Why are Food Truck menu prices so high at festivals?

Dear David, Why are food truck menu prices higher at festivals than for catering or at lunch stops?

Good question! 

Everybody complains about how expensive food is at fairs and festivals and most assume that it is the food vendors making a killing at the expense of the "captive audience" attendees.  Well, one of the dirty little secrets about festivals is how much many organizers/promoters charge those food vendors to take part.  Up to a point, it is understandable. T, they have a lot of expenses in securing the venue, marketing, security etc., but some situations become usurious.  

Ready for a little food truck festival economics?

Permits & Licenses
First, let's talk about permits.  Every state is unique, but there are more similarities than differences.  I'm in Arizona. Most Arizona cities and towns require their own business licenses.  Every Arizona County has its own "Environmental Services" (Health) Department and they each require their own permits and, usually, inspections.  That means that if in January a food truck was working a festival in Goodyear AZ, they would need a Goodyear City business license ($75) AND a Maricopa County mobile food service permit ($600). If next month that same truck did an event in Havasu City, it would need a Havasu City Business License ($110), AND a Mohave County temporary food vendor permit ($95).  Next month, Flagstaff? $8 business license, Coconino County Food Service permit $390.  Some of these fees are good for a full year but if you only do one festival a year in a particular city or county a year, you can see how all these fees add up quickly on a per-event basis!

Vending Space Then you need to pay for vending at each event.  It is common for the "space charge" for a 10'x20' food truck/trailer slot at a good festival to be around $300 per day (some are closer to $100/day but many are $500+/day).  At $300 per day space charge, a truck that expects to run a 15% net profit would need to sell over 285 $7 sandwiches a day to break even and not LOSE money.

Percentage Rakes
Some events also charge food vendors a percent of sales (SALES, not profits) of as much as 25%, often on top of a space charge. Few food trucks maintain a 25% profit (exceptions being kettle corn, hot dog, or novelty ice cream vendors).  If you're losing 10% on every sale, you can't just make it up on high volume, so you need to raise menu prices accordingly. In fact, even if the truck from above raised the price of that $7 sandwich to $9 for the festival they would still have to sell 375 of them a day to break even!

Utilities
To put out awesome freshly made hot meals, most food trucks need to have water, propane, and electricity to run their cooking and refrigeration equipment and clean their wares. Lots of us can be fully self- contained but not for an unlimited time period. Generators require frequent fueling, propane tanks need to be refilled, there's only so far you can stretch 40 gallons of water, and let's not forget about properly dumping the waste water either. 

All of this costs money, but festivals may require you to buy power, water and (for very extended events like state fairs) even waste water connections from the site.  It is not unusual to have to pay $100 to $300 for utility hook-ups at a 3-day event.

Beverages & Ice
Coke or Pepsi, or other large companies, sponsor many events.  Often, those events restrict beverage sales to ONLY products from those companies.  Tough but understandable.  

SOME of those events also require that food vendors purchase all beverages sold at the event directly from the sponsor at inflated prices than those available independently off-site.  They may further require that you buy all the branded cups, etc for service from them as well (again at a substantial mark-up).

So... You can see how there is a lot of upward price pressure, just to survive financially at these events.

David's Festival Rant

"Sustainability"
People love to talk about sustainability these days.  We ran our successful 100% off-grid goat cheese dairy for over 15 years and know a few things about sustainability.  One key component to sustainability that people forget to talk about is that if you work so hard and spend so much money being "green", or "organic", or "carbon neutral", or "sustainable" that you burn out and go broke… you weren't being sustainably at all, were you?  

The true measure of the sustainability of a business, whether a dairy or a food truck must be its ability to stay in the game long-term - to sustain the business - and that means paying your bills and making a profit.


And a Call to Action
We at Grillin N Chillin don't mind working hard (obviously!) and we don't mind paying a fair price for a spot at a festival, but do we mind supporting a rigged and unscrupulous system that shoves a never-ending parade of budding, unsuspecting would-be culinary entrepreneurs through the festival grinder with promises of 10s of thousands of hungry  attendees with unlimited cash, just waiting for their food truck to arrive.  We will not support such promoters, organizations or events with our time, money or food.  And we hope you won't either!