The street taco industry – until now a thriving fleet of trucks serving up traditional favorites to anyone with a couple bucks to spare – is facing its greatest-ever threat.
A threat that has already wiped out an estimated 75% of food trucks in the densely-served LA area, with ripples spreading all over California and the broader country.
And unfortunately – there’s no reason to think things are going to get better anytime soon. Here’s why:
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The street taco industry is being hit by multiple issues pretty much simultaneously:
– ICE raids (which hits both supply and demand – more on this shortly)
– Rising fuel costs – a direct result of the Israel-Iran conflict
– Rising avocado prices (not impacted by tariffs yet, but they would certainly make things worse)
…in addition to your standard issues of burdensome regulations, intensifying competition from sit-down restaurants, and more.
First let’s talk about the most urgent issues:
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It’s no secret that ICE raids have intensified in the last few months, especially in California.
We’ve seen a spike in beef prices after ICE hit a meatpacker in Nebraska…
Critical vulnerabilities in the US milk supply highlighted by ICE raids in Vermont and New Mexico…
And lots of bigger “ripple effects” throughout the broader economy.
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I don’t want to paint with too broad a brush here, but it’s probably no surprise that many of the street taco industry’s workers and customers are immigrants to the United States or are descended from immigrants.
ICE raids capture thousands of people…but they impact many times that number.
Very simply, the fear of getting swept up causes people to change their routines. We’ve seen as much as 75% absenteeism from work after an ICE raid because people are afraid of getting caught in the “next” raid.
Which of course means…
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Workers stop showing up to work at food trucks…
And people also stop visiting the same food trucks – for fear that ICE will be waiting.
That’s a huge impact on business, and on its own it would be enormously disruptive.
Unfortunately, it gets worse.
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Gas prices in California have spiked in response to Middle Eastern geopolitical tensions…and are now over $6 a gallon.
This has a direct impact on the bottom line for taco trucks, who burn tons of gas as they’re driving around…setting up shop…and frying tortillas.
California’s gas prices were already some of the highest in the nation, and now they’ve spiked quite a bit higher.
To say nothing of…
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Avocado supply is low, with a 26% drop in shipments from Mexico’s key growing regions roughly doubling wholesale prices (a box of avocados has cost as much as $90 in the last six months, usually more than $60, and rarely dipping down to the typical pricing of closer to $30).
This isn’t an issue of tariffs, it’s just supply constraints due weather patterns and a weak harvest.
Of course…
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A proposed 25% tariff on Mexican imports would, of course, make an already tough situation impossible.
Studies indicate it would bump prices on individual avocados from around $2.99 today to $3.73 – indicating that retailers would pass the tariff cost on to consumers in its entirety.
This is all, of course, a total killer for taco truck margins.
“But wait,” you could reasonably say, “couldn’t they just raise prices too?”
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It’s a reasonable idea, and in many markets it would work.
But the whole point of street tacos is – they’re cheap.
Think about the clientele, which includes lots of people working in various trades. These are folks who are looking for good food that’s fast and cheap.
You can’t double prices on them without losing a ton of customers. Not great.
And of course, to add to all of these new issues…
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It’s tough to operate a food truck under the best of circumstances.
Cities have lots of confusing regulations and burdensome overhead and red tape for food trucks to get through – because city codes are primarily designed for restaurants in buildings.
So there’s a lot for any food truck to navigate…even when nothing is going wrong!
And of course, there’s the issue of competition.
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Food trucks are competing with each other and both fast food and fast-casual restaurants…and that competition is incredibly fierce.
You can get a pretty good taco or burrito from Chipotle, Qdoba, Taco Bell, and all kinds of smaller local and regional chains.
Why pick a food truck?
Of course, there’s convenience (if they’re, you know, right there)…price…and, depending on the food truck, quality.
But that’s a lot of pressure, to be sure.
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The street taco industry has been struggling against a lot of these longer-term pressures for years…
But the confluence of spiking input costs (especially fuel and avocados) and immigration raids has been a one-two-three punch that has caused many owners to throw in the towel and say “I’m done.”
Which is a shame. It’s great food.
And even more than that…
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These are people’s lives.
Their dreams, their money, their work – often gone with little or no notice.
I hope this next chapter is kinder to them – because they deserve it.
What are you doing to support your local food trucks?
Share your best ideas in the comments!
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