Thinking about starting your own coffee truck? In this blog post we guide you through the steps required start a profitable mobile coffee business from someone that’s already done it.
Our goal is to give you the real deal of what it’s like to operate this type of business (spoiler alert: you’ll need to be an early riser) on a daily business to help figure out if this really is the right business model for you.
Table of Contents
- Developing a Brand
- Daily Operations
- How much does it cost to start a coffee truck?
- How profitable is a coffee truck?
- Equipment checklist
- License requirements
Matt Drew’s story began not unlike other mobile food entrepreneurs I’ve interviewed in the past. Drew was employed as a marketer in a corporate setting and found himself less and less passionate about the work.
Drew also had a daughter on the way and started to question the point of putting in 12 – 16 hours per day for someone else, and ultimately wondered what his legacy would be if he continued down this path. So Drew made the decision to change the trajectory of his life in a big way by starting a coffee truck.
Growing up in the Pacific North West, Drew had a hard time finding a really good cup of specialty coffee in the Dallas area and started his education on how to bring a really great cup of coffee to Texas.
Related Reading: Why Do Coffee Shops Fail? 232 Owners Share Top Reasons
Drew reached out to Coffee del Ray in nearby Plano, Texas, offering to work for free in exchange to learn the business model. In exchange, Drew would share some of his marketing / branding expertise with the organization. And so began Drew’s journey toward owning the Mo’ Joe A Go-Go coffee truck.
Listen to the full podcast interview, you’ll learn how Drew created a one-of-a-kind brand for the Mo’ Joe A Go-Go coffee business. From sourcing of product to the equipment used on the truck everything is 100% unique.
Developing a Brand
The first step you need to take in starting a coffee truck business, before you even start thinking about the equipment, the size of cart to buy or the licenses you’ll need to operate is to take some serious time to consider the brand you want to grow.
Whether talking to specialty coffee shop or truck owners that have been successful this is the biggest piece of recurring advice that’s brought up again and again. You can grab a cup of coffee for less than a buck at a gas station. What’s going to differentiate you from everyone else in your market is the brand vision and mission statement.
We dive deep into the details of developing a unique coffee brand here. But here are some of the specific elements Drew utilized to make his coffee startup:
- Organic Products: Drew emphasized that everything sold on the mobile unit would be organic and sustainably grown whenever possible. This requirement applies to every detail of the business from the food to drinks to the dairy served. The tagline of the business even reflects this: The Freshest Coffee Sustainably Grown and Artfully Crafted.
- Responsibly Sourced and Fair Trade Beans: One regrettable aspect of the coffee industry as a whole is farmer’s are often located less developed countries have often made the least amount of money from their product. Drew has worked to ensure that the beans purchase with his business are through farms are Fair Trade, meaning they have responsible growing practices and are fairly compensated.
- A Unique Product: By As you can see from the examples above that by following these brand guidelines, it results in a product you can’t get anywhere else locally as a consumer. If you want a cup of coffee with an impactful story behind it there’s only one place to find it.
To have any type of successful food business, you need to be able to differentiate the core product in a meaningful way. By establishing the things that are most important to your business first can make this process easy.
Wondering what it’s like to operate a coffee truck truck on a regular basis? Here’s what you can expect based on the experience of Drew’s first 3-months in operations.
The mornings for Drew typically starts at 3 a.m. This has been a challenge because Drew has historically been a night owl. But in order to get the serving windows up between 6:00 – 6:30 a.m., it requires waking up a few hours early to prep for the day, driving to the vending location, and preparing for service.
Here’s what a typical day in the life of a coffee truck owner looks like:
It takes roughly an hour each day to complete prep work. This includes cleaning for the day, grinding coffee beans, getting drip coffee ready, placing breakfast items like muffins out. Much of this work is completed at a commissary before heading out on the road.
Travel to Vending Location
One of disadvantages of operating any type of food or beverage truck is that you need to commute to a different destination each day. Take the distance between your commissary and vending location into consideration before committing to it.
Commuting to and from your home base is a non-revenue generating activity. The farther you drive the more gasoline you use too. Try to keep one-way drive times under 30 minutes whenever possible as a best practice for saving time and money.
Running the Coffee Truck
As you might expect, morning is the busiest time for a coffee truck business. Coffee is a beverage most people enjoy after they wake up. As a result, you can expect more traffic before lunch as a general rule of thumb.
But Drew insists that you shouldn’t limit yourself to operating in the AM as a coffee truck. A rush of customers can happen at just about anytime depending on the location. As you get more familiar with your regular vending spots, you’ll start to get a sense of regular cadence between busy and slow times.
When you do get the opportunity for downtime, make sure to take advantage of it. Use these breaks as an opportunity to clean the truck, promote the business on social media, or follow up on catering opportunities.
As Drew stresses in the interview, every day operating a food truck is a little bit different. Be prepared for anything in the early days and recognize that you will be looking for ways to improve processes and operations overtime.
How Much Does It Cost to Start a Coffee Truck?
Expect to invest $30,000 minimum for a coffee truck that will pass your local health inspections, has quality equipment installed and is reliable. You could easily spend as much as $90,000 depending on the equipment you select and if the truck is brand new.
You might read something on blogs or forums of folks that have been able to get started for less and if you need to get started for under $15,000. It is possible by investing in a coffee cart that is lower cost. But keep in mind that you’ll still need a vehicle haul the unit that isn’t included in these costs. If you already own a truck this is a good option.
Related Reading: How to Start a Coffee Shop on Your Own Terms
The other thing you want to keep in mind is that the truck is literally the face of your brand. If the truck doesn’t look good on the outside, people will associate the appearance with the quality of your coffee too. You’ll want a vehicle that looks good to give yourself the best chance of success. Going for the
Keep in mind that the figures mentioned above are broad estimates. Determining the the average cost of a coffee truck is always difficult to answer because it’s a variable cost that will depend on the size, year, equipment installed (this is a big one), business licenses in your area, if you’ll be operating a truck or trailer, and who is building it.
This is a lot like asking someone the average price of a car. The price of a car will depend on the model, age, mileage, and other factors.
How Profitable is a Coffee Truck?
Based on our survey of 223 full-time food truck owners, over 50% report generating at least $150,000 in revenue per year. Coffee truck owners can expect to see similar revenues if you operate the business full-time and establishing name recognition locally.
Keep in mind that this survey was conducted with owners that have been in operation at least 2 years. You should not expect similar sales numbers during your first year in business.
Overall, coffee is a high-profit margin business. A cup of coffee that costs you less than .50 cents to produce can be sold at retail for $2.00 – $3.00 a cup on average.
You can start to estimate your break even numbers for the business as a whole by determining the cost of your coffee, how many sales you anticipate, and the profit margin of each customer. We always advise putting together a formal business plan to come up with a basic sales forecast.
As a general rule of thumb, you’ll want to shoot for over $100,000 in sales per year as a full-time owner operator. This will ensure you’re able to pay for licenses, the truck, insurance, inventory and other expenses for the business.
Coffee Truck Equipment Checklist
This is a checklist of basic equipment installed on a coffee truck.
- Espresso Machine: An espresso machine will be the most expensive single piece of equipment you install on a truck. Expect to pay between $2,000 – $10,000 depending on the model and if you anticipate buying new or used. The UNIC Stella Di Cafe is the exact model of espresso machine used by Drew. This is a high-end Espresso machine from Italy.
- Drip Coffee Maker: A significant percentage of your clientele will want a regular drip coffee. A commercial drip coffee maker will run you around $1,500 – $2,000. But you could invest even more if you want top of the line equipment.
- Grinder: This is required for grinding coffee beans on a daily basis for the freshest tasting coffee. The ballpark cost for a commercial grade grinder is $500 – $1,000.
- Commercial Refrigerator: You need this to keep milk, cream, and other products cool. Expect to shell out $2,000 – $5,000 for something reliable.
- 3-Compartment Sink: This is a standard requirement anywhere you operate in the United States. This is needed to washing dishes, spoons, and other cutlery.
- Plumbing and Water Tanks: You need these to store clean and grey water. This is roughly $2,000 – $3,000 for equipment and installation by a processional. Unless you’re extremely handy, this is not a project you want to take on yourself.
- Generator: If you plan to operate a coffee truck, don’t cut corners on this piece of equipment. As a coffee truck, you’ll have higher electrical requirements than most food trucks. Espresso machines, drip coffee makers, and blenders all require a lot of energy. You don’t want to lose power when you have a big rush and all your equipment is running. Around $3,000 – $7,000 should be invested on a quiet running generator that won’t scare off customers.
- Initial Inventory: Don’t forget about a the little things you need to start a coffee truck. Paper cups, stir straws, lids, napkins, sugar packets, coffee beans, cleaning supplies, a plastic garbage can and other necessities add up quickly. It’s essential that you take the time to itemize every little thing you end need to purchase for the truck. As a rough estimate, expect to pay $2,000 for inventory.
These are the basic components of a coffee truck, but keep in mind that your vision may require additional equipment. Do you plan to serve breakfast sandwiches? Consider a commercial panini maker. Smoothies is another popular option on coffee trucks. In that case you’ll need at least one blend installed.
Take the time to figure out what you plan to serve on the truck and then work backward to determine equipment needs.
Pro Tip: Drew recommends investing in quality equipment versus the lowest priced because it’s the heartbeat of your business. You don’t want to be dealing with repairs, replacements, and a lower quality product.
The permits and license requirements of a coffee truck are different across each city and state in the United States. The bottom line is you will need to figure out the legal requirements to operate the coffee business in your specific area.
That being said these are the standard licenses and permits in most areas:
- Health Permit: This permit allows you to sell food or beverages to the public. Contact the county health department website you plan to operate for more information on what you’ll need to acquire this essential license.
- Fire Department: The local fire department will check your HVAC system and fire extinguishers to ensure you meet their requirements.
- Business license: Establishing a formal business entity whether that’s a sole proprietorship, LLC, partnership or corporation is required in the United States.
- Vehicle license: Whether you own a trailer or truck, you’ll need a license within the state you plan to operate just like any other vehicle on the road.
- Food Handlers permit: Many cities and counties require that you take a class and pass a test for handling food. This permit is often required for a coffee truck even if you don’t plan to cook any food on the unit.
- Special event or temporary permit: If you plan to vend at special events like concerts, you will need to work with the event planner to identify what’s needed and the costs.
Quotes from the Show
You want to be able to say, “We’re doing something that nobody else is doing. We’ve got something that nobody else has and this is the only place you’re going to be able to find it.” Because if you can’t say that there’s really nothing compelling to be able to talk about with your brand. – Matt Drew on the importance of branding for mobile food owners.
My mornings typically start at about 3 a.m…. and that sucks. – Matt Drew on owning / operating a coffee truck.
What You’ll Learn
- An overview of what it takes to start a coffee truck
- Why finding unique beans and coffees that are unique to your area can be an important branding component
- The reasoning behind Drew’s focus on sustainably grown coffees and no GMO products to maintain brand consistency
- Why fair trade is so important in the coffee industry.
- An introduction to sourcing specialty coffee growers. Really interesting stuff.
- How identifying these specialty growers and establishing relationships can give you a unique marketing advantage over other coffee shops in the area
- Learn about the less consistent rush periods for a coffee truck versus a food truck.
- The difficulty of establishing a local presence without a strong brand
- Some of the equipment needed to start a coffee truck, including an espresso machine (in case you’re a coffee geek Drew uses a UNIC Stella Di Cafe) and drip coffee maker.
- Why a low price point shouldn’t the the main reason for you selecting a piece of equipment for your truck.
- The importance of being flexible when you launch a mobile food business. Don’t let it derail you. Don’t let it get you down.
Resources in the Episode
UNIC Stella Di Cafe – The model of espresso machine used by Mo’ Joe A Go-Go.
Gusto – Payroll software that’s ideal for small businesses like coffee shops and trucks. They also sponsored this episode.
Heifer International – An organization that fights hunger worldwide by purchasing and donating animals to impoverished communities around the world and providing farming training. This is one of the organization that Drew actively supports and partners with.
Coffee del Rey – This is where Drew got his education in the coffee business. Coffee del Rey is a for profit organization that supports a variety of charities. The concept of using of business funds to help support philanthropic efforts is something that appealed to Drew.
Ultimate Food Truck Case Study – Want to start your own food truck? Check out this case study to learn what the process is like.
57 Global Coffee Industry and Consumption Trends – Learn more about the market opportunity in the coffee industry.