III. Industry Analysis
[Company Name] directly or indirectly competes with all foodservice providers nearby that offer similar dining experiences. Competition will come from supermarkets, food trucks, coffee shops, bakeries and other retail establishments. Direct competition will come from companies offering 100% natural, organic foods similar to [Company Name].
Industry Statistics & Trends
The following industry size facts and statistics bode well for [Company Name].
- While the Food Truck industry’s best years may be behind it, vendors will continue to perform well over the next five years, benefiting from consumers with deeper pockets able to spend on pricier gourmet food options. The industry is expected to enjoy a strong five years due to positive economic conditions and the gourmet food movement.
- Consumers are expected to demand higher-quality food, a wider variety of styles and tastes, better presentation, and, most importantly, more healthy menu options. Consumers are no longer willing to accept that choosing to eat street food means sacrificing quality or healthy options. Operators that include healthy options on their menus will be best situated for success. Vendors that continue to offer unique food options will also be in a strong position by carving out a niche and developing a loyal customer base. These customers will often visit the operator’s website or follow the company via social media to determine when the food truck is at a nearby location.
- The industry will also benefit in the next five years from an increase in the urban population, which is expected to comprise 81.9% of the US population by 2020. The industry benefits from agglomeration because it relies on high foot traffic. Additionally, urban dwellers are also more likely to purchase meals rather than cooking at home due to their higher-than-average incomes and limited spare time.
- As regulations become more accommodating and the nation’s interest in all things gastronomic increases, more food truck vendors are expected to enter the industry. However, growth in food truck numbers will be tempered by the increasingly competitive nature of the industry, which is approaching maturity.
- Operators will need high turnover and limited wastage in order to generate a profit as the broader food-service sector gets even more competitive. The most successful food trucks will earn higher profit margins due to clever marketing and branding, which enables them to charge a premium for menu items.