Rastelli Foods Group is going Global
Steve’s breakdown: This is a tale of two types of accounts. ByoB and straight to consumers. Lauren Rastelli DeMarco is the 27 year old daughter heading up marketing. We suspect she’ll be open to ideas.
SWEDESBORO, NJ:In the language of its business,
Rastelli Foods Group‘s evolution is akin to going from ground chuck to kobe strip steaks, from bacon to Iberico ham.
Rastelli’s is a 40-year story of improvisation and capitalizing on opportunity – and proof that foreign trade is accessible even to a couple of New Jersey brothers who reached adulthood without ever having been on an airplane.
What began as a butcher shop in Deptford in 1976, founded by an 18-year-old who needed to quickly find a means to support his wife and a child on the way, is now an international conglomerate of 825 employees and more than $500 million in annual revenue.
Its portfolio includes:
A 110,000-square-foot meat and seafood production and distribution facility in Swedesboro, Gloucester County, that serves many grocery stores and restaurants and a growing e-commerce market, thanks largely to QVC and the Internet, with such household name brands as Bobby Chez Crab Cakes and Bubba’s Q De-boned Baby Back Rib Steak.
A retail division whose showpiece is Rastelli Market Fresh in Marlton, a hybrid-model grocery/foods-made-to-order store and cafe/catering service doing $500,000 a week in sales. Ray Jr. and Tony Rastelli opened it in July 2014 to serve time-starved middle- and upper-class professionals and families. Their plan now is to open others where sites and demographics make sense.
Rastelli Global, serving countries around the world as a consolidator of food and beverage products, national brands, and restaurant supplies for seemingly every major chain with operations abroad, including TGI Fridays, Applebee’s, Cinnabon, Saladworks, Pizza Hut, Dairy Queen, Olive Garden, and Ruby Tuesday.
Rastelli Foods’ path forward – one that will be forged in part by the twenty- and thirtysomething children of Ray and Tony, who are now in key positions – will proceed with an eye to the past, its leaders say.
“Never forgetting where we came from is what gets us to where we are going,” said president Ray Rastelli Jr., 58, of Mullica Hill. “The foundation of our business is still built on that butcher shop from 40 years ago.”
Ray Jr. opened that store, the Meat Stop, on Oct. 26, 1976, in a former pizza shop in Deptford’s Oak Valley, the predominantly Italian neighborhood where the Rastelli brothers grew up.
Although he was the son of another Ray in the food business – Ray Rastelli Sr., who started as an entry-level employee at Blue Bird Foods, a Philadelphia pork products manufacturer, and retired as president in the 1980s – Ray Jr. knew little about meat cutting. He just knew that the storefront had good foot traffic and considered the $130 monthly rent manageable.
Five years later, Tony Rastelli graduated from what was then called Glassboro State College with a degree in business administration. He joined his brother, opening a second Meat Stop, also in Deptford, on Clements Bridge Road.
They went on to open eight more Meat Stops, which attracted the attention – and orders from – surrounding restaurants, a far more lucrative source of business than families were.
By 1990, they were cutting steaks and chops for 100 restaurants, and for the next six years they focused on developing that side of the business, ultimately moving into an old 6,000-square-foot furniture store in Deptford, which they expanded to a 15,000-square-foot production plant.
It wouldn’t be enough.
By the early 2000s, the company, by then known as Rastelli Foods Group, moved to a 55,000-square-foot plant in the sprawling Pureland Industrial complex in Swedesboro.
The industrial park is home to one of Rastelli’s biggest customers, US Foods, a distributor to restaurants and health-care and hospitality operators, as well as government and educational institutions. They have since doubled the size of the plant, where 750,000 pounds of beef a week are cut into steak portions.
Automation – four $400,000-to-$500,000 machines with lasers that read the density of meat and cut portions to within one-tenth of an ounce – has reduced the number of butchers to just six, down from 50. Those are for boneless cuts, such as tenderloins and strips. A bone-in ribeye still needs “the old-fashioned way – with a band saw,” Ray Rastelli Jr.’s son, Ray III, said while leading a tour of the plant in February.
By the early 2000s, the company also saw opportunity in conflict. A trip to Dubai landed Rastelli Foods a deal to supply beef to the U.S. military in the Persian Gulf region.
“Prior to that point, I don’t think either one of us had been farther than Atlantic City, never on a plane,” said Rastelli Foods executive vice president Tony Rastelli, 56, of Sewell, who now spends 160 days a year out of the country – mostly in the Middle East, Europe, Asia, and Russia – for Rastelli Global, whose revenues are $150 million a year.
Upon President Obama’s announced plan in 2009 to withdraw most U.S. troops from Iraq by the end of August 2010, “we had to change our model again,” Tony Rastelli said. That came to involve delivering items – from food and beverages, to restaurant ovens and booths – to a variety of customers.
“If you sit in the Middle East and eat at TGI Fridays, you’re eating Rastelli’s steaks and hamburgers,” Tony Rastelli said. In any Cinnabon in Russia, “you’re getting brown sugar that was delivered from Swedesboro, New Jersey.”
Ray Rastelli Jr. also is a partner with cheesesteak impresario Tony “Luke” Lucidonio Jr. in TL Worldwide Phillyfood, a company that expanded the once-South Philadelphia-centric Tony Luke family brand into an international franchise, using items prepared by Rastelli Foods.
Rastelli Global is coordinated from a separate 110,000-square-foot facility in Swedesboro. Rastelli Global’s headquarters, including a massive warehouse, is about a mile from the meat and seafood plant. (Rastelli expanded into fish and seafood with the 2006 acquisition of Black Tiger Seafood in Egg Harbor.)
“Diversification is critical in our business,” said Ray Rastelli Jr. “The sales channels are critical; as one is rising, another could be in trouble.”
Lately, besides the Rastelli Market Fresh gastronomic emporium in Marlton the company hopes to grow into a chain, diversification includes boosting sales online and through QVC.
It’s largely the domain of the next generation, led by Ray Jr.’s son Ray Rastelli III, 32, vice president of e-commerce, and Tony’s daughter Lauren Rastelli DeMarco, 27, director of marketing.
In a niche dominated for decades by such meaty competition as Kansas City Prime and Omaha Steaks, e-commerce at Rastelli Foods is a $20 million-a-year business, up from $3 million two years ago, the company’s principals said.
Yet when it comes to on-air sales, it’s the older generation that is the face of the company.
Ray Jr.’s first appearance on QVC – hawking 4,000 10-packs of 6-ounce sirloin steaks for $69.72 each – sold out before the two-hour segment was over and yielded 1,000 waiting-list orders. Subsequent appearances have had similar results.
“Rastelli is a strong example of a great product with a compelling story and story-teller behind it,” said Rich Yoegel, QVC’s vice president of merchandising.
Both, Yoegel said, are critical to customers buying food via television who “don’t get to taste anything prior to purchase.”