List and briefly describe the advantages and disadvantages inherent to the food truck business model as compared to traditional restaurants. 

2a. On a typical day in Kamloops, how many “Ripped Pig” sandwiches must be sold in order to break even? 

2b. Comment on Cat and Joe’s breakeven point (calculated in Part a). Should this number be relevant to the entrepreneurs? 

2c. If Cat and Joe wish to make a $100,000 profit for the year (after tax), how many pulled pork sandwiches must the Pig Rig sell each day? Assume all days are in Kamloops at regular prices. 

3. Prepare a contribution-format income statement for one day’s business at the Pig Rig based on optimistic, realistic, and pessimistic projections for a regular, nonevent day in Kamloops. 

4. Prepare a contribution-format income statement for the Bullarama event based on an optimistic projection (no onsite competitors), a conservative projection (one onsite competitor), and a pessimistic projection (two onsite competitors). 

5. What are the nonfinancial advantages and disadvantages of attending Bullarama? 

6. Assume Cat and Joe were told that they should expect one onsite competitor. Would you recommend they stay in Kamloops for the day or go to Bullarama? Justify your answer with both financial and nonfinancial data. 

INTRODUCTION

When the invitation arrived, Joe Thompson and Cathy (Cat)

Obertowitch were not sure what to do. The event looked

promising, but the last time they agreed to attend a similar

special event, they had barely broke even. They had left the

event reminding themselves, “We don’t need to say ‘yes’ to

every opportunity.”

Joe and Cat were an engaged couple who had been

running their food truck, Cat & Joe’s Pig Rig, for several

months. Their truck specialized in pulled pork and southern-

style barbecue. “Slow and low1” was the cooking philosophy

of the food truck, which was based in Kamloops, British

Columbia, Canada, a city of 100,000. Business had been

brisk, the truck was outperforming projections, and their

customer base was growing. They had also supplemented

their day-to-day business by attending local events and doing

catering jobs.

The couple had just received a request to bring their

truck to an event called “Bullarama”—a rodeo held in the

nearby town of Barriere, located 70 kilometers north of

Kamloops (Exhibit 1). Bullarama looked great on paper:

the promoters noted that 700 attendees were expected, Cat

& Joe’s Pig Rig would be the only food option, and rodeo

fans would be a great market for the company’s southern-

style barbecue. Tempering their enthusiasm for the event

were a few mitigating factors: (1) event promoters tended

to be optimistic with promises and projections, (2) the

70-kilometer drive to Barriere added a number of costs

that may be significant, and (3) perhaps most importantly,

business was good in Kamloops, and if they did the

Bullarama event, they would forgo one day’s revenues in

their home market. The couple couldn’t be sure of what to

do until they fully analyzed the opportunity.

CAT AND JOE

Cat and Joe came from the neighbouring towns of Smithers

and Houston in northern British Columbia. They knew each

other growing up but never connected beyond the level of

acquaintances. Cat recalled their relationship as teens: “I was

interested in Joe, and Joe was interested in hockey.” The

two lost touch, married other people, and started their own

families. Cat had one daughter and two sons, while Joe had

two sons of his own.

Cat went to school for nursing and referred to her career

as that of a “gypsy nurse” working for a wide variety of

organizations. Her most recent jobs included a role at a

pregnancy outreach center and an instructional post in the

nursing program at the local university in Kamloops. Joe’s

career had been more stable. After a short time as a cook in a

restaurant, he found a permanent career behind the wheel of a

logging truck, first in northern British Columbia then moving

to the city of Merritt, 100 kilometers south of Kamloops.

Cat and Joe’s marriages dissolved. Eventually, the newly

single acquaintances reconnected on Facebook when the

social media site suggested that they might know each other.

The two began dating, and on one of their earliest dates, Joe

cooked for Cat. On that night, Joe’s pulled pork sandwich

proved to be his way into Cat’s heart. She was surprised to

IMA EDUCATIONAL CASE JOURNAL VOL. 7 , NO. 3 , ART. 3 , SEPTEMBER 20141

ISSN 1940-204X

Cat & Joe’s Pig Rig: Should We Stay or Should We Go?

Tony Bell

Thompson Rivers University

Andrew Fergus

Thompson Rivers University

learn that one of Joe’s hobbies was smoking meat. After high

school, as soon as Joe could afford a smoker, he bought one,

and in the two decades since, he had become an expert in

the art of smoking and slow-cooking beef and pork. He also

enjoyed making his own rubs and sauces.

As their relationship became more serious, Joe moved

from Merritt to Kamloops to live with Cat. Joe’s workplace

was still based an hour away in Merritt, leaving him little

time for family after the commute and his long days driving

the logging truck. Neither Joe nor Cat was happy with this

arrangement, with Joe spending a lot more time on the road

than at home. Something had to give, so Joe began to look

for new opportunities closer to Kamloops.

It was at a potluck dinner that Cat and Joe got the

inspiration for their business. Joe brought a dish from his

smoker, and it was a hit. Two of their friends who attended

the party, Cye Delaney and Denise Leigh, were owner-

operators of a popular local tattoo parlour. These experienced

entrepreneurs suggested that Joe’s pork was so good that he

and Cat had a legitimate business opportunity. They agreed

to give Cat and Joe advice if needed and put the couple in

touch with an angel investor.

When it came time to meet the potential investor, both

Cat and Joe were nervous. They wanted the opportunity

badly, but it was one thing to impress friends at a potluck

and another thing entirely to impress a stranger—and to

impress him so much that he would be willing to invest

tens of thousands of dollars in a business concept proposed

by two inexperienced entrepreneurs. Joe and Cat brought

the possible investor a sample of the items they planned

to include on the menu, and perhaps more importantly,

they also brought a conservative, but thorough, business

plan. The angel investor was so excited by the food and the

business plan that he wrote them a check on the spot. With

that meeting, Cat & Joe’s Pig Rig was born.

FOOD TRUCKS

During this time, food trucks were an emerging culinary trend

in Canada and around the world. While mobile concessions

and canteens had existed for decades, there was a new wave

of food trucks, which focused on bringing higher-end fare to

the marketplace. The old model for food trucks often involved

selling frozen or nonperishable products, whereas the new

model relied on technological improvements to miniaturize

and mobilize full, gourmet kitchens, enabling vendors to offer

a much broader array of dishes.

As of 2014, Vancouver, British Columbia, had more than

100 active food trucks selling all types of dishes, including

Indian, Korean, Japanese, seafood, Mexican, barbecue,

crepes, Ukrainian, and more.2

Cat and Joe’s pulled pork concept would be the first food

truck attempted in the city of Kamloops. After meeting with

local politicians and agreeing to some limitations3, Cat &

Joe’s Pig Rig was given the city’s blessing to begin operating.

They purchased and outfitted their truck and opened for

business (Exhibit 2).

THE BUSINESS

Cat & Joe’s Pig Rig saw immediate success. In the early

months, the business outperformed its revenue and profit

projections. But Cat and Joe did not wish to rest on their

laurels. They knew that they were enjoying early success not

only because they offered a good product but also because

the food truck was a novelty in Kamloops. They were

pleased to have a first-mover advantage, but they knew it

would not last forever. They needed to continue to develop

a loyal customer base and were also working hard to expand

the event and private catering side of their business.

The food truck’s signature dish was its “Ripped Pig”

pulled pork sandwich.4 The sandwich came in a combo with

coleslaw, baked beans, and French fries and was priced at

$12. The company had variable costs, which included the

cost of the food, clamshell packaging, and variable overhead.

Variable costs were 40% of the company’s revenues. There

was no labor cost as neither Joe nor Cat drew a wage or salary.

Fixed costs included items such as gas for the generator,

maintenance, business licenses, and truck depreciation.

These costs totaled $10,000 per year. The operational year

for the food druck was 180 days. Corporate income tax rates

for small businesses in British Columbia were approximately

20% around that time.

The pork needed to be put in the smoker at least 12

hours in advance of service, which created two challenges for

Joe. First, it meant that he worked virtually 24 hours a day.

Operating the truck meant setting up, serving, and cleaning

up from 10 a.m. to 7 p.m. But when service was over, Joe’s day

was not done. He needed to smoke the pork overnight—which

involved putting the pork in the smoker late in the evening

(with just the right blend of wood chips), and waking up to tend

to the meat in two-hour intervals throughout the night, spraying

the meat to ensure it would have the right consistency and

tender quality when it was served the next day. Although it was

exhausting work, Joe was willing; he had a great work ethic, he

was his own boss, and smoking meat was one of his passions.

IMA EDUCATIONAL CASE JOURNAL VOL. 7 , NO. 3 , ART. 3 , SEPTEMBER 20142

The second challenge presented by the 12-hour cooking

requirement was determining how much pork to smoke—too

much or too little could be a disaster. If Joe did not prepare

enough meat the night before, he could not simply go out

and buy more if they were having an unusually busy day.

Failure to project high demand meant the Pig Rig would be

sold out for the day, and Joe and Cat would need to close the

truck early, leaving customers unsatisfied. If Joe prepared too

much meat, and they didn’t sell out, the extra meat would be

donated to a local soup kitchen. While Cat and Joe felt good

about doing something generous in their community, donating

pork meant inefficiency and significantly reduced their profits.

Forecasting poorly was a huge risk for their business,

and mistakes were costly. Fortunately, experience meant

that Cat and Joe were getting better at predicting how many

customers they could expect in a day. On a typical day, Cat

and Joe served between 75 and 125 patrons, with an average

of 100. The amount varied based on the weather, the day of

the week, and other factors such as nearby local events. Joe

also had a formula for when the truck was invited to special

events: He expected 35% of attendees would purchase food,

not necessarily from him, but from one of the food vendors

at the event. He would use this ratio to estimate the number

of potential customers. He would then divide his estimate

for potential customers by the number of vendors serving

the event. If he was the only vendor, he would get all of the

potential customers, if there were two vendors, he expected

to get 50% of the food-buying customers. This number

would serve as his guideline for how many pounds of meat

he would need to smoke the night before. It had proven to

be accurate in the past, and Joe intended to use this formula

for any special events going in the future.

A crucial aspect of the company’s success was its

marketing strategy, which focused on social media. Because

their food truck changed locations frequently, Cat and Joe

wanted to ensure that customers knew where to find them,

and the best way to do this was online. They were very

active on Facebook, Instagram, and Twitter5 and, as of 2014,

had not spent any money on traditional marketing. They had

the largest social media presence of any restaurant or food

truck in Kamloops. And it was through social media that the

organizers of Bullarama contacted Cat and Joe.

THE BULLARAMA DILEMMA

The invitation was succinct. It explained that Cat & Joe’s

Pig Rig would be welcomed at Bullarama in Barriere,

British Columbia. Bullarama was a charity rodeo event,

where novice, junior, senior, and professional riders would

compete. A handicapping system would be used to ensure all

riders could expect competitive scores. According to event

organizers, 700 tickets had been sold.

When Joe and Cat brought their truck to special events

they did not serve their usual pulled pork sandwich combo.

They served only the sandwich, with no beans, coleslaw, or

French fries. This enabled them to serve customers much

more quickly and to reduce their price to $9 per serving. It

also let them replace their expensive clamshell packaging with

a much cheaper foil wrapping. With fewer side dishes and

less expensive packaging, variable costs would be reduced by

$1.90 per customer when compared to their normal menu.

There were several other cost considerations related to

the Bullarama event. First, the event organizers suggested a

donation of $100.6 Second, their food truck ran on propane,

and the 140 kilometer round trip to Barriere would add $100

to their typical fuel costs. Finally, in order to maximize space

for the mobile cooking equipment, the truck only had one

seat (for the driver), so if Joe drove the food truck, Cat would

need to drive her car separately, with an expected extra gas

cost of $30. All of these costs would be avoided if they stayed

home in Kamloops.

The couple had one other concern. The organizers

promised that Cat & Joe’s Pig Rig would be the only food

option available to event attendees, but the entrepreneurs had

heard such promises before and found they were not always

reliable. While they trusted the event organizers, they were

worried about the potential for other onsite competitors. They

planned to do calculations for multiple scenarios.

The couple reminded themselves that business was good

in Kamloops, but this represented an opportunity to expose

their product to a new, potentially lucrative market. As Joe

opened the calculator app on his smartphone, he reminded

himself that numbers were important, but this decision

would not be based on numbers alone. There were a lot of

other factors to consider.

IMA EDUCATIONAL CASE JOURNAL VOL. 7 , NO. 3 , ART. 3 , SEPTEMBER 20143

ASSIGNMENT

1. List and briefly describe the advantages and

disadvantages inherent to the food truck business model

as compared to traditional restaurants.

2a. On a typical day in Kamloops, how many “Ripped Pig”

sandwiches must be sold in order to break even?

2b. Comment on Cat and Joe’s breakeven point (calculated

in Part a). Should this number be relevant to the

entrepreneurs?

2c. If Cat and Joe wish to make a $100,000 profit for the year

(after tax), how many pulled pork sandwiches must the

Pig Rig sell each day? Assume all days are in Kamloops at

regular prices.

3. Prepare a contribution-format income statement for

one day’s business at the Pig Rig based on optimistic,

realistic, and pessimistic projections for a regular, non-

event day in Kamloops.

4. Prepare a contribution-format income statement for the

Bullarama event based on an optimistic projection (no onsite

competitors), a conservative projection (one onsite competitor),

and a pessimistic projection (two onsite competitors).

5. What are the nonfinancial advantages and disadvantages

of attending Bullarama?

6. Assume Cat and Joe were told that they should expect

one onsite competitor. Would you recommend they stay

in Kamloops for the day or go to Bullarama? Justify your

answer with both financial and nonfinancial data.

ENDNOTES

1 Slow and low is a cooking style synonymous with southern-

style barbecue. It refers to the fact that meat is cooked

slowly at a low temperature to achieve an extremely tender

texture.
2 A full list of active food trucks in Vancouver can be found at

http://vancouver.ca/people-programs/street-food-vending.

aspx.
3 Limitations included meeting all health-code standards that

apply to restaurants and adhering to operating boundaries

to prevent the food truck from poaching customers from

established restaurants.
4 Although there were other items on the menu, they

had very similar prices and costs (margins were virtually

identical). For the purposes of calculations in this case,

assume there was only one item on the menu: the Ripped

Pig sandwich.
5 Cat & Joe’s Pig Rig had more than 1,700 “Likes” on

Facebook, more than 600 Twitter followers, and nearly 200

followers on Instagram.
6 It was not unusual for charity events to request its vendors

to make a donation, and although the donation was

“suggested,” it was realistically a requirement if Cat and Joe

wished to attend the event.

IMA EDUCATIONAL CASE JOURNAL VOL. 7 , NO. 3 , ART. 3 , SEPTEMBER 20144

ABOUT IMA® (Institute of Management Accountants)
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IMA EDUCATIONAL CASE JOURNAL VOL. 7 , NO. 3 , ART. 3 , SEPTEMBER 20145

Exhibit 1. British Columbia Map

Note: This image was used under Creative Commons Attribution-Share Alike 3.0 licensing. The original image has been adapted to include
the six labeled locations. The original image and licensing information can be found at http://en.wikipedia.org/wiki/Rogers_Pass_(British_
Columbia)#mediaviewer/File:Canada_British_Columbia_location_map_2.svg.

IMA EDUCATIONAL CASE JOURNAL VOL. 7 , NO. 3 , ART. 3 , SEPTEMBER 20146

Exhibit 2. Cat & Joe’s Pig Rig
Front and Reverse View of the Food Truck