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Market Days + Food Trucks = Serving Low-income Neighborhoods

What if food trucks sold fresh produce instead of hotdogs? Traveling vendors can set-up shop in different neighborhoods on specific days in order to provide fresh food to locals. By providing mobile service, particularly to under-served urban neighborhoods, many different groups benefit. Because these trucks travel to different neighborhoods each day, they can also share new ideas and improve the scalability of the project.

Photo of Cory Quach
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Organizing market days will require the cooperation of several major stakeholders. Weaving a network of partners will engage many groups and help scale the project to reach even more communities.  See exhibit 1 for complete stakeholder matrix.

1) Local governments – Enlisting the help of local governments and leaders is essential to identifying and serving low-income areas. Local governments must be willing to provide low-cost permit incentives to attract entrepreneurs. 

2) Businesses – Many businesses are unwilling to invest in low-income areas for several reasons. Permit cost reductions alone will not attract new business. Mitigating risk due to crime and profit loss is crucial. What can attract new business in the first place is the understanding that low-income areas still represent a large revenue and profit pool. By promoting mobile market days, business owners reduce fixed costs and lower break-even sales requirements. Market days also allow business owners to better align supply with demand needs with the effect of reducing waste (and increasing profits).

3) Local residents – The biggest issue facing residents in low-income neighborhoods is accessing fresh and healthy produce. By providing scheduled market days residents can plan to purchase produce on a weekly basis. Not only will residents have access to healthier alternatives they can also buy on a consistent basis. 
(Add-on) Additionally, business workshops can be offered to help community members build businesses. As the inaugural group progresses they too become trainers and leaders to build opportunities for other community members.

Add-on:

4) Financing organizations - Whether from bank or micro-financing firm, obtaining capital is imperative in ensuring success. Focusing on community residents will allow for sustainable growth. Again, these communities are untapped market segments if approached responsibly, can be developed into highly viable revenue pools.

5) Educators - This group of stakeholders can also be involved in providing education about food to residents. Whether nutrition advise or recipe ideas, this is yet another piece that can ensure long-term success. Easy and quick food does not always have to be unhealthy. Residents need the opportunity to learn how to prepare them.

6) Farmers/suppliers - If farmers are able to serve local urban neighborhoods they can reduce transportation costs. Urban residents benefit by having access to healthier foods.

4/30/2011

Have you wondered what it would cost to actually start a produce food truck? I certainly have. Here's an interesting article that covers some of the costs of starting a "traditional" food truck business.


In the mean time I will attempt to do a financial analysis as to the actual start-up costs.  Stay tuned!

5/4/2011

I spoke to a few of my favorite food truck owners in my neighborhood. I set up a quick outline of the costs associated with starting up a business like this. It is attached as an image above. I look forward to some feedback on other costs that should be consider in making something like this happen. Please note that the costs used for insurance, permits, etc. represent a yearly cost. The idea is that although revenue will be generated throughout the year it is good to have at least a year's worth of cash flow in the bank to be safe.

Concept builds

Builds have been added periodically above. Further builds will be included in this section.

There are a few main areas that need the most help. They are listed below and anyone who are "experts" in these areas please chime in.

1) Legal - How can the project effectively engage the local governments in a legal perspective to implement the project.

2) Financial - Low-cost loans are at the heart of empowering would-be low-income entrepreneurs. How can we do this sustainably? See comments under "implementation" section below...specifically point #3.

3) Operational - How can all the stakeholders link effectively and seamlessly?

UPDATE 5/22/11

So many great suggestions I hope that I am able to capture it all.

Some of the major call-outs have been associated with building strong linkages between local growers and vendors as well as linking communities, both within and across towns. Additionally, education is an integral component that will ensure the sustainability of such a project as families learn the best ways to keep the healthful integrity of the foods that they purchase both through storage and cooking. Additions have been made in the sections below to cover some of these call outs.

UPDATE 5/23/11

Based on the suggestions of Samantha Harmon and Ashleigh Ferran I added a component that can help link the use of hub kitchens to the truck vendors. The hubs will act as a link between small farmers and the vendors. Also - education and training can be offered through these hubs as described by Samantha's concept. The key is to build strong networks in which all stakeholders can benefit and build a critical mass.

What actions would need to be taken to turn this idea into a reality?

This concept requires the help of city governments and community leaders. Though every city is different, a rough schematic can be formulated to scale for other cities. Let's use the city of Philadelphia, where I currently reside.

Below is a lost of actions that may need to be taken to implement this concept. Though the actions are listed in a rough chronological order, many can be done concurrently or in different orders as needed.

1) Identify low-income areas that could benefit the most from mobile market places: West Philly and North Philly.

2) Negotiate with local governments to allocate existing market space in those areas or develop new spaces in vacant and usually distressed areas. Also negotiate reduced rate operating licenses.

3) Negotiate with financing institutions to provide low-cost loans to entrepreneurs willing to invest in said low-income areas. Admittedly, this step is rather difficult. Providing low-interest "teaser" rates will pique the interest of many entrepreneurs but a balance with sustainability must be reached. First, a risk assessment must be made of those who have the ability to pay off the loans within a reasonable amount of time but also generate enough interest revenue for the financial institutions. A possible solution is to build a hybrid fixed/variable rate loan system that can reward individuals for their ability to successfully repay their debt. I'm no financial guru so anyone who has ideas on this please step in.

4) Search for local farmers to supply the produce for these vendors. As Anu points out, creating networks with other vendors to utilize them as suppliers of surplus produce could help drive down prices and eliminate excess waste.

5) Search for resident entrepreneurs or current business owners who will become the vendors. Special consideration should be given to those with business plans to support local growers and healthier food options (both fresh and prepared meals).

6) Enlist the help of school districts to educate residents on healthy preparation and cooking techniques. This can be done through class work, seminars or instructional literature.

7) Enlist the help of other community organizations to do the same a 6: church groups, YMCA, City Year, etc. This group can also help in the education of communities. Cooking classes or nutritional classes may be provided through community groups.

8) Advertise for the market days using the groups in #6 and #7.

Who might make a good partner for this project?

Government:
1) School districts
2) Parking agency
3) Zoning and permit offices
4) Food regulation agency
5) WIC

Volunteer:
1) CIty Year
2) YMCA
3) Head Start
4) Free clinics
5) Shelters


Business
1) Local banks
2) Credit unions
3) Local farmers
4) Media groups (local radio/TV stations)
5) Good Company Ventures (a VC group)
6) Empty lot property owners

Other
1) Spiritual groups
2) CSAs
3) Community design collaborative
4) Colleges and universities
5) Local hospitals
6) Nutritionists and Doctors (to educate communities)

What suggestions would you have for potential sources of funding for the development of this project?

The key is to create incentives to attract entrepreneurs to invest more into low-income communities. Financing at reasonable rates is imperative in building strong vendor communities for the market days. Again, point #3 under "implementation" addresses this.

Another option is to involve socially focused venture capitalist firms. In Philadelphia, one such company is Good Company Ventures: http://www.goodcompanyventures.org/.

Virtual team

Paul Fr
Melani Rae
Kevin Derrick
Nilima Achwal
Prachi Mishra
Erin Gibbons
Maya
Robin Waldroup
Charles McGhee Hassrick
Maia Smith
Niko Simonson
Quyen Nguyen
Hannah Strange
Arjan Tupan
Ann Panopio
Sarah Adams
Jason Morenikeji
Samantha Harmon
Ashleigh Ferran

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Photo of Congmin

That is a great idea of "food trucks sold fresh produce instead of hotdogs", and it also what I think the right thing to do not only for food trucks, but also for customers. Because hotdogs and burgers are fast food, which is not healthy at all. Yes, I know it is easy to cook on the food trucks, but I don't think that people want to eat the fast food every single day, especially the office people. They want something healthy and fresh to eat, not some hotdogs or burgers that they could purchase at McDonald's, Wendy's, or Burger King.
As the article said, "(They could provide) mobile service, particularly to under-served urban neighborhoods, many different groups benefit. Because these trucks travel to different neighborhoods each day, they can also share new ideas and improve the scalability of the project." which is not only the food trucks own to get benefits on it, but also the consumers. Because consumers could eat healthy and fresh food every day while they work, and students, visitors could also eat it at their communities to have great food at a great price. It's a win-win.

Photo of Fei

I like your idea with "mobile service which is not only the food trucks own to get benefits on it, but also the consumers. Because consumers could eat healthy and fresh food every day while they work, and students, visitors could also eat it at their communities to have great food at a great price. It's a win-win." I hope all people can eat fresh food everyday and doesn't consider on price.

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