RESEARCH INTO THE FEASIBILITY AND VIABILITY OF STARTING A

COAST TO COAST FOOD TRUCK BUSINESS

By
ANDREW KURNIA TEGUH
2019009490

Dissertation submitted in part fulfilment of the requirement for the Post Graduate
Diploma in Business Enterprise

In the Faculty of Business Management

At
SOUTHERN INSTITUTE OF TECHNOLOGY
INVERCARGILL, NEW ZEALAND

Supervisor: Julian Galt

Dissertation Word Count : (111)

Table of Content, Refernences and Appendix: (111)
Total Word Count : (111)

(November, 2020)

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 1

2. LITERATURE REVIEW

2.1. Introduction to the Literature Review

Included in this chapter are theory and statistical data related to starting a food truck business.
The literature review was collected from various reliable and credible sources. The literature
review is useful to get a deeper understanding and knowledge obtained from previously
published researc. Moreover, the literature review can also be useful for identifying related
information that can be taken into consideration in making decisions to open the multi-country
food truck business.

2.2 Food Truck

According to [ CITATION Jen19 \l 14345 ] “A food truck is a large vehicle with a kitchen to make
and serve food”. Coast to Coast operational activities are carried out in a mobile kitchen inside a
truck. Coast to Coast will have a large kitchen equipped with all the necessary kitchen appliances
and utensils to prepare the foods ordered by customers. Coast to Coast will also have a big
freezer to store food supplies. Food supplies which include meat, vegetables, and fruits need to
be stored in the freezer so that the food that will be used and processed as ingredients remain
fresh. Coast to Coast will always be committed to serving fresh and delicious cuisine from
different countries.

2.3 Coronavirus Pandemic

In 2020, the coronavirus outbreak has been labelled a global public health emergency by the
World Health Organization (WHO) and has infected 935,189 people and killed 47,192 people at
the time of writing [ CITATION Wor20 \l 14345 ]. Coronavirus (COVID-19) is an infectious
respiratory disease caused by a newly discovered coronavirus [ CITATION Wor \l 14345 ].

As reported by Worldometer [CITATION Wor20 \n \t \l 14345 ], cases of coronavirus in New

Zealand reached 797 people at the time of writing. On March 23, 2020, New Zealand Prime
Minister Jacinda Ardern announced a national lockdown for 4 weeks and closed all businesses
that were not categorised as essential businesses such as cafes and restaurants [ CITATION Lab20 \l
14345 ].

The New Zealand government policy to lockdown the country was the right step to prevent the
widespread of the virus identical to the steps taken by China which became the origin country of
the coronavirus. Wuhan, which is the centre of the coronavirus spread in China went into
lockdown on January 23, 2020 [ CITATION Lil20 \l 14345 ].

Figure 1. Coronavirus active cases in China.[ CITATION Wor201 \l 14345 ]

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As can be seen in figure 1, there was a significant decrease in the number of cases of infected
people by the coronavirus in China after the lockdown strategy took effect. As implemented by
China, the lockdown strategy was proven to be effective in decreasing the virus from spreading
and infecting more people.

Reflecting on the previous pandemic, it can be concluded that a pandemic will end, including
COVID-19. In 2009, WHO declared H1N1 swine flu as a pandemic. In September the FDA
(Food and Drug Administration) invented 4 vaccines, and in December opened the opportunity
for anyone who needed them and by August 2020 the pandemic was declared over [ CITATION
Lau20 \l 14345 ].

Currently, The World Health Organization is working with scientists across the world on at least
20 different coronavirus vaccines and the clinical trials and safety approvals needed to get a
functioning vaccine and distributing it could take up to 18 months [ CITATION Dun20 \l 14345 ].
Based on the statement of scientists, presumably, the vaccine will be invented around the third
quarter of 2021. The distribution of the functioning Vaccines will suppress the spread of the
virus and will produce immunity to the virus and can put an end to the pandemic.

Coast to Coast is planned to start operating in 2022. Based on data and facts that have been
described regarding the coronavirus pandemic presumably, the pandemic will be finished and the
situation will be improved so that, the opening and operation of Coast to Coast business can run
smoothly and successfully.

2.4 Food Trucks are Growing in New Zealand

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Sheldon Nesdale, a marketing adviser in New Zealand who owns a list of all registered food
trucks stated that the food truck business is entering its beginning and it is absolutely boom time
in New Zealand (as cited in Shaw, 2018). He also stated that there was always a new food truck
business that is registered in New Zealand, every week. As a food truck business, this is an
excellent indicator that shows that the business keeps growing and receiving a good response
from the public,

Sheldon Nesdale also stated that the food truck is delicious and gourmet, great value for money,
mobile and can turn up to events [ CITATION She \l 14345 ]. Coast to Coast as a food truck business
will have less operational and start-up costs compared to conventional restaurants, will be mobile
and serve events and celebrations held within the city.

2.5 Food Truck Friday Success in Invercargill

The first Food Truck Friday event that was successfully held in Invercargill at Wachner Place on
Esk Street with more than 500 people attended and served by 7 food trucks vendors [ CITATION
Wha16 \l 14345 ]. Whatsoninver [CITATION Wha16 \n \t \l 14345 ] also stated that the event was a
great success as proved by the large number of vendors selling out early due to the high demand
by visitors. The space was filled with vibrant crowds and all visitors enjoyed the food outdoors.
Based on high public enthusiasm and high sales made by the food trucks at the event in Wachner
Place, Invercargill. it can be concluded that the food truck business is a business that has a good
opportunity to be started in Invercargill.

2.6 New Zealand Local Councils Supporting Food Truck

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Sheldon also stated that local councils in New Zealand have realized the benefits of community
events and made it less complicated for vendors to set up shops (as cited in Shaw, 2018). The
support from the local councils will be very beneficial for Coast to Coast business because it will
be easier to obtain permits to promote the business and not promoting the business illegally.
Obtaining the support of New Zealand government will greatly assist in business operations and
contributing to the business expansion.

2.7 Percentage of New Zealand Households Spent on Eating

Out.

Figure 2: New Zealand relative importance of food price index subgroups, Expenditure weights
September 2017. [ CITATION Sta17 \l 14345 ]

Figure 2 explains that more than a quarter of New Zealand's food expenditure is for eating out,
which is 26%. According to [ CITATION Sta17 \l 14345 ] There was a 3% increase in the number of
New Zealanders who spent money on eating out compared to 2014, along with a 3% decrease in
grocery items purchases [ CITATION Sta17 \l 14345 ]. It indicates that fewer people were buying
groceries to be cooked at home. The rising trend number of New Zealanders who spend money

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to eat out is a business opportunity that shows there is a market to be served. Coast to Coast can
be an option for New Zealanders and serve people who prefer eating out, especially in
Invercargill City.

2.8 The Attractiveness of Food Trucks.

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Figure 3. The attractiveness of food trucks. [ CITATION Ros17 \l 14345 ]

[ CITATION Ros17 \l 14345 ] in figure 3 described the reasons why food trucks are very attractive
when choosing a new business to start. Leadem stated the reasons are because food trucks are
cost-effective, flexible and unique, effective in communication and mobile.

Cost-effective:

As described in figure 3, food trucks startup costs are relatively low and it is more affordable to
start a food truck business over brick-and-mortar restaurants. The option of starting a food truck
business is also very suitable for first-time entrepreneurs and able to generate profits reaching
$500,000 per year.

Coast to Coast as a food truck business is the right option to start a business in the culinary
industry. Coast to Coast does not require a large start-up cost compared to opening a
conventional restaurant, does not require to pay for buildings weekly or monthly rent and can be
operated with only a few employees.

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(Please refer; Section x.X.X Business plan, page XXX).

Flexible and unique

Leadem stated that food trucks are flexible and unique because they are able to try new concepts
easily, can be flexible by serving the crowd in accordance with the city’s events and celebrations,
and be able to have a custom personalization for designing the trucks [CITATION Ros17 \n \t \l
14345 ].

The menu that will be offered from Coast to Coast is going to be flexible. Coast to Coast will
keep updating the menus according to customers’ preferences and trends on the market. Coast to
Coast will release a limited-time food menu and present cuisine from new countries (other than
Indonesia, Italia and Korea). Coast to Coast will introduce the new menu in social media to
promote it and monitor the sales of the new menu. Coast to Coast will correspondingly ask
customers opinions and decide whether to continue or discontinue the menu. By doing that the
menu on the food truck will always in accordance with the customers' wants and preferences.

Coast to Coast’s business will have a truck personal ownership (not renting). Therefore, the
business owner can design the food truck in line with the owner's preferences. Coast to Coast
will be designed with a bright colour selection so that it will attract the attention of the
customers. The striking colour selection also attracts customers to take pictures with food trucks
and post them on social media which will become indirect marketing for Coast to Coast.

(Please refer; Section X.X.X Business plan, marketing page XX).

Effective in Communication

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As shown in figure 3 that the food truck business is effective in communication, particularly for
millennials. Coast to Coast will make effective use of social media to increase its presence in
social media. Coast to Coast will post professionally taken photos of food and events attended
through social media Facebook and Instagram three times a week. In addition, Coast to Coast
will conduct promotions by giving discounts to customers on the condition that customers must
first follow Coast to Coast social media accounts. In addition, through the mobile application that
will be launched, Coast to Coast will be receiving feedback and suggestions from customers.
Feedback from customers is very valuable for the progress and development of Coast to Coast
business.

Mobile

Food truck has the advantage of being mobile compared to other conventional food services.
Coast to Coast as a food truck is very mobile which means it can move from one location to
another in accordance with events and celebrations in Invercargill. By serving customers in
different locations, the Coast to Coast business can introduce and gain exposure of its business to
the general public, increase brand awareness and gain more market share which in turn will
increase the sales and profits of the venture.

Development of technology, for example, social media and google maps are also very helpful for
the food truck business. Navigation services such as Google Maps can guide customers directly
to reach Coast to Coast. Coast to Coast will also pay a fee to become a permanent food service
provider at monthly or weekly events, for example, a rugby match event held weekly at ILT
Stadium Invercargill.

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2.9 Multi-Cultural Food Festival in Invercargill Proves Big
Success.

Even though bad weather conditions occurred (rain and wind), the multi-cultural food festival in
Invercargill was successfully held and was visited by many people and at the end of the night,
there was not a single stallholder left with much food [CITATION Sam171 \t \l 14345 ]. The success
of the Multi-cultural food festival as proved by the sales of foods at the multi-cultural food
festival despite the bad weather conditions in Invercargill indicates that Invercargill residents are
enthusiastic about trying new cuisine from different countries. Coast to Coast can take this
opportunity by providing more culinary choices for people in Invercargill especially Indonesian
cuisine that is not widely known in Invercargill.

2.10 Indonesian Food in World’s Top 50 Best Foods List Based

on CNN Travel

Based on data published by [ CITATION Che17 \l 14345 ] shows that Indonesian cuisine (Rendang)
ranked first as the most delicious food in the world, Indonesian-style fried rice ranked second
and Chicken Satay ranked 12th in the list of 50 delicious foods in the world. The data collected is
based on the opinion of 35,000 readers from CNN travel. Therefore, the list is not based on one's
preferences but based on the preferences of the majority of the readers. Indonesian cuisine which
occupied the list of 50 most delicious food in the world can be a positive indicator for the
introduction of the Indonesian cuisine in Invercargill.

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2.11 Invercargill Accommodation and Food Services Business
Births & Deaths 2001-2019.

Figure 4. Accommodation and food services business births and deaths in Invercargill, New Zealand
[ CITATION Sta191 \l 14345 ]

In figure 4 can be concluded that the birth of the food services businesses in Invercargill was the
highest in 2019. On the other hand, the food services business ceasing operation in Invercargill
were relatively low compared to the business starting operation which signalling that food
services in Invercargill could survive and keep operating. The birth of a new business indicates

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that there is a market that needs to be served and at the same time signalling a good prospect for
Coast to Coast business.

(Please refer; Section X.X.X 5-Forces, marketing page XX).

2.12 Unemployment Rate in Southland Region, New Zealand

2019

Figure 5. The unemployment rate in the Southland Region, New Zealand[ CITATION Sta192 \l 14345 ]

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Data on [ CITATION Sta192 \l 14345 ] shows that there was a significant decrease in the number of
unemployed residents in the Southland region. In 1989 the unemployment rate was at its highest
peak of 12.2%, but in 2019 the number dropped to 4.5%. Working and earning residents will
have a higher possibility of spending money to eat out as eating out is not considered as a
primary need. A low unemployment rate indicates better residents’ purchasing power and will
more likely to contribute to business growth.

(Please refer; Section X.X.X Pricing strategy, marketing page XX).

2.13 Access to Phones, Fax Machines, and Internet Kingswell-

Clifton and Invercargill City 2013 Census.

Figure 6. Access to phones, fax machines, and internet Kingswell-Clifton and Invercargill City 2013
census. [CITATION Sta13 \l 14345 ]

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Figure 6 depicts that more than 50% of households in Invercargill have access to the internet. In
2013 the number of Internet users in Invercargill had reached 70.7%. The number of cell phone /
mobile telephone users was also more than half of the population, reaching 83.8%. Both the
number of cell phone owners and internet users in Invercargill were above average and showing
a great number.

Coast to Coast as a Food truck business will rely it promotion heavily on social media because
the food truck business is not a static business like a conventional restaurant or café services.
Coast to Coast will utilize the internet, especially Facebook and Instagram, to communicate the
current location of the food truck to customers, updating customers with upcoming schedules and
doing business promotions by posting photos on social media. The high number of internet users
will make the business effectively promoted to customers and always make them well-informed
and easily get in touch with the venture.

2.14 Conclusion of the Literature

The literature review presents reliable data and statistics collected from various credible and
trusted sources. Although the coronavirus pandemic is happening at the time of writing, based on
the facts presented, the situation is expected to be improved in the coming years. Based on the
secondary research, it can be concluded that the Food truck business gained high enthusiasm
from the people in Invercargill, as evidenced by the success of the food truck event located at
Wachner Place, Invercargill. In addition, support from local councils also will greatly contribute
to the food truck’s operations. The success of the multi-cultural food festival also signifies that
the people of Invercargill are interested in trying new cuisine which also will be offered by Coast
to Coast. In addition, data on new businesses starting operation are higher than business ceasing
operation in Invercargill, which shows businesses could survive and continue to serve customers.
The lower unemployment rate also makes the purchasing power of the residents’ increase.
Moreover, data on internet users in the Invercargill area also shows a high number that makes

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centralized marketing on social media effective and well-targeted. To conclude, the various data
and facts presented in the literature review reinforce and confirming that starting a food truck
business is a good business opportunity.

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