Food delivery businesses seek streamlined regulatory regime

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A measure that aims to streamline the licensing process for New Jersey’s growing number of mobile dining businesses is gaining traction in Trenton. Under Assembly Bill 4339, the state would create a program within the Department of Health that would be responsible for regulating a relatively new business model in New Jersey: food delivery businesses with mobile kitchens.

While ice cream stands, hot dog carts and lunch wagons serving pre-made sandwiches are nothing new, gourmet food trucks that prepare food on-site present new safety challenges, such as access to hot water cooking and hand washing.

Currently, food and beverage delivery vehicle network companies face a time-consuming process that varies from municipality to municipality and typically involves several agencies at various levels of government. Faced with a complicated and often conflicting system of local rules, permits and inspections, the bill under consideration seeks to cut the red tape. If it is enacted, the permit and inspection process would be streamlined, ultimately making it easier for operators “to expand their services to other areas and create more employment opportunities in the state,” said Assemblywoman Michele Matsikoudis, R-21st District.

“Too often, businesses that provide good-paying jobs and contribute to our economy are spending too much time navigating various levels of bureaucracy,” said Matsikoudis, who is one of the bill’s co-sponsors. Creating a “statewide framework for application, approval and quality assurance” will “lessen the burden on these companies to navigate various local regulations and innovation, economic growth and create additional employment opportunities, all while ensuring proper enforcement of important food, health and safety standards,” Matsikoudis added.

“With differing regulations and processes in each of these towns, localized oversight is often difficult to navigate. Local departments of health are committed to safety, and so it is important for the state to play a role in creating a uniform system that allows business to thrive in the state while establishing common safety measures that meet localized standards across the board,” she said.

The measure was introduced in June and then referred to the Assembly Health Committee. The prime sponsor is Assemblyman Herb Conaway, D-7th District.

On Nov. 14, A4339 was reported out of the Assembly Health Committee and sent to the Assembly Appropriations Committee. A companion bill backed by Sen. Joseph Cryan, D-20th District, is still under review by the Senate Health, Human Services and Senior Citizens Committee.

Lawmakers have previously considered establishing uniform regulations to govern mobile vendors. In 2017, late Assemblyman Ronald Dancer sponsored a bill that would require the New Jersey Department of Health to establish statewide, standardized requirements for licensure and operation of mobile food vendors. But the effort never advanced.

Much has changed in the food industry since then.

Over the last two years, New Jersey, like most states, has seen a surge in food delivery services as the COVID-19 pandemic ushered in demand for convenience and safety. Though the food industry was already making moves to adapt to an increasingly tech-savvy consumer constituency, new app-based food delivery services like Wonder, a business that’s part food delivery, part mobile restaurant, and Scream Truck, an on-demand ice cream truck, flourished during the public health emergency.

“For restaurants that were not permitted to operate normally during the pandemic, takeout and delivery were lifesavers. It is important that we look at the needs of businesses and meet them where they are and get them to where they want to be. This is a great business model that is poised for growth in New Jersey with the right support,” Matsikoudis said.

Truckin’

Following a pilot period last year in Westfield, Wonder, an app-based service whose model includes chef-designed meals and a network of vans that cook up the food curbside, operates in more than 70 towns across New Jersey.

In 2021, Jet.com founder Marc Lore and former Walmart executive Scott Hilton teamed up to launch Wonder Group, which includes Wonder and Envoy, a meal courier platform. Since then, the company has grown to over 1,300 workers and plans to hire an additional 500 employees as part of an expansion.

Matsikoudis, whose district includes Wonder’s home base of Cranford, described the concept as “an innovative and rapidly growing business model,” but noted that it faced “many challenges at the local level of government that were not originally anticipated.”

She said, “One of my goals as an assemblywoman is to find ways to ensure that Trenton is working efficiently for residents and businesses alike and working across the aisle to get it done. I recently had the opportunity to tour the central kitchen of Wonder Mobile Restaurants … In speaking with their employees and administrative team, they noted the regulatory challenges their innovative business model faces, and highlighted A4339 as a commonsense solution originally introduced by Assemblyman Conaway and Assemblywoman [Shanique] Speight.”

“I was thrilled when I was presented with the opportunity to join them as a primary sponsor of the bill and know the benefits of streamlining the licensing process will be helpful to businesses across the board in the state,” the assemblywoman added.

In a statement, Stephanie Brown, associate director of government affairs at Wonder, said, “Wonder has always worked closely with local officials to ensure our unique delivery model follows all food, health and safety regulations. We’re excited to see the continued progress and legislative support of a bill that will streamline the approval process across government agencies. We’re especially grateful to the township officials in Westfield for working with us as we service of our innovative model.”

The bill currently under consideration by the state Legislature “would be an absolute game changer for our business,” said Eric Murphy, founder of Scream Truck.

“We currently spend countless hours managing our different license requirements and annual applications for each town we operate in. Every town has different requirements, and most don’t even have a license that applies to our business model. It is a very antiquated process and not applicable to today’s modern food trucks that deliver,” he said.

After developing the concept of an on-demand ice cream truck in late 2019, Scream Truck officially launched about a year later and is now operating in 25 towns in Morris, Essex, Somerset and Union counties.

“Our business model works by creating efficient routes in specific neighborhoods. We do that by notifying registered customers within a specific neighborhood when we’ll be visiting and then dynamically routing the truck to serve each customer that requests a stop. This allows us to serve the maximum number of customers in the shortest amount of time,” Murphy explained.

Murphy, whose background includes experiential marketing and events, described the venture as “a modern version of the ice cream truck,” blending technology, treats and tunes.

After customers register on Scream Truck’s website, they’ll be notified when the truck will be in the area. Then, they can text Scream Truck to request a visit along the route and also pre-order from the menu, which features everything from premium soft serve ice cream to sundaes and milkshakes.

According to Murphy, the company has around 10 trucks right now but aims to become a national brand with “at least 500 trucks” over the next eight to 10 years.