#10 : How Algorithm Restaurants Food Truck is Driving Philly to Go Vegan
Welcome to "Season 2" of Plant Basting Talks, where we interview entrepreneurs in the vegan-friendly space about their story, what they’ve learned thus far, their business model, and how they measure their business's health. Learn the trends and strategies local businesses are using to grow.
In this interview about the all-vegan food truck, owner Matthew Rafferty explains:
- What driving factors were behind the idea to start an all-vegan food truck
- Various obstacles inherent to having a mobile food business
- Why interactions with customers have made this challenging experience extremely rewarding
- The reach and impact of steady price increases he's witnessed since starting in September of 2020
1. What influenced you to start Algorithm Restaurants?
The rights of non-human animals. And also by the exponential rise of factory farming, and their integration into the global food systems.
2. What were the critical steps you took to get the business started?
Set up a framework for the legal & financial aspects of the operation. Work to secure funding, if need be. Seek to source a RELIABLE truck - don’t get enamored by a shiny kitchen, the condition of the truck and drivetrain is critical. I went with a Freightliner Utilimaster MT45 that was a medical equipment truck; and got a pre-purchase inspection done before any work on kitchen buildout began.
Once that was good, and kitchen design was done, I signed the contract for the kitchen builder and then dropped off the truck for work. That is a very succinct, simplified path but it’s packed with curveballs, and everyone is looking to profit off you.
3. How did you get your first customers?
The first people we served were via two friends & family events; i.e. a soft opening. It was humbling, and heartwarming. Little chaotic operationally, granted! But incredibly rewarding. I have the pics from these things all saved.
Then we officially launched on September 1st, 2020 in University City, and solely relied on foot traffic. Which in the midst of lockdown, brings a lot of uncertainty and fear. But we start with a vision on how to solve problems. So we tried to broadcast the food & beverage via social media, and also promote our partners in the programs.
4. How have you continued to grow your customer base?
We can always create more opportunities to serve, but we try to treat guests well, and remain consistent with the food. First and foremost though, the contributions of Cody Ballard, the Executive Chef, have been the foundation for everything positive that’s been served out of the truck. Out of a 128 square foot kitchen, inclusive of equipment & people, he’s pushed the envelope to improve wherever possible.
In addition to an already kickass fast casual a la carte menu, the monthly specials have grown to be unreal. The Garden Dog, The Cubano, The Heirloom Tomato, The BBQ Sweet Potato, The Orange Cauliflower, et cetera. We’ve had seriously magical interactions with guests and it’s all rooted in his efforts and care. Currently, people share some incredible photos of their meals, and we highlight them in our posts. Our social media content is almost all driven by the experience of our guests. How absolutely rewarding this has been, I don’t know if people realize the positive impact it has on us. So we strive to reciprocate that energy.
5. What is Algorithm’s business model?
Create badass vegan food, using whatever local producers we can, and have a good rotation to serve as many areas of Philly as possible. Once those goals are generally achieved, we also strive to support local animal rescues / farm sanctuaries, and also maintain a recovery-friendly workplace.
6. How did you choose the first place you parked and how do you continue to pick locations?
Lots of trial and error! We originally chose Clark Park, as there's an opportunity to park safely, and be aligned with the amazing vendors there during the Farmer’s Market. So that was one of the firsts and is still our homebase on Saturdays. It’s sentimental for me, we’ve supported each other since the start.
From there, we listen to requests and recommendations of guests / friends. So we seek areas where there is ample space for safe & legitimate parking; where there is a demand for our food; and where there are good partners. We generally do regular street vending by day, then usually partner with some of the badass breweries for dinner. And by now, we have OpenMaps bookmarked lol.
7. How do you manage and track the financial health of Algorithm?
I will say it is not easy, and the profit margins on restaurant operations, especially with a single food truck, aren’t large. So we have to innovate - working for retail placement, wholesale, catering & events, et cetera. In tandem, we have to push and seek to keep operations stable as we do. Otherwise we fall short, especially with external forces (pandemic, winter, etc). We have goals to keep flowing smoothly and be positioned decently for any growth- which is tough, and there’s no outside investors, it’s all grass roots.
One of the biggest aggravating factors, albeit necessary for the safety and well-being of some, has been the exponential rise of third party deliveries. So we have to work even harder to mitigate the money it costs us to use them, in addition to every other operating expense. The root issue here is that we’ve normalized, through service fees, delivery fees, and taxes to them, that a single $11.95 sandwich becomes $18.30 to the guest. That’s a 1.5 time increase; and also requires a large payout from the restaurant, to the delivery platform. At the lowest point, we pay 10%. At the highest, we pay 30%. So for that $11.95 burger, the guest pays $18.30 total, before any tip. And if the commission to the delivery service is 30%, the restaurant gets $8.37. If we take that one step further and if the guest is paying that 1.5x amount, it can decrease their ability to dine more frequently, or support more local businesses, in some instances. But it’s where we’re at.
With that said there are some people working hard to challenge such business models- Live Better, Inc best exemplifies some true forward movement here - but we have to unlearn certain platforms that we’ve been led to rely on. That’s how we all grow.
8. How did you decide on pricing of your menu? Have rising prices or shortages of supplies affected Algorithm Restaurants?
We have categories - coffee, natural sodas, signatures, tacos, sides, and sweets. Each of them is programmed to work with the other, it’s a balance and we run theoreticals to see the actual impacts they have. We have certain margins by category we need to hit to make it all run.
But we always want to provide great value. I always want to provide a great value, even though serious increases in commodities almost demand pricing to continuously increase to stay afloat. Fry oil used to be $18/case, then at one point it hit $48 this past year. And that’s aside from packaging (we use compostable boxes and agave straws, not foam containers and plastic straws), proteins (our bacon is not cheap but integrity matters), rise in propane / unleaded gas / diesel (40%+ YOY), the list goes on. QuickBooks just rises and rises.
Through it all, we (perhaps to a fault) really do work to keep the menu pricing manageable, keep service delicious and filling meals, and provide a good value. Hopefully that energy comes through.
9. Why is it important to you that your business promotes veganism?
It’s the reason this exists. That is THE most important aspect, to provide great food in a compassionate manner. We don’t have to use non-human animals to make a great meal.
Additionally, it feeds into the community with the producers we use (Càphê Roasters , Merzbacher’s, Baker Street Bread Co , Blackbird, Giordano’s , et cetera), and it supports efforts in recovery.
The landscape of food has changed - and there are way more options now to help us create, without flesh. On Instagram, for example, we follow whatever vegan businesses we come across. So we discover what new products people are rolling out, and that inspiration helps us seek out cool stuff.
10. What are the biggest challenges you’ve faced and obstacles you’ve overcome throughout this process?
Financial insecurity. Equipment failure. Balancing revenue / sales with infrastructure. Surge in pricing with commodities. Being a food truck on third party delivery platforms. The list goes on, and on. I’m sure the team we have would add on lol.
It’s had challenges and continues to, for sure. But personally, just try to be a little more patient, a little more receptive to feedback / suggestions with the great team, and stay the course. Have faith, and trust the process.
11. Have you found anything (resource, book, skill, habit, or bit of knowledge) that’s been valuable or useful for your entrepreneurial journey?
I can only speak for what my experience has been with this, what has been valuable for me might not apply to others. With that said I try to keep focus on work, well being of pets, and bookending the day with some reading and / or meditation.
12. How do you tend to your mental health as a business owner?
Some might say I could do more for my mental health haha. I do work a program of recovery.
13. Any advice for entrepreneurs just starting out in the vegan-friendly space?
Trust your instincts. Keep a clear vision. Keep expenses to mission critical
checkboxes at first, then keep that approach as you pivot toward revenue generating expenses.
And most important, use people that have some experience! You don’t need to go it alone. Get out of your head, talk, ask for help. It's a community, not a competition..
14. Where can we go to learn more about you and Algorithm Restaurants?
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