Processor. of the Year

Transcription

1 2018 Processor of the Year Rastelli Foods Group has transformed itself as the go-to protein processor in the e-commerce (and home-shopping) segment, all while building its retail brand and growing its legacy retail, foodservice and export businesses. BY ANDY HANACEK editor-in-chief Ray Rastelli Jr., Ray Rastelli III and Brittany Rastelli, of Rastelli Foods Group, at QVC Studios in West Chester, Pa. PHOTOS BY RYAN KERGIDES, RASTELLI FOODS GROUP 22 THE NATIONAL PROVISIONER PROVISIONERONLINE.COM JUNE 2018

2 Ratings smash When The National Provisioner profiled Rastelli Foods Group in October 2014, the company had built itself into a steak-cutting foodservice, private-label and export powerhouse. The story touted the company s full-circle success, as it had reached back to its roots as a butcher shop, opening the first of several specialtyretail markets in the greater Philadelphia region. Today, the processor has reaped the rewards of investment into those channels and further grown those segments. However, those ventures are a small part of the high-flying success that Rastelli Foods Group has experienced in the last year, having expanded into new arenas and quickly built a reputation as the go-to protein processor in those segments. A strong focus on the e-commerce channel, coupled with the construction of a new Fulfillment Center and two successful partnerships with the television shopping network QVC and the TV show Shark Tank, has catapulted the company forward significantly in the last year. Based on this success, Rastelli Foods Group has been named The National Provisioner s 2018 Processor of the Year. We recognized over the course of [several] years that you have to be able to do more than just cut a piece of meat, explains Ray Rastelli Jr., coowner of Rastelli Foods Group. At one time, foodservice was 98 percent of our business, and we thought it was important to move into other categories to keep our business consistent. E-commerce emergence Growth of the variety achieved by Rastelli Foods Group in the past year doesn t come without proper planning and a catalyst to give those plans a push forward. With Rastelli Market Fresh (the specialty-retail markets owned and operated by Rastelli Foods Group), it reconnected directly with consumers and began studying and listening to what they wanted. Meanwhile, the company was building out its e-commerce business and planning to build a new Fulfillment Center, focused on the rising consumer interest in the meal-kit marketplace. The years we spent developing and learning the e-commerce business from the manufacturing side as well as the marketing side, helped us become experts in the industry, Ray Jr. says. The knowledge that we have in e-commerce packaging, processing and labeling is exactly what [meal-kit customers] need; they re not meat or seafood companies, so they look for processors and fulfillment centers that can do that for them. The investment in the e-commerce platform has paid off, according to Ray Jr., with business approaching 40 percent of the company s overall volume, from non-existent approximately five years ago. Because of our vertical integration internally and 40 years of meat Historical winners Processor of the Year 2018: Rastelli Foods Group 2017: Monogram Foods 2016: Foster Farms 2015: AdvancePierre Foods 2014: Link Snacks Inc. 2013: JBS USA 2012: Land O Frost 2011: Tyson Foods 2010: Halperns 2009: West Liberty Foods 2008: Hormel Foods 2007: Sara Lee Food & Beverage 2006: Smithfield Foods 2005: Smithfield Foods 2004: Hormel Foods 2003: Cargill Meat Solutions 2002: Tyson Foods 2001: (Unknown; archives missing) 2000: Colorado Boxed Beef 1999: Farmland Industries Meat Group 1998: Smithfield Foods 1997: Sara Lee Meats 1996: IBP Inc. 1995: Oscar Mayer Corp. 1994: Hormel Foods industry experience, we ve been able to drive sales for those customers without faltering through missteps that they may have otherwise taken on their own, he says, while pointing out a path to further growth that Rastelli Foods Group can follow. E-commerce customers need to tell their consumers a story, and we work very well for that [consumer JUNE 2018 PROVISIONERONLINE.COM THE NATIONAL PROVISIONER 23

3 Andy Hanacek, editor-in-chief of The National Provisioner, and Ray Rastelli III, vice president, Rastelli Foods Group, talk about the processing changes that Rastelli Foods Group has instituted on the processing floor at the Swedesboro, N.J., plant. demand], because we have direct relationships with many farmers around the country, he adds. A great company history and backstory, in fact, has led to stunning growth in another area of the e-commerce segment for Rastelli Foods Group: Its high-flying success on the QVC TV shopping network. Although it is a small part of the company s overall business, it certainly has been the most visible in the past year or two. Ray Rastelli III, vice president of Rastelli Foods Group, says the partnership started out on the private-label side, but took off after Rastelli Foods Group launched its 40-year-old steak brand, allowing consumers to buy in to the company s backstory and decades of experience in the meat industry. We were selling our seafood products for about six months under the Egg Harbor Seafood line, and that was going really well, when they approached us [to sell our steaks], Ray III explains. The Rastelli team put together a product package, price point and a storyline around being the meat processor supplying specific, well-known steakhouses, to present to QVC viewers in its upcoming episode. They basically said that was a great story for the foodservice business, but it wasn t what their customers wanted to hear; they want to hear what we are, Ray III says. You guys are a butcher shop, that s how your father founded the company, they said. Ray Jr. was the obvious choice for the on-air personality, and QVC gave the Rastelli product two airings (a total of eight minutes each) to tell its story and sell 5,000 boxes of sirloin steaks. In the first five minutes of the first time slot, customers bought roughly 80 percent of the product, and the remaining 20 percent sold out before the second time slot. We went on QVC that day, and since then, it s been a whirlwind, Ray III says. Today, we are QVC s largest food vendor, and we sell six brands [now]. Success at QVC is built upon gaining the customers trust through the visuals and the story, as well as truth in taste, as Ray Jr. calls it. We make sure that every product that we sell on QVC isn t just good; it needs to be great to get that response. We understand what makes a great product, and we ve learned that QVC and e-commerce customer pretty well, he adds. We understand how the product needs to look, taste, be packaged or portioned, and we ve been able to now get it directly to that consumer through our Fulfillment Center. Where the QVC business truly earns its keep for Rastelli Foods Group, however, is more intangible. It has been instrumental not just as a volume driver, which keeps our plant busy, but also as a great brand awareness vehicle, Ray Jr. says. Because of our presence on QVC and the awards and achievements we ve received, other people in the industry have approached us to manufacture their products for them. Pure growth, in the Tank Behind the scenes, far from the studio cameras and fast-paced world of e-commerce, Rastelli Foods Group has carved a niche for itself First, it has found significant success in attempting to corner the market in the world of domestic, USDA-certified organic, grass-fed beef. Four years ago, Rastelli Foods Group began developing the Pure Land America brand a brand that differentiates itself from other organic, grass-fed programs based on its sourcing. We knew it had to be grass-fed, USDA-certified organic, but it also was critical that it was a domestic program, as the majority of the organic beef that is sold in this country today is Australian or Uruguayan, according to Michael Carr, marketing director for Rastelli Foods Group. The product has resonated with consumers and privatelabel customers, as it comprises nearly 25 percent of the company s overall volume and is featured in more than 5,000 supermarkets across the country. The retail consumer is gravitating toward this, especially Millennials, but now we re starting to see it on the 24 THE NATIONAL PROVISIONER PROVISIONERONLINE.COM JUNE 2018

4 QVCchimes in on Rastelli Foods Group success The National Provisioner asked Christina Pennypacker, senior buyer, QVC, about the relationship between Rastelli Foods Group and QVC. What follows is a portion of that interview: Q: Describe the popularity of Rastelli s products among QVC customers. What drives that popularity, and what do customers cite as their primary reasons for purchasing Rastelli products? A: Rastelli s growth has been tremendous. In two years time, it became our No. 1 food vendor. Rastelli differentiated itself by first focusing on Black Angus beef and then by bringing the butcher shop experience to life on-air. Having started his business as a neighborhood butcher, Ray Rastelli was passionate about bringing that knowledge to QVC customers and ultimately gaining their trust. Ray encourages our customers to try new cuts by explaining the features and best uses, and he also empowers them with tips on proper preparation. Ray will go as far as to cut the steaks we re selling live on air, showing exactly where the steak comes from it s an engaging experience. Customer reviews on our Rastelli products have been very good and whenever we get concerns, the Rastelli team will immediately address them and make improvements for the future. Rastelli respects its relationship with our customer, and it s reflected in the success. Q: While researching this story, I saw that Rastelli Foods Group was named the fastest growing food company on QVC. Is that an official award, what criteria are used to determine it and who has won in the past? A: The Rastelli brand has experienced the fastest growth of any food brand for at least as long I ve been in the food office (almost eight years). There is no award associated with that, but Rastelli Foods did win QVC Customer Choice Food Awards in 2017, including Best Burger and Most Recommended Brand. In 2018, Rastelli was also nominated for two QVC Star Awards, our company-wide vendor recognition program. Amongst hundreds of vendors, Rastelli was a final nominee in both the Rising Star category and the Customer Engagement category. Q: What s in store for this partnership moving forward as QVC sees it? A: Surprise and delight is at the core of what we do at QVC, and our customers expect it. A vendor who fails to continually innovate is unlikely to succeed. The Rastellis have embraced this philosophy and are deeply engaged with the business. Based on what we ve accomplished in a little over two years, I am incredibly optimistic about the future. New product concepts are presented to us on a monthly basis, and we work closely with the Rastelli team to develop the right launch strategies for each item. Beyond Rastelli Foods own line, the company continues to collaborate with other brands on manufacturing, supporting our business in more ways than one. I anticipate this is just the beginning of the Rastelli story here at QVC, and I look forward to setting new records! JUNE 2018 PROVISIONERONLINE.COM THE NATIONAL PROVISIONER 25

5 Baby Boomer side as well, Carr says. It s been one of our fastest-growing segments, and I would venture to say we are leading the industry in this boutique segment of domestic, organic, grass-fed beef. Meanwhile, Rastelli Foods Group has developed a strong reputation with another TV brand: the Shark Tank show, through which entrepreneurs and smallbusiness owners pitch a panel of multi-millionaires and billionaires ( sharks ) in the hopes of securing investments to take their businesses or products to the next level. Rastelli Foods Group hasn t appeared on the show, but it has built a reputation as a processor and partner who can help entrepreneurs ramp up their production and take it to a commercial market. It s a real partnership, Ray Jr. says. Because of what we do, we have the understanding of how [to take] a great product that didn t really have a vehicle to manufacture, merchandise or sell in a commercial environment. So far, Rastelli Foods Group has been able to help grow two investments by Daymond John (one of the sharks on the show): Bubba s-q Boneless Baby Back Ribs and Three Jerks Jerky. The patented Bubba s-q Boneless Ribs are sold on QVC and Rastelli s own e-commerce site, and according to a story on Delish.com in Fall 2017, the business had grown to more than $16 million. With the help of Rastelli Foods Group, Bubba s-q products are in more than 5,000 retail locations, while Three Jerks 100% Filet Mignon product is in approximately 2,500 stores at a lower price point (because of improved costs on the manufacturing side, realized through the partnership with Rastelli). Time to fill Fortunately for Rastelli Foods Group, room to grow still exists throughout its supply and distribution chain. Our external growth has come from being able to implement processes, IT solutions, that are now automated so that what used to be a line that could do pounds a minute can now produce 200 pounds a minute, Ray Jr. explains. We ve had major capital investments in the last two years, but it has also really come in cultural change, getting our people to understand where we re going, how we ll get there and how they are part of the solution. Rastelli Foods Group has been able to maintain that strong family business culture, he adds, but they ve also instituted a Lean Six Sigma program that has reaped fantastic operational benefits. Additionally, a second shift has been added to handle the increased demand for throughput. On the steak-cutting side of the business, Rastelli Foods Group has added two new cutting lines and four vacuumpack lines, and at the time of The National Provisioner s visit to the Swedesboro, N.J., facility, it was awaiting two new burger-processing lines and two new lines dedicated Ray Rastelli III and Hanacek walk through one of the coolers at the Swedesboro plant. solely to the organic, grass-fed program all of which was expected to add about 70 percent capacity. With the automation and innovation, and the process flow development, we ve taken it from zero remaining capacity to approximately 40 percent remaining, which is exciting for us, Ray Jr. says. At the fulfillment center, the company believes it has plenty of room to grow, with Ray III saying that the company could ship as much as 100,000 orders per day as demand grows. Growth has been tremendous for us because of the [improvements in] process flow, innovation and diversity of moving the business into retail and e-commerce, says Ray Jr. What most people will see as we grow moving forward is our branding; this will be a brand that is in millions of households via QVC, grocers and club stores across the country a full consumer goods brand that has become more nationally recognized. With that approach, meat-industry audiences should expect to be impressed by any sequels, spinoffs and storylines that Rastelli Foods Group produces as a follow-up to this year s smash hit. NP 26 THE NATIONAL PROVISIONER PROVISIONERONLINE.COM JUNE 2018