Panama Food Service Sector

The restaurant industry in Panama has experienced steady growth over the past few years, driven by increasing urbanization, a growing middle class, and a thriving tourism sector.

Panama City is a hub for diverse dining options, offering both local and international cuisine. The sector, valued at around $2 billion, continues to expand as consumer confidence increases.

There are several key trends shaping the market. First, there is increasing demand for health-conscious dining options, including organic, vegetarian, and gluten-free choices, especially among middle to upper-income consumers. Additionally, the rise of food delivery services, driven by platforms like Pedidos Ya and Uber Eats, is growing rapidly. Panama’s diverse population also means there is a broad appetite for international cuisines alongside local dishes.

The restaurant business in Panama can be profitable, with margins typically ranging from 5% to 15%. Quick-service restaurants generally enjoy lower costs and higher turnover, while fine dining establishments can command higher checks but face greater competition and overhead.

There are several opportunities for new competitors in the market. The tourism sector, with Panama as a key tourist destination, creates demand for unique dining experiences, particularly in high-traffic areas like Casco Viejo. There is also room in the market for mid-range dining options that provide quality food at an affordable price. Finally, innovative dining concepts, such as sports-themed or social dining experiences, are becoming popular and present an opportunity for differentiation.

However, new entrants should be ready to face some challenges. The market is competitive, especially in urban areas, and differentiation is key. Additionally, navigating Panama’s regulatory environment, including licensing and labor laws, can be complex. Labor shortages and high employee turnover are also concerns in the restaurant industry here as they are in most countries.

If you are interested in the tourism sector in Panama or any of these events, contact your local U.S. Commercial Service office in the U.S. or contact Fabiana Ortega, Commercial Specialist in Panama by email at Fabiana.Ortega@trade.gov.