From Retail Stores to Industrial Distributors: Buen Provecho's Next Evolution

After proving their model with retail stores and restaurants, Buen Provecho is tackling a different part of the food waste problem—one that most consumers never see. Industrial distributors and food manufacturers waste enormous quantities of perfectly good products because retailers demand impossible shelf-life standards. The solution requires dark stores, logistics infrastructure, and a new capital raise.

On the Levels Podcast, Guillermo Martinez, COO and co-founder of Buen Provecho, revealed their plans to expand beyond retail into the industrial food supply chain, where the waste problem is even bigger but requires a fundamentally different approach.

The Hidden Waste Problem

Most people understand restaurant and grocery store food waste. You see products approaching expiration dates, you know some items don't sell before they spoil. It's visible and intuitive.

But Guillermo described a waste problem that happens much earlier in the supply chain, at a scale that shocked even him.

"For example, there's a huge a massive company called Grupo Bimbo in Latin America that builds basically it's they make bread, bread and associated products. think Grupo Bimbo is now owned by Nestle and they do basically baked goods in an industrial and insanely massive scale."

These industrial-scale producers and distributors face a different challenge: retail shelf-life requirements that force them to dispose of products with significant remaining usability.

"When you talk with a lot of distributors, they have the same problem. But they cannot sell their produce because it has maybe 60 days of life left and supermarkets need at least 90 days of shelf life otherwise it's not going in the store."

Read that again: products with two months of shelf life remaining can't be sold to retailers. So what happens to them?

"So they have their merchandise they end up actually lighting it on fire or just burying it burying it under the ground which is insane the first time I heard that I was like in shock honestly."

When Guillermo heard this on a client call, his reaction was pure disbelief. Products with 60 days of shelf life—perfectly safe, perfectly edible—being buried in the ground or burned because they don't meet arbitrary retail requirements.

The economics are brutal. It's simply the cheapest disposal method.

"It's the cheapest way. You just pay some random guy and they go to a field up with the permits and they just do what you have to do."

Why the Current Model Doesn't Work

Buen Provecho's existing model works beautifully for retail stores with surplus. Users are already in city centers where stores are located. The average user travels about two kilometers to pick up products. The logistics are straightforward: user downloads app, sees nearby options, walks or drives a short distance, picks up food.

But industrial distributors operate differently. They're located in industrial parks outside cities. They have products in bulk quantities. And consumers aren't going to drive 20 kilometers to an industrial park to buy food, no matter how good the discount.

"So we have that problem, as I said, nobody's going to go to an industrial park outside the city just to stay a few bucks."

The value proposition simply doesn't work with their current direct-to-consumer pickup model. Even if a user could save 50% on products, the time and transportation cost of getting to an industrial park makes it uneconomical.

This creates a fascinating problem: there's massive waste happening at scale, there's clear demand for affordable food, but the geography and logistics don't align with the behavior patterns Buen Provecho has built around.

The Dark Store Solution

The solution Buen Provecho is developing involves fundamental changes to their model: logistics, consolidation, and dark stores throughout the city.

"So we need to find a solution that involves logistics, consolidation, and a point of sale like small, like dark stores around the city."

Here's how the new model would work:

Step 1: Consolidation at source - Pick up bulk quantities from distributors and manufacturers at industrial parks

Step 2: Break down and sort - Process bulk quantities into consumer-sized portions and categories

Step 3: Distribute to dark stores - Place inventory at small distribution points throughout the city (dark stores that aren't customer-facing retail locations)

Step 4: Last-mile pickup - Users pick up from dark stores that are within their normal 2-kilometer radius

This transforms the logistics from "consumer goes to distributor" (impossible) to "distributor to dark store to consumer" (feasible).

Dark stores have become common in quick-commerce, where they serve as fulfillment centers for delivery. Buen Provecho is adapting the concept for pickup, creating convenient locations where users can grab products without traveling to industrial parks.

The Capital Requirements

This expansion requires significant investment—something Buen Provecho didn't need for their retail model.

"And we're kind of like developing that solution. And actually that's what we're kind of like raising money right now. We're trying to do that."

The capital needs are straightforward:

Real estate for multiple dark store locations across their operating cities

Logistics infrastructure including vehicles and routing systems for moving products from distributors to dark stores

Inventory management systems that can handle bulk purchasing and breakdown into consumer units

Working capital to buy products from distributors upfront rather than just facilitating connections

This is a fundamentally different business model than the marketplace approach that got them started. They're moving from platform to operator, taking on inventory risk and logistics complexity.

The capital raise timing makes sense. They've proven the retail model works across multiple markets. They have the user base to support expanded inventory. Now they need capital to build the infrastructure for the next phase.

Why This Matters for the Mission

Buen Provecho's mission has always been broader than just retail food waste. The goal is to reduce waste across the food system.

"Our core goal is to reduce waste in general. And we think that food waste is the low-hanging fruit, so we started there."

The numbers support focusing on distribution and manufacturing:

"Around 18%, just read the number. happens between distribution and commercialization basically. So, and that part actually has a 25 % of the whole value of the whole food waste industry."

While 18% of food waste happens at the distribution and retail stage, it represents 25% of the economic value because products have more investment in them by that point—manufacturing, packaging, transportation, storage. There's more value to recover.

Attacking this part of the supply chain also has bigger environmental impact. Products burned or buried represent not just wasted food but wasted energy, wasted water, wasted transportation, and active pollution from burning or decomposition.

The Path to Other Categories

Solving the distributor challenge opens doors beyond food. Buen Provecho sees this as a template for expanding into other categories where waste problems exist.

"And obviously just take more mission further. Obviously that will allow us to, you know, go to other industries. For example, we're thinking about like cosmetics, right? Everything that touches humans needs to have an expiration date."

Cosmetics face similar challenges: products approaching expiration dates can't be sold through traditional retail, even though they're perfectly safe to use. The same infrastructure that solves food distribution could solve cosmetics distribution.

"And like big companies like L'Oreal, for example, for a lot of their products. So that's like ideas that we have kind of like validated, but we need at least also to be focused, like we're a startup. So we have like a main engine, but we need more resources to start, know, okay, let's do these sort of things."

The strategic question is whether to rebrand from "Buen Provecho" (which means "have a good meal") to something broader, or launch separate brands for each category. They haven't decided yet, acknowledging the tension between brand equity and expansion potential.

The Technical Challenge

Building the distributor model requires solving several complex operational problems:

Demand forecasting - How much to buy from distributors when you don't know exactly what will sell

Inventory allocation - Which products go to which dark stores based on user density and preferences

Shelf life management - Tracking expiration dates across multiple locations to minimize waste

Pricing optimization - Setting discounts that move products before expiration while maintaining margins

Logistics routing - Efficient routes for distributing from industrial parks to multiple dark stores

These are sophisticated operations challenges that go well beyond the relatively simple marketplace model they started with. But they're necessary to unlock the next level of impact.

Staying Focused

Despite the excitement around expansion possibilities, Guillermo emphasized the need for focus.

"Obviously that's something we haven't come to terms yet, haven't decided, but yeah, it's on the table."

They're not trying to solve everything at once. The immediate priority is proving the distributor model works with food. Then expand to other categories. Then potentially other industries.

This disciplined approach contrasts with startups that try to do too much too fast. Buen Provecho learned from their Colombia expansion challenges that focus matters. Better to execute one new initiative well than to launch three half-baked attempts.

The sequencing is deliberate: master retail, then distributors, then new categories. Each builds on the previous foundation.

Key Takeaways

• Different parts of the supply chain need different solutions as distributor waste can't be solved with the retail pickup model
• Dark stores enable geographic expansion by bringing industrial products to consumer-convenient locations
• Capital requirements increase when moving from marketplace to operations with inventory risk
• Mission expansion requires infrastructure as solving bigger problems needs investment in logistics and real estate
• Focus matters even with big opportunities as trying to expand to too many categories simultaneously reduces execution quality

Listen to the full conversation with Guillermo Martinez on the Levels Podcast to hear more about expanding the mission beyond retail into industrial food waste.