In this work, a comparison between the extracts of dehydrated yerba mate (Ilex paraguariensis) and bio-waste of yerba mate leaves from the Brazilian industry was made. The incorporation of the functional extract as a preservative/functional ingredient in a pastry product (pancakes) was tested. The individual profile of phenolic compounds was determined by HPLC-DAD-ESI/MS, and the bioactive potential was assessed using in vitro assays for antioxidant, anti-inflammatory, antimicrobial, and cytotoxic activities. The yerba mate extracts revealed a high antimicrobial potential against the tested strains and a very promising antioxidant and anti-inflammatory action. Additionally, revealed a cytotoxic capacity for MCF-7, CaCo and AGS tumor cell-lines. In the three types of pancakes, after 3 days of storage, the chemical and nutritional characteristics remain unchanged, proving the preservative efficiency of the extract. This study showed the benefits of the use bio-waste from agro-industrial sector, focusing on sustainable production and the development of circular economy.