GO
Loading...

Food Entrepreneurs Taking It To The Streets

By now, Lev Ekster, 26, expected to be a lawyer.

Instead, he spends a lot of time tweeting about cupcakes.

Oliver Quillia for CNBC.com

Unable to find a job after law school, Ekster started selling cupcakes with creative flavors—such as banana cake and peanut butter frosting—off a food truck in New York City.

The truck, called Cupcake Stop, was a way to make some money until the tough job market eased up. Now, a year after launch, Ekster is sitting on a budding cupcake empire; he's expanded to two stores, two trucks and national online shipping.

“If I would have known, I would have saved three years of law school and loans,” says Ekster. “This was never on my radar.”

New Owners, New Offerings

Street food in American cities— long associated with boiled hot dogs and big salted pretzels—is going gourmet as a new generation of entrepreneurs use food carts—and trucks—to offer such choices as Taiwanese-style fried chicken and Kobe-beef burgers. (Take a look at 10 gourmet food carts in our slideshow.)

And unlike the traditional street vendor—often an under-educated immigrant—the new strata of vendors is a well-educated, tech-savvy one, using Twitter and other social networking sites to build a brand and customer base.

"They're not just standing on the corner waiting for people to buy their food, they're promoting themselves online," says Andrew Smith, food history professor at the New School and author of “Eating History: Thirty Turning Points in the Making of American Cuisine.”

During a recent interview, Ekster never put down his BlackBerry, as he constantly replied to customers on Twitter.

He will typically answer questions ("where in soho will u b tomorrow?" "Broadway and Spring"); ask for new location suggestions; post pictures of new cupcakes (such as the Yankees one he created when the New York baseball team won the World Series); and give out passwords that customers can use for a free cupcake.

When anyone buys one, the customer also gets a glossy postcard with the truck's website address across the front, its Twitter handle (@ cupcakestop) on the back and this tag line: "NYC's First Mobile Gourmet Cupcake Shoppe."

More than 12,200 people follow the truck’s Twitter account. About "5 percent to 10 percent" of his customers come to him from Twitter, says Ekster.

National Trend

Outside of New York City, the story is similar. Gourmet food trucks have been popping up in cities, such as Portland, San Francisco and Los Angeles, according to Daniel Delaney, who hosts a podcast on VendrTV that covers street food around the country.

Examples include Potato Championin Portland, a cart that serves Belgian fries with a range of dipping sauces from horseradish ketchup to pesto mayo; and The Grilled Cheese Truckin Los Angeles, known for its grilled-cheese sandwich with roasted butternut squash, sautéed leeks and agave syrup.

Part of the appeal of starting a food-truck business, vendors say, is that the startup costs are less than those of a freestanding eatery.

“I wanted to open a restaurant, but I wasn’t able to afford it after college,” says Thomas Yang, 23, an owner of Taiwanese food truck NYC Cravings.

He studied accounting in college and interned at a bank. “I hated it,” he said. He opened his business using money from an inheritance.

Oliver Quillia for CNBC.com

Although cheaper than a restaurant, starting a truck can still hit six figures.

“I would say, you need about $100,000,” says Vadim Ponorovsky, a restaurant owner who started Frites’N’Meats six months ago.

He serves Kobe-beef or grass-fed Angus burgers along with Belgian fries, each priced below $7.50. He opted for the truck after deciding against the riskier idea of opening a second restaurant in Manhattan. It would require spending $750,000 in startup costs, plus the $30,000 in rent, he says.

The biggest expense for a food vendor business is the cost of a truck and a permit. Used trucks can cost between $15,000 and $20,000 on eBay , while newer ones can run up to $60,000.

Trucks also sometimes need to be reconfigured to add appliances and meet city health rules. Some cities, for example, require a sink with running water or special ventilation.

Yang thinks the investment is worth it.

"It becomes an asset," he says, explaining that a truck can be resold, whereas rent money for a restaurant cannot be recouped.

In New York City, a legal permit costs about $200, but because they are renewable and limited in number, they are in short supply; thus, a permit can fetch $10,000 or more on the black market, says Ali Issa, an organizer at the Street Vendor Project, a non-profit group representing some 900 vendors.

Loyal Customers

The new street vendors have a strong fan base, evident in the long lines of office workers waiting in front of trucks in Los Angeles and New York during lunch.

“They’re only here once a week,” says Kimoon Yon, who was buying a Taiwanese-style fried chicken meal from NYC Cravings during its regular Thursday Midtown stop. Yon bypassed a number of soup stores, salad bars and upscale restaurants to eat from NYC Cravings, saying “I can go to any of these other places any other time I want.”

A customer orders an ice cream cone from a Van Leeuwen gourmet food truck.
Oliver Quillia for CNBC.com
A customer orders an ice cream cone from a Van Leeuwen gourmet food truck.

Big business is taking notice too. Kim Ima, owner of The Treats Truck—a bakery truck—stars in a Visa web, radio and print commercial promoting the company's small business credit card.

Schnitzel & Things was featured for a few seconds on a T-Mobile TV commercial.

And Van Leeuwen Artisan Ice Cream is now sold in Whole Foods .

Ben Van Leeuwen, 26, who started the company with his wife and brother after leaving a job at a media-buying firm, says the truck happened to be parked next to a Whole Foods store their first day on the job in 2008. Hours later, an employee approached them, which led to a deal.

Though the business model may be new, the vendors still have to deal with old-school rules. Traditional vendors in New York City, who sell everything from hot dogs to shish kabob, are protective of their turf.

Some vendors go on their Twitter feeds to vent. "Truck had to leave midtown :( ," according to a post on the Van Leeuwen Twitter page. "There were 3 [other ice cream trucks] threatening our driver’s life. Scary stuff! Sorry guys, maybe another time."

Ekster says his tires were slashed twice in a one-month period while the truck was parked around the Flatiron Building in lower Midtown Manhattan.

"If they see you take their business away from them there's no telling what they'll do,” says Ekster.

As for his law career, well, that's still in the oven—so to speak.

“I still want to practice law sometime in the future." says Ekster. "We’ll see how long this goes for.”

Symbol
Price
 
Change
%Change
DTE
---
EBAY
---
V
---

Featured