes it great and the social interaction is what many people look for.”
As a food truck consultant, Glenn is well placed to guide his customers through the legislation hurdles, as he explains: “For a sale to take place a large amount of planning has to be done first – both on the manufacturing end and on the customer end. They have to be aware of their health codes, import regulations, business set-up and countless other concerns right to where they are going to vend, how many staff and best cooking practices for the truck they choose. That is where I can help as a food truck consultant. Apart from building and planning the food trucks I have also been involved in the cooking end and had a small street food business as early as 1998, but perhaps I was a little too ahead of my time for that.”
According to Glenn, acquiring the registration and relevant permissions is basically the same anywhere in the world; you have to do your homework.
“It can be a long often frustrating process which people do not realise if they have never done anything like this before. We have helped shape policy in other parts of the world and have been the first to have carts allowed in many places. Recently we had the first food truck that was allowed to go to Unalaska Island, Alaska. We had to meet so many requirements but in the end we were able to do it. It is more perseverance and knowledge than anything, especially if you are shaping policy on something new.”
Glenn notes that the customers in the UAE who are interested in establishing a food truck business are very different to those in the US, UK or elsewhere.
He says: “In America it is more individual people requesting food trucks but there has also been a corporate swing lately with many food franchises requesting food trucks. In the UAE it started with more corporate requests., from restaurants, hotels, catering companies and many ‘consultants’ who were requesting for someone else.”
For its clients in the US, Europe, and now the UAE, Food Truck Kings completely builds the street food carts from the frame up. The Food trucks start with an empty, usually used, Grumman Step Van that is stripped from the inside and then built from bare walls with a complete installation of equipment and generators. It is a highly labour intensive process and each food truck can take three to four months to build.
Sometimes there are delays in having the equipment delivered and in some cases the equipment is very special and needs to first be made and then delivered.
Glenn elaborates: “One client wanted to make traditional Japanese Takoyaki (octopus balls) so we needed to have special griddles made and flown in from half way around the world. Those things take time. Even from that very first email from a customer request it can be a year or more before the person commits to a food truck. It is quite a lifestyle change for some people.”
At the time of interview, Glenn had one truck on order, arriving shortly, for a Mexican Restaurant in Abu Dhabi and another order was placed for a custom built food cart for indoor use, again in Abu Dhabi.
The broker
Another approach to food truck ownership is a membership programme, like the one pioneered by 54˚ East, with its Roundup concept. With this business model, Roundup handles everything from the truck ordering, equipment fit out, licensing, registration, delivery and even site allocations, for a monthly fee on top of the cost of the truck.
As general manager operations at 54˚ East Roundup Inderjeet Singh Bubber explains the concept: “As Roundup we are a one stop solution from support to building up the company, with trade licences, and the customisation of menus, government approvals and locations. And for this we charge a AED30,000 per quarter membership fee. We find members feel more protected under an umbrella organisation.”
With 15 trucks on the road today and a desire to reach 30 by the end of the year, Inderjeet adds: “The idea of Roundup was to give those interested in F&B, access to vehicles and access the areas they could not otherwise enter, like Dubai Media City.
“In the morning you can be in DIFC then Media City in the afternoon and Al Wasl Road in the evening. They will occupy fixed locations outside commercial properties, and they will not roam freely in case of accidents. We are also in talks to serve residential areas like Arabian Ranches, we are talking to Jumeirah Group for all their properties, and potentially, all 80 properties of Millennium and Copthorne Hotels will have food trucks, too. We are connected to the decision makers as Roundup, which gives our members the benefit.
“For the likes of Zabeel Park, Mushriff Park or Global Village – we negotiate with the government for access and give it out to our members free of cost. We have also signed up with event companies like Done and Flash. Usually as a vendor wanting a pop up kiosk or food truck they will charged you AED20,000 per day. But with a fleet of 15 trucks we can negotiate a one-stop solution and get huge discounts.
“We have a tie up with Sharjah government, which has several key locations and wants food trucks all along the corniche. They don’t want the headache of going to several different vendors and so requested from us five trucks for three months and the charge is only AED5,000 instead of AED20,000 per month.”
He adds: “We talk to Meraas for access to The Beach, and Emaar for the Boulevard, and even DIFC. If we can get an agreement with them then the government will not interfere.”
The road blocks
According to Inderjeet, mobile trucks have not been fully operational as yet, because of delays with the RTA in issuing new license plates. However, he suggests that permission has just been granted, which will no doubt lead to a surge in the number of trucks on the road.
Nevertheless, subscribers to his programme are already participating in several events like Dubai Festival Week and Modesh World, and from 23 November they have a permanent home at Zabeel and Creek Parks every weekend for food truck markets, which are expected to draw crowds of 30,000 people.
“We have negotiated a rate with Dubai Municipality to run markets every Friday and Saturday for six months until April. We are creating a food truck village with a minimum of six trucks on site and a further 20 F&B kiosks.”
For new customers the process is simple, you decide your budget, the option of a used or new truck, and then with Roundup you work together to create a menu, and Roundup provides the necessary central kitchen, with a 6,000 sq. ft. warehouse in Al Quoz and 20,000 sq. ft. central kitchen in Dubai Investment Park.
All trucks are fully customised and fitted by recognised fit out companies in the US, and everything is checked and tested before shipping the truck. Inderjeet adds: “Our government [in the UAE] has special requirements like the ampage of power outputs, chassis numbers, etc., which I had to negotiate personally in the US.
“We do everything from the Dubai Municipality, to Civil Defence to RTA, and we are the only company in the UAE given this approval. Turnover time for us is around 45-90 days to get an equipped running truck with all the government approvals.”
A fully equipped truck will cost $120,000 to $140,000 for used or $180,000 to $200,000 new. These are Fords, Freightliners, and Chevrolet –strong bodies which even after 500,000 miles require little maintenance. Compare this to AED700 per sq. ft. in rent for a retail unit of 2000 sq. ft. and the space would cost AED1.4m annually.
With members tied in for minimum of three years, Inderjeet currently has investors and enquiries from Qatar, Kuwait and Saudi Arabia, but will concentrate on Dubai first to ensure the operation runs smoothly. “We also don’t want to leave them when we get busy – we won’t take more members at the expense of existing ones,” he adds.
Inderjeet claims that so far there are no limits on the number of trucks that will be permitted in Dubai. In fact, he says: “At the moment the more than merrier – even 100 is not too many.”
The owner/operator
Another approach to Food Trucks is demonstrated by The Food Truck (TFT) company, which owns and operates four unique concepts in Dubai.
Maltese-born Chris Gauchie is general manager of TFT. He grew up next to a restaurant and developed a lifelong fascination with the wonders of food. He has had a varied career in the field so far and has worked for the last 22 years in 5-star hotels with brands such as Hilton, Intercontinental, Radisson Blu and the Ritz Carlton London, achieving the position of executive chef.
His portfolio includes experience in Michelin-star restaurants and training from celebrity chefs such as Raymond Blanc of La Manoir aux Quatre Saison in Oxford, UK, and Yves Mattaigne of The Sea Grill in Brussels.
As a start-up entrepreneurial business established by a small group of businessmen in Dubai, TFT specialises in giving consumers tastier and healthier products to enjoy at a variety of mobile food trucks.
Chris says: “It is our strategic plan to diversify in our product range and locations by expanding into a wider variety of cuisines providing opportunity for every eating occasion. Our collection of trucks will vary in cuisine ranging from Mexican, Italian, coffee and bagels to burgers, with more to come. The TFT principles of quality, innovation, consistency and efficiency are the foundation of our culture and our approach to business.
“The Food Truck will lead the way to the future of gastronomic mobility in Dubai and the UAE, enriching dining experiences with authentic food concepts. Furthermore, our mission is to develop and create a professional B2B network by offering and giving support to other F&B operations.”
TFT is currently running two proprietary food truck concepts, with plans to launch a further two concepts. In operation at the moment is Jake’s, which is a bagel, brioche and burger truck, and a Mexican truck called Medros.
A gelato truck called Hip Pop will be launched during the Emirates Rugby 7s event in the first week of December, offering 23 natural fruit flavours, made from fresh fruit not powder, and Callebaut Belgian Chocolate, made to authentic recipes.
This is a franchised concept, which has been proven very successful in its original US market. Following that, TFT will launch Cup a Joe late in December, another proprietary concept offering artisan pastries and coffee.
The trucks are custom designed by TFT and built in Miami, and they are shipped fitted with the kitchen and painted white with the livery painted locally in Dubai. Delivery time depends on the truck, but normally it takes three to four months, and a 26ft. truck costs from AED600,000 to AED1m.
TFT leases space on Kite Beach and Umm Suqeim Beach in Dubai, from where it sets up the Medros and Jake’s trucks, and further supports its business with corporate and private events.
“The key challenge facing food trucks is that they are not permitted to free roam, as they are in other countries. As it is a new concept it’s unclear just how food trucks are operating in Dubai with no legislation. So we are putting our heads together with other truckers to persuade the authorities. Food trucks is all about moving from A to B but until now it’s not permitted. We are trying to create a food truck platform to have a stronger word with authorities.”
Driving profit
Chris believes that there is a lot of misunderstanding about the level of investment and continuous costs of running a food truck, and so authorities are unaware of their need to generate steady income. He says: “We have a lot of investment and people wrongly think it’s cheap and easy to get a truck. In the US or UK it’s probably a one man team but here you need a whole team behind a single truck. Other challenges include the weather, which gives us a very short season – we maximise and extend the season with private parties and events, and we go to events like concerts, F1 and Rugby 7s.
“This is not just to make business sustainable but to enhance the social activities in Dubai. People socialise in malls, bars and restaurants, but seldom on the beach as we do in Europe or America. So we want to enhance, for instance, the park experience. Our trucks are fun – not just food.”
Chris would like to start a mobile food court where you can book an event with several varieties of food. “With more concepts I can cater to bigger events and I have more flexibility and company versatility. We are currently in the market testing phase with a couple of new concepts.
“We are not afraid of competition as we know we have to work together as food truck operators. We are currently talking with Roundup from 54˚ East, RIPE and several independent operators looking to set up a food truck business. We can only make this work if we work together.”
Chris believes that with a food truck market he will ultimately attract more customers by offering a wide variety of concepts, and so he is currently talking with Roundup about joining their food truck market.
However, he warns: “It’s unsustainable what some organisers are demanding. They expect us to pay license fees at an event and they charge crazy figures, if we go to an event we enhance the experience so it must also be sustainable for us. Not many realise the over heads and fixed costs of food trucks – fuel costs, food cost, beverage cost, RTA fees, and license fees – at the moment costs are getting top heavy.
“I won’t charge AED60 for a burger, just to maintain margins, I couldn’t justify that. For us it’s imperative to give value for money.”
“This is a long term commitment for us, return on investment is a minimum of two years,” he concludes.
It is clear that there is still a great deal of ground work that needs to be completed in the UAE, particularly in terms of legislation. We are unlikely to see a raft of food truck owner operators in the region soon, if at all, due in part to the rules and regulations but also the levels of investment involved and the length of return on investment. And although the rules in the Middle East are a stark contrast to those in the UK or US, they do offer a higher degree of food safety and security for the consumer, even if they are somewhat prohibitive for operators. Nevertheless, tremendous strides have been made and so food trucks are one trend unlikely to be driven off the road.
