Pivoting in the Face of Change: Q&A with Fred Castellucci

By Haley Harward

With a generational proclivity for restaurants, Federico Castellucci III grew up with an affection for the industry. Eventually, he followed in his father and grandfather’s footsteps to take over the family business after graduating from Cornell University’s Hospitality Management program as the business faced compelling hardships.

Castellucci Hospitality Group has more than 100 years of experience in the industry, and Fred has spent his whole life in restaurants. The family first opened an Italian restaurant in Rhode Island in 1917 that was very successful throughout the following decades. But when a credit union crisis and water crisis hurt Rhode Island’s industry in the 1990s, Frederico Castellucci (affectionally known to many as Mr. C.) moved his family to metro Atlanta for a fresh start. When they opened a new restaurant in 1997 – Roasted Garlic – his son, Fred, was only 13 years old.

Although he grew up working in restaurants, Fred originally had plans to be an attorney. Yet the pull of the industry drew him back. After graduating from Cornell University’s Hospitality Program in 2007, Fred returned to Atlanta and joined the family company during the depths of the Great Recession.

Rather than see the difficulty, Castellucci saw the opportunity to lead. He took over operations of the family restaurant Sugo in Johns Creek. After his sister joined the business in 2009, Fred refocused on opening new concepts and growing the company. Since then, Castellucci Hospitality Group has opened concepts The Iberian Pig (Decatur and Buckhead), Double Zero (Atlanta), Cooks & Soldiers (West Midtown) and Bar Mercado and Recess (Krog Market).

As President and CEO, Castellucci has transformed the business into the multi-concept operation that Castellucci Hospitality Group is today. He works directly with the culinary teams to refine menus, general managers to discuss procedures, and spearheads the group’s growth decisions.

In 2020, Castellucci Hospitality Group launched a sushi pop-up takeout restaurant out of its Cooks & Soldiers kitchen called Mujo. The concept was so popular, the group is launching it as a bricks-and-mortar restaurant next to Cooks & Soldiers in West Midtown later this year.

Aside from leading Castellucci Hospitality Group’s vision, Castellucci serves on the Board of Directors of the Georgia Restaurant Association and dedicates himself to early-stage hospitality companies as an advisor, mentor and investor. Because of his initiatives and exemplary leadership, Castellucci has received the Restaurateur of the Year GRACE Award, the Atlanta Business Chronicle “40 under 40” award and the Small Business Person of the Year for a family-owned business.

As the coronavirus pandemic continued to impact the restaurant industry throughout the year, Restaurant Informer spoke with Castellucci about how Castellucci Hospitality Group has pivoted in its wake, how the industry in Atlanta has changed and what he anticipates for the future. Following are edited highlights from the conversation.

Before taking the reins of your family’s business, what was the first job you had in the restaurant industry?
I was an apprentice baker in Federal Hill, Rhode Island, the little Italian neighborhood there, at a place called Roma Deli when I was 11 years old, so I got started pretty early. Saturday and Sunday mornings at 5 a.m.

Did you always know that joining the family business was what you wanted to dedicate your career and life to?
Not necessarily. When I was in school I kind of went off in a different direction, but as I was graduating and getting out, the situation with the family business was pretty dire. The businesses had [either] closed or were losing money, so it was an opportunity to jump in and try to ride the ship my own in a sense. That was the impetus in the beginning, and from there it just grew.

What were the early days of the pandemic like for you, your business and the restaurant industry in Atlanta?
We had been through really tough times in 2007 and 2008 with [Castellucci Hospitality Group] when I first took over. In a lot of ways, I kind of ran the same playbook as I did then.

In those early days, there was so much uncertainty that we really had no idea what the next day was going to look like, and every single day the rules around what we could and could not do and could we even operate as a business were changing.

The public was reacting to that as well, so the customers didn’t know if they could go to restaurants or not, order takeout or where they could get their food. And communication was really poor from our government officials. They were like “we’re shutting everything down,” but people didn’t know that didn’t mean takeout.

I recognized early that there was a significant cost to shutting everything down [such as] inventory, staff and the collateral damage of laying off hundreds of people and all of our managers. Really, would we ever be able to get that back? Would we ever be able to reopen in the same manner as before?

I made the decision early that we were going to stay open in any capacity possible and keep as many of our people on staff as possible. We decided to take a different approach from shutting down – which is what most people did – and stay open, fight through it and adapt quickly to generate sales in any possible way we could while reducing our cost structure dramatically to accommodate the new reality.

While most restaurants started offering takeout and delivery, why did you decide to pivot to pop-up concepts?
We started doing takeout at all of the restaurants, and the sales were ok. We started trying to build that business quickly, but for some stores there wasn’t much of a neighborhood. If we’re in business [in] a neighborhood where people are home and order takeout a couple of times a week, there’s an opportunity for sales. In neighborhoods where we weren’t doing that, we needed to take a more aggressive approach.

So in addition to the takeout, we started doing pop-up concepts as a way to generate awareness for that business and drive a sale because, ultimately, any sale that we did was going toward keeping our people employed. That was always my goal: keep as many people employed for as long as possible.

If everything were to “go back to normal,” without any limitations, are these pop-up concepts something you’d like to keep in place?
Yeah, it worked out really well with our sushi pop-up Mujo, which was something I’d been working on with a chef from New York City [Mujo Executive Chef J. Trent Harris]. He and I had been planning on doing a pop-up in Atlanta, and it just so happened that the pandemic forced us into doing takeout.

Once he came down, we just started talking about plans for the future and what a partnership would look like. Now that restaurant is turning into a brick-and-mortar space, so we’re doing a full-on opening of a restaurant with the concept. It’ll be sometime in 2021. It’s tough to say when with construction and permitting, but it’ll happen next year.

What’s been the response to your holiday meal options so far?
It’s been great, honestly. The one thing we recognized in the very beginning of the pandemic was that people were going to continue to celebrate holidays. In some form or fashion, they were going to do so with restaurant food.

We recognized, when Easter was really big, that there was an opportunity for these holidays, so we created takeout packages for each major holiday to capitalize on the demand that was out there. We haven’t been 100%, somethings we’ve done haven’t worked, but when they do work it’s really good and helps us bring in sales, cover costs of staff and things like that.

The holiday offerings, not just Easter but Christmas Eve most recently and Thanksgiving, have been a lifeline for the business during these challenging times.

How do you think these responses (takeout, holiday meal options and pop-up concepts) will affect the restaurant industry in the long run?
I think people have short-term memories and that ultimately people are going to want to go back to “normal” as quickly as possible when it’s safe. I think there’ll be reverberations from the pandemic and how its changed restaurants, but I also think that there’s going to be a strong drive [back] toward dining in at restaurants and experiencing the things that people haven’t been able to experience in a very long time.

I also think that things like takeout and the stuff we did that was creative to drive business for us during this time will likely continue in the future. One of those big things is having takeout options that are really well-designed and can feed people on a number of different and special occasions where people want to host things in their home, and catering.

We never really did any catering or takeout, and now it’s a big piece of our business. I think that will continue to be – maybe not as big as it is now – a significant portion of what we do.

Was it hard for you to transition to takeout having never offered it before?
When I saw what was happening in other parts of the country, overseas and how much of an effect [the pandemic] was having on restaurants specifically, we immediately started developing and designing takeout options, family meals, stuff that would travel well and loading out restaurants onto UberEats. [It] was honestly what saved us in the very beginning of the shutdown.

Why do you think it’s important to give back in times of crisis such as with the Feed the Frontlines initiative?
It’s honestly such an extension of the hospitality industry at its core. What we do is take care of other people. The product might be food, but the hospitality, the service we provide, is in service of others. It’s just a natural reflex for us to do that even when we ourselves are struggling. It’s kind of how we get by, how we survive, and how we succeed – by serving others.

How has the pandemic brought people together in the restaurant industry such as with the Georgia Hospitality Together Initiative and the industry’s efforts to support out-of-work employees?
I think that as an industry, we’re already pretty close-knit. When our industry was singled out – that isn’t the right word, but kind of affected more dramatically than many others – the natural response from those in our community was to band together. That’s been really cool to see and be a part of.

How have your regular diners and new customers responded to the way you’ve pivoted and innovated during the pandemic?Largely, I think it’s been extremely positive. Dining in is one area that’s challenging because people expect it to be exactly the same as it was before and it’s not; it’s just not possible for it to be what it was in the current environment.

It’s challenging for some, but largely people are happy with how we’ve pivoted to serve the community, what we’ve done with takeout, giving back and also having dine-in experiences that are as similar to what it was before as possible.

How has your relationship with your suppliers and farmers changed?
I think it’s only strengthened for us because we really stuck by them in the early days. When everybody around us was shutting down, we stayed open and committed to continue purchasing from the people we had long-standing relationships with and, on top of that, paying them. That’s part of it, too; allowing them to survive financially. Because we were in a good position, we were able to do that.

What’s a typical day like for you now?
Right now, a lot of it is taking virtual meetings. We do all of our manager meetings both virtually and in-person, so I have meetings stacked up virtually and I’m working with the general managers, chefs and operations of each restaurant to continually navigate through the pandemic-related challenges and the new businesses that we’re setting up for 2021 and beyond.

Has there been anyone or anything that’s helped you the most throughout the pandemic and these last few months?
It’s 100% my family. At home, we had a child in July and my wife runs the marketing. She’s been essentially critical to the operation, driving sales in everything we’re doing from an online and commerce perspective. Then my brother, sister and parents who are working in the restaurants on a daily basis have been absolutely critical to survival.

With multiple vaccines rolling out and the prospect of normalcy spreading, how do you think the restaurant industry will continue to pivot and innovate new ideas?
I like to think there’ll continue to be that sense of creativity and entrepreneurship, but I honestly think that most people will settle back into their normal ways of doing business as quickly as they possibly can.

Humans are incredibly adaptable, but we also gravitate toward comfort. Creativity, entrepreneurship and change are not comfortable things, so I think a vast majority will settle back into that. But I do think that there will continually be good, creative output post-pandemic. I just don’t think it will be nearly what we’ve experienced in the last 10 months.