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Road to opportunity

Brick-and-mortar chains jump on food-truck bandwagon to build awareness, test products

Conventional wisdom says a vehicle loses most of its value the second it’s driven off the lot, but don’t tell that to the growing list of restaurant chains that are merging their established brands with the white-hot food truck phenomenon.

Chains as varied as Dairy Queen, Gold Star Chili, Qdoba and Sizzler are not only chasing the lunchtime sales the independent gourmet-food trucks are racking up, they are using their vehicles as billboards, catering operations and test kitchens on wheels.

Sizzler, for example, envisions a food truck spreading the news of its still unfolding brand turnaround.

“Our intentions are to use a truck as a way to tell people we’re not the same old Sizzler,” said Kerry Kramp, chief executive of the nearly 200-unit Culver City, Calif.-based chain. “You can talk about remodeling stores and adding fresh food [with customers or potential franchisees], but a truck cuts through talk that people traditionally hear, and it shows that we’re willing to take a shot at finding ways to show that we’re really different.”

Kramp, an admitted “junkie” of the Kogi Korean BBQ-to-Go
truck in Los Angeles, plans to make the case to Sizzler’s corporate owners for a food truck. At a time when Sizzler wants to revitalize its brand image — the chain just broke its “Renegade” campaign with an aggressive meal deal and new commercials — a food truck would appear both trendy for foodservice but unconventional for the 50-year-old chain.

“There’s something renegade about what [food trucks] were doing, and there was a natural sense that we should do it at Sizzler,” Kramp said. “We thought, ‘How cool would it be if we used social media and a truck that had our attitude?’ Our brand ‘revolution’ has a direct correlation to what people standing in line with an interest in food trucks are all about: They want something different and with some attitude, and they want to eat it their way.”

Hitting the streets

Sizzler isn’t the only chain showing its eagerness to trade paint with independent food trucks. Even as it announced the closure of several ESPN Zone restaurants last month, ESPN teamed with Kogi founder Roy Choi to develop two Match Trucks in Los Angeles and New York that sold street foods and broadcast World Cup games on large flat-screen TVs. Burgerville, a 39-unit gourmet quick-service chain based in Vancouver, Wash., also is roaming the streets with its Nomad mobile restaurant.

Dairy Queen hit the road in its Blizzardmobile not for the sales potential, but to drive awareness for the 25th anniversary of the Blizzard and to sample the new Mini Blizzard. The truck not only is meant to gin up public relations on its 25-city tour, which provides content for the brand’s Facebook page, but also is featured in Dairy Queen’s commercials this summer.

“It’s making quite a difference wherever it visits,” said Michael Keller, chief brand officer for the Minneapolis-based chain, “and it’s making a difference for us online, where all these activities are being amplified on Facebook.”

Keller agrees that trucks could yield great opportunities for catering and “guerrilla-style sampling” for chains, as well as cause marketing. Dairy Queen, which has 5,700 units worldwide, has parked the Blizzardmobile outside several hospitals associated with Children’s Miracle Network, its charity partner.

Cincinnati-based Gold Star Chili also touts its truck’s presence at charity events and status as a sought-after silent-auction prize as major boons to its cause-marketing efforts, said Charlie Howard, director of marketing for the 95-unit Cincinnati-style chili specialist.

The chain’s Chilimobile, which started in 2008 solely as a 
marketing vehicle but has since been upgraded with a full kitchen for selling food, also allows the chain to break even on sponsoring local festivities. Easily attainable sales from the food truck often make back the cost incurred to support and promote events.

“Event marketing really came first,” Howard said. “There were a lot of events, particularly in the spring and summer, that we sponsored, so we were able to partner with even more events and offset that cost of sponsorship with selling our chili products.”

Catering in demand

But the biggest potential payoff could come from catering, Howard predicted.

“We’ve always had an ad hoc catering operation,” he said. “It was nothing we really marketed, but people often would call and ask if we did catering. This let us formalize our catering operation and differentiate it by branding it a ‘Cincinnati-style experience.’ … With the lunchtime business, while we’re selling product in areas where we don’t have a presence, our goal was just to break even. But if catering takes off, we may take on multiple Chilimobiles.”

Catering is a typical point of entry for restaurant chains taking the food truck route, for several practical reasons. Food trucks combine all the preparation and delivery needed for catering into one staff and vehicle. For restaurants without the kitchen space to add catering, an equipped truck provides that facility and keeps it separate from the brick-and-mortar restaurant.

In-N-Out Burger’s Cookout Trailers are used primarily for catering, and customers can reserve the trucks and have them park at an event for an allotted time, which is why the trailers cater everything from office parties to wedding receptions. Carl’s Jr. and Sprinkles Cupcakes also cater with food trucks.

Acing the test

Mobile restaurants cater to niche audiences in another crucial way: test marketing. Qdoba Mexican Grill currently is researching the appeal for its Street Tacos by taking them to its younger target demographic in Seattle, setting up its Taco Truck outside bars and nightclubs at closing time. Customers have descended on Qdoba’s Taco Truck out of curiosity and out of hunger, officials said, noting that the environment is more conducive to testing than a regular Qdoba restaurant, where people tend to stick to what they already like.

“We’ve always been about events and unique ways to sample,” said Doug Thielen, manager of nontraditional marketing and public relations for the 500-unit fast-casual chain, which is based in Wheat Ridge, Colo. “The Taco Truck is the perfect venue for testing Street Tacos because the trend of food trucks made it very easy and because it’s a street-style affair.”

Thielen and Ted Stoner,
Qdoba’s director of strategic product development, said the Taco Truck would serve strictly as a test-marketing vehicle for now, though Qdoba may explore sales, catering or other uses.

“Right now, the Taco Truck is getting gut reactions from guests, which is difficult to do in a regular venue,” Stoner said. “Ideally for me in R&D, it’s great to use as a sampling device to capture some data, and also as a PR device. We don’t have the concentration for broadcast media in a lot of markets.”

Thielen added that, even though Seattle is a corporate market and Qdoba paid for the truck from the corporate budget, franchisees think the Taco Truck breaks through the clutter of restaurant advertising and are keeping tabs on it.

“The truck has a life beyond what we’re doing with it today,” Thielen said.

If Sizzler gets its proposed truck rolling, Kramp said, the brand would get a chance to try out products not seen in its restaurants, like fish and chips or a steak sandwich. Ideally, success with food truck items could drive guests to the restaurants, many of which have been refurbished over the past two years.

Cash or clunker?

Which begs the question about return on investment: Why spend $200,000 outfitting a food truck when a restaurant could be reimaged for that amount? For all the brand benefits food trucks present, chains still need to recoup the significant start-up costs. Reasons and time horizons for that payback vary by chain.

“If it doesn’t make business sense and can’t fund itself, then I wouldn’t even present it,” Kramp said. “The No. 1 selling point is incremental awareness and to truly engage with consumers who aren’t our regular users at this moment.”

Gold Star Chili’s truck was a used vehicle, and outfitting it cost about $50,000 out of an annual marketing budget of about $2 million, Howard said.

Dairy Queen’s supplier partners — Kraft, Coca-Cola, Hershey and Nestlé — funded the Blizzardmobile’s build-out and operating costs, meaning the chain’s awareness comes from a small investment on its part. If Dairy Queen wished to extend the Blizzardmobile’s tour or build more trucks, convincing partners that they would benefit would become crucial. But it’s “impossible to isolate the variable of the Blizzardmobile” on the bottom line, Keller said, because it’s asked to function everywhere from sampling to commercials and point-of-purchase material.

“Because the Blizzardmobile was funded by our partners, we’re leveraging their investment,” Keller said. “We need to deliver enough exposure for their brands in a variety of different media. … The ROI equation is completely dependent on the purpose you’re asking the vehicle to serve.”

The payback also takes forms other than money in the cash register, he added.

“One of the things you have to believe is that you’re making a really strong connection to your customers,” Keller said. “If it feels right for the brand and the way our customers would expect to experience Dairy Queen, I don’t know how to measure that, because if it works, it’s in long-term brand loyalty and equity. Then the ROI is infinity.”

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