Quebracho Empanadas, a pandemic success story in its pivot from St. Paul catering company to frozen foods brand sold in 350 regional grocery stores, is shutting down operations this week. Founder and CEO Belén Rodriguez said she was unable to raise funds need to grow.

“We had a clear path to profitability that would have made us cash flow positive at the end of 2025,” Rodriguez said. But in seven months of conversations with nearly 200 investors, she raised just $15,000.

“Two years ago, we might have been able to fundraise, but it’s Death Valley now,” Rodriguez said. “Investors told us they weren’t doing CPG (consumer product goods), they moved on to AI, they moved from pre-seed to seed or from Series A to Series B.”

Just last year, Quebracho won the food division in MN Cup, the largest startup competition in the country. She made the TCB 100 for 2024. Inspired by her family’s Argentinian recipes, Rodriguez had her sights set on building a national Latino frozen foods brand made with better-for-you ingredients. A first-generation immigrant, she worked as an interpreter when she moved to Minnesota and started cooking to feel connected to home. Buoyed by reactions from friends, she launched a catering company in 2018 and pivoted to frozen empanadas when Covid shut down events. After navigating the complexities of USDA certification, packaging, and branding, Quebracho Empanada started selling to stores in 2020. Her team was made up of fractional executives and a contract manufacturer.

“I am proud to have carved a meaningful space in the highly competitive frozen space at a time when the Hispanic sector continues to grow at an unprecedented pace,” Rodriguez wrote in a LinkedIn post. “I’m genuinely excited to see who continues to innovate and bring fresh and exciting flavors to both Latino and non-Latino consumers. The next five to seven years will be very exciting for Latino brands.”

Rodriguez did not make her decision in haste. “I saw this coming for a long time,” she said. Prices of materials and ingredients have been rising since late 2022. In 2023, Quebracho went through what Rodriguez described as a “massive margin optimization,” which resulted in bringing retail prices down from $9.99 to $7.99 per bag by slightly decreasing portion size. “It was a better value, but [wholesale, manufacturing] price increases continued.”

Dwindling cash reserves created a vicious cycle in the highly competitive grocery space. “We couldn’t invest heavily in brand awareness,” Rodriguez said, adding that it’s an uphill battle for small brands since grocers tend to reserve end caps and the best placement for top sellers.

Rodriguez said she considered trying to shift to yet another model, but didn’t have confidence that it would work.

“The food sector is so challenging—low margins, ton of risk, consumers are trained to follow trends. Is the market saturated? Did a bubble need to burst? I’m baffled, but I’ve done my grieving process.”

Rodriguez said she closes the door on Quebracho without regrets. “Never in a million years would I have imagined having the opportunity to come from another country with a degree in English and build what I built. I love being an entrepreneur. I love innovation. The future is a blank canvas.”