Starting a food business in India can be lucrative.
Today, you have multiple options, like a restaurant or a food truck. However, if you start a restaurant, your business depends on attracting customers to visit it. And your reach can be limited to a specific area based on where you are situated.
But there’s no such issue with a food truck business. You can access multiple locations and create a solid customer base. With lower capital requirements and mobility advantage, the business is easier to start and scale.
What is a Food Truck?
In simple terms, a food truck is a truck that sells food items. Some food trucks sell pre-cooked items. But most are equipped with the necessary equipment and staff to cook and serve menu items to the customers. Their biggest advantage is the freedom to move them to different locations.
Is Food Truck Profitable in India?
The food truck industry in India is constantly evolving. The industry was estimated at 650 million dollars in 2012-13 but was expected to jump to 2.7 billion dollars by 2017-2018. That’s a 333% increase in just 5 years. The food truck industry is constantly growing at 8.4% CAGR and does not seem to slow down anytime soon.
Food trucks are highly profitable as well. They can easily bring in 2,00,000 to 3,00,000 INR in monthly revenue, even with a small truck and the right location.
Food Truck Business Plan in India
To start a food truck business, you need a proper business plan and an effective marketing strategy.
Here is the step-by-step guide on how to start your own food truck business:
1. Conducting Market Research
Start with market research. Find out what food items are most popular in the region you want to target. Research your competitors’ menus and their bestselling items. Then, focus on establishing your USP (Unique Selling Proposition) to introduce something new in the market. Understand who your potential customers are and the demography you wish to target.
Conduct proper research considering local zonal laws so you don’t get into any trouble while parking your food truck. You can also analyze your competitors’ marketing strategies and try to figure out what tactics are working best for them.
You don’t have to copy their exact menu and strategy. But you can check what might and might not work for you. This data is helpful while crafting your menu and creating a marketing strategy.
2. Finding the Right Location
Choosing the right location is essential to keep bringing large footfalls. Ideally, you can find a location that has regular traffic with no similar vendors around. Some establishments that fit these criteria are schools and offices.
Your menu items also have a significant impact on the location you choose. If you sell local delicacies, like vada pav, idli, sambhar, etc., schools and colleges can be preferable spots. However, a premium location would be much better if you sell exotic or fast foods, like tacos, nachos, and burgers.
3. Choosing the Right Vehicle
The vehicle size can depend on whether you plan to serve pre-cooked meals or cook and serve on the spot. Ideally, an 18 ft truck is large enough to accommodate your staff and costs around INR 7-8 lakhs.
You can also opt for a second-hand model at about half the price. Moreover, you can modify and design it, which would cost around 1-2 lakhs.
4. Crafting the Perfect Menu
Create a menu that caters to your targeted segment. Introduce new concepts but keep the popular dishes on your menu too. For instance, a Mexican food truck must keep nachos. Customers usually come with an expectation of ordering these items.
As you are operating in a limited space, it is recommended to keep the menu short and simple. In India, you can also opt for veg and non-veg options depending on where you conduct your business. You can also prepare certain dishes with your signature or secret ingredient.
It is a good practice to invoke curiosity among your customers as everyone wants to taste the secret ingredient.
5. Getting the Required Licences and Permits
Just like any other business, a food truck business also requires specific licenses and permits to operate. Here are a few mandatory licenses you must have to start a food truck business in India –
- Food license from the Food Safety and Standards Authority of India
- Commercial Vehicle license from RTO
- NOC from both RTO and local municipality
- Fire Safety certificate from the fire department
6. Hiring The Necessary Workforce
You must hire the right staff to run a successful food truck business. Your cooks must be proficient in preparing the menu items. For instance, if your food truck serves Chinese cuisine, your cooks must be able to cook noodles, fried rice, Manchurian, and other Chinese dishes.
Initially, two chefs and one helper are enough to operate. However, if you want to focus on delivery too, you can hire 1-2 delivery boys.
7. Working on Equipment, Inventory, and POS Software
You need to purchase the required kitchen equipment, such as stoves, utensils, tables, and cutlery. You must connect with good vendors and keep stock of inventory. However, it is recommended to keep the stock low during the first 2-3 weeks to avoid dead stock and track the sales pattern.
Since the pandemic, user behavior has changed, with more and more people preferring online transactions to deal in cash. A good POS system enables you to track transactions and keep your data safe. With POS, you have complete information about your sales and inventory.
8. Branding For Your Food Truck Business
The food business in India is a competitive industry. The only way to stand out is a sound branding strategy.
- Come up with a unique name for your business that is catchy.
- Get a unique logo.
- Design a business name/logo on your staff uniform.
- Send goodies with a business name/logo to your customers.
A good branding strategy increases brand recall value and helps your business convert customers into loyal fans.
9. Creating a Marketing Strategy
A good marketing strategy is necessary to run a successful food truck business in India. You can start with a few thousand pamphlets in addition to a few banners and billboards.
In today’s era, you cannot scale without digital marketing. Therefore, you need a website and a strong social media presence. Post regularly to keep your followers updated about your locations and upcoming dishes. You can also leverage existing followers to create brand awareness with loyalty programs.
YouTube and Instagram can help you attract lots of traffic too. Create a YouTube channel and follow local influencers. You can get featured on their channels and invite them to yours.
You can also create an Instagram account. Collaborate with local influencers and channels that promote local businesses.
An omnichannel strategy can help you engage with customers on various platforms and keep them updated about your upcoming new dishes, discounts, and loyalty programs.
What is The Best Cuisine for a Food Truck Startup in India
The most popular types of food sold on food trucks in India are fast food items, Chinese cuisine, and regional dishes. You can either give a fresh touch to some of the most popular dishes or sell something that no one else is selling.
Usually, the best cuisine depends on the area you choose to serve. For example, people in Delhi would prefer North Indian dishes. On the other hand, people in Mumbai love local delicacies like vada pav.
Hence, craft your menu based on the region and the dishes preferred by the people there.
How Much Does it Cost to Start a Food Truck Business in India?
A food truck business in India can cost anywhere from INR 10-15 lakhs, depending on multiple factors.
- A commercial vehicle costs INR 7-8 lakhs. You can get a second-hand truck for INR 4 lakhs.
- Kitchen equipment can cost around INR 3-4 lakhs.
- Licenses can cost around INR 50,000 to INR 1 lakh.
- Staff salaries can be INR 45,000-60,000
- A good POS software costs INR 24,000 yearly on an average
- Staff uniforms can cost INR 5,000-6,000
- Raw materials can cost anywhere from INR 30,000 to INR 1 lakh
- The marketing budget can be INR 30,000-50,000
- Miscellaneous expenditure can be up to INR 1 lakh
Pros and Cons of a Food Truck Business
A food truck business is more profitable as compared to many other business models. However, it has its pros and cons.
- Requires low capital to start
- Does not bound to a single location
- Lower risks
- Mobility provides much better branding than QSRs
- Flexibility as you can park near a new event every day
- Competitive industry
- Small space compared to QSRs
- External factors like bad weather or local zoning laws can affect your business.
The food truck market is constantly growing and is expected to reach a total size of INR 5.99 lakh crore in 2022-23. It is a lucrative business with higher profit margins and low investment requirements. The market is still in its initial stage and will continue to grow.
If you can serve delicious cuisine at a reasonable price with effective marketing, you can scale. However, you need a fusion of popular dishes and a USP to stand out from the competition.