Rastelli Foods Group Caters to Both Consumers and Other Retailers

By Lorrie Baumann

As both a retailer and a wholesale meat processor, Rastelli Foods Group is in prime position to observe how the American grocery landscape is evolving. Rastelli Foods Group supplies meat in the wholesale market to grocers and meal kit delivery services up and down the East Coast of the U.S., provides meat for U.S. military installations overseas, ships directly to consumers across the U.S. and operates two New Jersey specialty grocery stores, a 6,000-square foot store originally opened in Deptford as Rastelli’s Meat Stop and then remodeled and reopened five years ago as Rastelli Market Fresh and a new 40,000 square-foot specialty grocer in Marlton.

Ray Rastelli, III is the company’s Vice President and son of the Founder who started Rastelli Meat Stop about 40 years ago and grew it into one of the premier meat suppliers on the East Coast. His father, also Ray Rastelli, is still very active in the business and likely to be recognized by the QVC shoppers who see him pitching fresh and frozen meats four to six times a week on their televisions. The QVC sales are part of a direct-to-consumer mail-order operation that delivers 50,000 to 60,000 packages, mainly fresh and frozen meat and seafood products, both to those QVC shoppers and to customers who come directly to the company’s website. “We started our e-commerce platform in 2009,” Rastelli says. “For the first few years, we sold a few thousand packages a month. Over the past 18 months, we’ve seen a significant, significant increase.”

From this vantage point, Ray Rastelli, 33, is seeing a trend that’s corroborated by marketing researchers. U.S. government figures document that about half of Americans’ food dollars are now spend on food prepared in restaurants, and even when Americans eat at home, that doesn’t necessarily mean they’re doing the same kind of cooking that their grandmothers did. “The biggest thing I see that’s really changing in the past two years is the evolution of the at-home delivery companies,” Rastelli said. “Some of the retailers we work with are trying to come out with their own version of that – meal kits right at the front of the store. Those companies are definitely taking market share.” According to market research firm Packaged Facts, there are now more than 150 meal delivery kit services operating in the U.S. and over the past few years, these businesses have raised more than $650 million in venture capital. Most of these meal kit delivery services are targeting young professionals and families with children who live in urban areas.

Americans between the ages of 25 and 55 are increasingly comfortable ordering their food online, and and cooking it at home, often in the form of meals that can be prepared in 30 minutes or less. Women now spend less than an hour a day on food preparation and cleanup, while men still spend an average of less than half an hour a day working in the kitchen, according to 2015 statistics compiled by the U.S. Department of Labor.

Rastelli says his company’s online customers tend to be foodies who care about the quality of the food they’re getting. “They’re definitely people who are really engaged in food, not people who are just looking to put something on the plate,” he said.

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Rastelli, who started work sweeping floors in his father’s business when he was 10 years old, then became a regular employee on the night shift while he was a sophomore in high school, now sees these trends playing out in the company’s two retail stores. The original Rastelli Market Fresh was converted from a 6,000-foot Rastelli’s Meat Stop store five years ago. Designed as a kind of hybrid between Whole Foods and the previous store, but with a lot of prepared options, the business at the new store inspired the company to expand with a second, bigger location in Marlton, New Jersey, about a half-hour drive from Philadelphia.

The new Rastelli Market Fresh is more of a prepared food store with a pantry of specialty items than a full-service grocer, with almost half of its business professional customers stopping in to eat in the store rather than purchase a basket of food to take home and cook. The store includes several made-to-order restaurant-type concepts – there’s no hot-line buffet – including a pizza stand, sushi restaurant, a taqueria and a Craftwich sandwich shop. Customers order from any of the concepts and the store’s deli counter from a self-service kiosk that prints out a ticket for the customer, who waits only about 2-1/2 to 3 minutes for a meal that’s made from scratch. “It’s set the world on fire in that area,” Rastelli said. “It’s been beyond our expectations.”

Of the 20,000 customers a week who come through the store and check out with an average $38 purchase, fully 9,000 to 10,000 of them came to eat at the 150-seat cafe/lounge or to pick up a single meal to take home with them. According to research reported by the Washington Post in 2015, less than 60 percent of suppers served at home in 2014 were actually cooked at home, and although that trend stalled a bit during the recession, Americans began picking up takeout again as the economy improved.

The single most popular concept in the Marlton Rastelli Market Fresh store is a create-a-plate offering in which customers select a protein from several choices that might include a chicken breast, a filet mignon, a grilled salmon portion and a lamb chop and then add two sides from a menu of 10 selections to put together a total customized meal priced at $8.99. The concept has lines of customers waiting every day from 11 a.m. to 7 p.m., Rastelli said. “We package it up for them and off they go.”

The retail stores also act as a product development lab for products offered by the company’s online and wholesale operations. For instance, recipes for pre-marinated steaks and chicken breasts, which are extremely popular items, are pilot-tested in the retail stores, where Rastelli and other family members will spend time on the weekends talking to customers about whether they like what they’re eating. If not, the recipe goes back for more work until there’s general agreement that the company has a really good product before it’s mass-marketed to Rastelli’s online customers and to other grocery retailers. “We’re finding that grocery stores are just shifting to what people are looking for. “People still have to eat,” Rastelli said. “We try to cater to business professionals who are in a jam and trying to get dinner for their families because they worked late.”