2023-11-11 05:00:00
Last year, a third of Donatello’s turnover had to be spent on location rental. According to him, the profitability of the events he registers for is therefore “very variable” and… less and less good.
Donatello, owner of a food truck, says he is “outraged” by the prices charged by the organizers of an event in Belgium. “1,000 euros for 4 hours of service, that goes too far”, he believes.
For three years, he has been selling his Italian specialties in numerous public and private events throughout Belgium. And in recent months, the retailer has denounced the increase in prices for locations in public events. According to him, some organizers charge unrealistic prices.
“In 3 years, things have evolved strangely in the events industry. At the beginning, we went to several types of events. But over time, we learned that some organizers exaggerate the predictions of their events. We learned to sort over the years, to work with the most reasonable ones. We don’t do very big festivals, because giving so much money… at the end of the festival, we worked a lot, we hired staff and often we don’t get a very big profit from it”he says.
Recently, the request from organizers to rent a location “shocked” Donatello.
“1000 euros for 4 hours… From year to year, we are told that costs are increasing. I also put myself in the shoes of the organizers. I know that everything has increased (price of electricity, salary increases, etc.) and all this must have repercussions somewhere. The organizers, who have a lot more costs than before, are trying to reduce the costs by increasing the costs of the food trucks. I have never paid 1000 euros for 4 hours… C “There is a tendency among the majority of organizers to increase prices from year to year. There is no legal framework for food trucks.”
To ensure the profitability of his activity, the trader says he relies on “trusted people”.
“It’s my only activity. In three years, I have found people I trust. We can sit down at the table and discuss real prices. What often happens is that the prices come out of a hat magician. We are asked for that much because they think they have to earn that much. We are sometimes made to pay 500 euros for electricity, when we consume perhaps a hundred. It’s a world where we don’t pay much attention to this which is fair. Whoever it works for, it works, otherwise, we’ll find another food trucker. Even a new kid might try the adventure with what euros they have left, and they’ll pick up a bowl.”
Last year, a third of Donatello’s turnover had to be spent on location rental. He also explains that lately, profitability has been “very variable.”
“The year following covid, I had a good turnover because we might see that people wanted to go out. There was enthusiasm for a good year. But people were then calmed down by all the increases (gas, fuel oil, etc.). We had a bad winter last winter. We have the impression that when people go to a public event, they think twice before reaching for a ticket in their wallet. Life is complicated for our customers. I wonder if we can’t define a framework where everyone can get along, where we would ask to pay for the actual consumption of each speaker and each participant. Some people don’t consume any electricity. I would like to pay for what I consume.”
The have prices of places at public events increased?
We contacted Stijn Snaet, spokesperson for Event Confederation (a federation of several event organizers), who believes that there is no significant change in location prices.
Fabrice Willot, president of the Belgian Food Truck Federation, confirms the increase in prices.
“Unfortunately, we can only confirm this increase in prices. We must not forget that in 2016, there were the attacks in Brussels and event organizers were required to impose much higher security standards, which a cost. All other sectors, event organizers, have suffered the increase in the prices of goods and merchandise. Obviously, they found themselves with increases in organizational prices. Prices which they probably pass on to the foodtruckers. We have gone from an average of 130 euros per day to more than 249 euros per day since 2018. An increase of more than 190% in 5 years.”
Fabrice Willot says he understands the fears of Donatello and his colleagues. “We understand their concern, but there are other sectors of activity for food trucks. There are private events which are entirely profitable, there are locations for food trucks and other events. “It’s not just the big festivals. There are smaller, more affordable ones. The difficulty for the food trucker will be to find a place because all the food trucks rely on the same type of location”, he adds.
The president of the Belgian Food Truck Federation also gives his advice to ensure a certain profitability in the world of food trucks.
“Will the food trucker generate enough turnover in 4 hours to reimburse or pay for this location? Generally, the food trucker is capable of putting out between 80 and 120 portions per hour. Some are capable of reach 500 or 600 per hour. This will depend on the size of the vehicle and the team. But the average is around a hundred portions. In 4 hours, that makes 400 portions. That makes the price of the part”, he emphasizes.
And to continue: “The food trucker should fall back on other types of location. It’s like any independent. He must choose his location and his activity according to its profitability. A location at 1000 euros for 4 hours is clearly not profitable. I think it’s a little excessive. Food trucks form a small community and they quickly learn who the good or bad organizers are. A somewhat expensive organizer will quickly find themselves without a food truck, because they pass the time word. If the organizer is too expensive, next year he will find himself without a food truck because no one will want to work with him anymore. It’s a win-win for the event organizer and the food trucker. They must working hand in hand.”
How to estimate the profitability of a food truck? Fabrice Willot replies that the question is complex. “It will depend on the product, the sales and production capacity of the food trucker, and the type of event. If it’s an event where everyone can come with their snack… an event where there are a lot of points of horeca sales… All of this will come into play. This is something that will be difficult to measure from the start. It is certain that if we are a food truck on our own, that we sell hamburgers and that there is With 200 customers an hour, are we capable of providing 200 hamburgers in an hour? That’s the question the food trucker will have to ask themselves.”
How to ensure turnover growth? “It’s mainly through the image of the food truck and word of mouth. The more a food truck exists, the easier it will be to find locations. When you start, it’s difficult. The problem is that before covid, we already had an abandonment rate of 56% in the first 12 months of activity. However, it is only from the 13th month that we start to be profitable and have good habits. It’s difficult to start a food truck overnight and be profitable. The first months are necessarily the most difficult. There is training provided by the federation that helps starters avoid making mistakes from the start. Common mistakes : thinking that we only work a few hours a day, that we can set up anywhere without authorization, choosing the wrong product, preparing poorly, thinking that a festival brings in a lot of money when it there are 60 food trucks at the event, to think that we can make money on our own without help… You should know that the profit margin of a food truck is 30%. It’s not huge. Compared to the hospitality sector, it is not as important. Although, at the moment, the hospitality sector is really struggling.”
The president of the Belgian Food Truck Federation also notes that food trucks have not yet reflected the increase in energy and goods prices in their prices. “We think that the increase will arrive in 2024 when they will make their 2023 assessment”, he concludes.
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