Jüsto aims to disrupt the grocery industry in Latin America

Oliver Butterworth
Retail Analyst
@RetailAnalysis

Date : 18 August 2020

Mexican start-up Jüsto (Fair) was launched in July 2019 as Mexico’s first 100% online supermarket. Over the next 10 years it aims to become one of Latin America’s favourite supermarkets. It believes it can do this by employing the best talent and developing technology, which will allow it to compete with the largest retailers.

“We are looking to revolutionise the industry… with a better quality of fresh products at super competitive prices. Jüsto was born as the first 100% online supermarket in Mexico and a pioneer in Latin America." Founder and CEO Ricardo Weder.

The platform offers over 5,000 products and provides a mix of both local and international brands.

Source: Jüsto

High quality products at fair prices…

Jüsto, whose mantra is frescos siempre frescos (fresh, always fresh), aims to provide exceptional quality products at fair prices. It prides itself on working directly with local suppliers to offer the freshest fruits, vegetables, meat, and fish in the market. It recognises that by working directly, produce does not spend time on display, losing freshness.

Source: Jüsto

"What happens in many cases is that the product, mainly edibles such as vegetables or fruits, spend so much time on the shelf, bruised, that they lose their freshness, so you have to go looking for what is left to take with you." Weder.

Source: Jüsto

In addition to fresh, Jüsto sells pantry items, beer, wine and spirits, personal hygiene and beauty, household and cleaning, beverages, and pet products.

…with a range of delivery options

Jüsto’s delivery options include next day delivery, same day (in a chosen time slot), or urgent order (delivered in an hour).

Huge potential for tech start-ups in Mexico

Jüsto is improving its technology and infrastructure, as well as scaling its operation. Weder is the former CEO of Cabify, a multinational taxi app, which, during his time at the business expanded from being available in four cities, to over 120 globally. Weder said “it was that way we managed to grow that led me to realise that in Mexico there is talent to develop technology and, even generate unicorns”.

Heavy investment in year one

In recent years Latin America has become a focus for venture capitalists and investment in the region has doubled each year since 2016. According to LAVCA (Latin American Venture Capital Association) 2019 was a record year for venture capital fundraising, with US$4.6 bn invested across 440 transactions. 

In its first year, Jüsto raised over US$23m from global investors, US$12m of which was recently received as a bridge round (July 2020).  One of Jüsto’s early investors, Foundation Capital, also invested in Rappi, which has since achieved unicorn status.

Venture capital investment in Latin America

Source: LAVCA

Rodolfo Gonzalez (a partner at Foundation Capital) said he was impressed with Weder’s work at Cabify, which led to his early involvement with Jüsto. He commented “we’ve seen [this] type of model of warehouse and D2C for groceries be very successful in other geographies… but that model didn’t quite exist in Mexico”.

Further expansion in Latin America

Jüsto launched in Mexico City and is expanding to other Mexican cities. To support this, it continues to open new distribution centres, which operate as dark stores.

Weder is interested in expanding into Colombia, Peru and Chile; “The opportunity in Latin America is great, each territory is different, but we know that very good things can be done in countries like Colombia, Peru, Chile and more...”.

It hopes to expand to these markets by early 2021 and is prioritising Colombia.

Supporting local SME’s

Jüsto seeks to promote local producers, selling their products and helping them to establish their distribution process. Products from local suppliers represent 25% of those sold on the Jüsto platform

Weder states; “we have large brands, but we are also giving a lot of play to small brands [and] small producers that normally do not sell in self-service due to the commercial conditions that this imposes on them in terms of payment, volumes, promotions and discounts”.

Commitment to sustainability

Jüsto is committed to reducing food waste and eliminating single-use plastics. As a purely online retailer, it is leveraging algorithms to support this. Weder states that a traditional supermarket faces shrink of 35%, and Jüsto is committed to having only 3%" . The business is analysing the possibility of reusing containers in shipping liquids.

Pandemic has supported growth

The COVID-19 pandemic has altered consumer habits and created a shift in people shopping online. This has supported Jüsto’s growth. In March, the business recorded a 500% increase in the volume of orders.

Source: Jüsto

A differentiated proposition

While the major retailers in the region offer delivery and partner with third party deliverers for rapid deliveries, Jüsto benefits from owning the end-to-end process.

Working with local producers quickens the pace it can move produce from farm to shelf, enabling it to offer the freshest quality. Jüsto’s business model removes the need for it work with other intermediaries who eat into producers’ profits, allowing it to sell products at competitive prices.

Its latest US$12m investment will no doubt strengthen the busines, as it continues to capitalise on the success it is having during the pandemic. We expect Jüsto to reach Mexico’s major cities and expand into new markets in the next six to 12 months.

This report provides insight on the evolution of last mile, rapid delivery services in Latin America. This includes both global businesses that have entered the region (e.g. Uber Eats and Glovo) and the extremely successful local players (such as Cornershop, iFood and Rappi).

See the latest industry news on Latin America.