Panama is one of the most dynamic countries in Latin America, with an estimated growth of 7.5%, and an enormous increase in tourism, therefore the hotel and restaurant business represent a great opportunity for U.S. food exports.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Required Report - public distribution
GAIN Report Number:
Food Service - Hotel Restaurant Institutional
HRI Report for Panama 2011
Kevin N. Smith
Maria V. Guardia
Panama is one of the most dynamic countries in Latin America, with an estimated growth of 7.5%, and
an enormous increase in tourism, therefore the hotel and restaurant business represent a great
opportunity for U.S. food exports.
I. Market Overview
Panama has become the most dynamic country in Latin America. It ended 2010 with a very
healthy economy and it is expected that this economic growth will continue or even surpass the 7%
of 2010. The Economic Commission for Latin America and the Caribbean estimates a 7.5% growth
Most of this growth is based in major works such as the Panama Canal expansion that has
created more than 8,000 new jobs, the start of the construction of a major metro system for Panama
that includes a complete reorganization of the road system that is expected to improve and change the
face and the way of mobilization of Panama City.
Among those economic factors of growth, Tourism represents a high percentage of said growth of
approximately 9.6 for 2008 and 9.7 for 2009 as per last available statistics below:
Even though world economic crisis lowered this increase to approximately 2% in 2009, the
number of visitors has been increasing considerably and hotels and restaurants have experienced an
increase of approximately 6.2% within the last year, and it is expected that this growth will continue
throughout 2014. The various factors that have contributed to this increase are: the creation of new
ports, the designation of Panama as a home port for several cruise companies such as Royal
Caribbean and the Spanish cruise line Pullmantur, resulting in more cruises arriving and/or departing
from Panamanian ports; the improvement of world economic situation especially in the United States
and Canada. Also the continuous immigration of American, Canadian and European retirees that
move permanently to Panama or live half a year in Panama and Venezuelans, Colombians that have
made Panama their temporary residence. With the creation of Law 41 of 2007 relating to
Multinational Enterprises, companies from these countries have established their regional hubs or
headquarters in Panama, bringing in their executives and other employees with their families, earning
high incomes, thus creating a good opportunity for variety and high value products. Examples of
these companies are Dell, Maersk, Procter and Gamble, Caterpillar, Mars, Adidas, SAB Miller,
among others. There is also a new category called medical tourism, comprised of foreigners that
come to Panama to receive first class medical treatments at fairly reasonable prices as compared to
the United States.
This large conglomerate of different nationalities that either visit or live in Panama as tourists
or temporary residents, also creates the framework for a wide variety of restaurants with an ample
offering of international and ethnic foods. In Panama you may find restaurants of all kinds and
specialties as in any major cosmopolitan city in the world.
As far as import requirements are concerned, there is a Sanitary and Phytosanitary
Equivalency Agreement that was approved as part of the TPA negotiations that has substantially
reduced import requirements for U.S. food products. Also, very few labeling requirements are
enforced in Panama. For more information on these two topics please refer to our FAIRS report of
December 30, 2010, Gain Report No. PN10009.
II Market Structure
Panama has begun a very aggressive promotional campaign for Panama as
a tourist destination and infrastructures are being improved and developed to accommodate the
expected increase of visitors. Panamanian airline Copa has the only hub of the Americas in Panama
City managing connections throughout the region from Panama City, and they are constantly opening
new routes. Besides that, the number of international airlines with a presence in Panama is
increasing. Most U.S. international airlines such as American Airlines, Continental and Delta, fly to
Panama. KLM increased their numbers of flights from Amsterdam to Panama. Other international
airlines with presence in Panama are Tame from Ecuador, Condor from Germany; Iberia from Spain,
and Curacao Antilles Express have direct flights to Panama and next year it is expected that Qantas
from Australia, Eva Air from Taiwan, and All Nippon Airways from Japan will also be flying to
A new multimodal hub center will also be built by Gulf Coast Biloxi at the Panama airport.
The Government of Panama is also remodeling the airport and building an airport city in a property
of approximately 300 hectares adjacent to the airport. Also a new Convention Center, as Panama will
host during the upcoming two years, approximately 48 international conventions and congresses,
twenty of which will have more than one thousand participants.
Panama City currently has approximately 77 hotels, and six under construction. Total
number of available rooms in the country, counting beach resorts is approximately 17,000. Most
major U.S. and international hotels are present in Panama such as Marriott, Bristol, Country Inn,
Sheraton, Radisson, Holiday Inn, Intercontinental, Riu, to mention a few. Relatively new tourism
resorts are also established and being developed in the Panamanian coasts and islands such as Melia,
Decameron, Avalon, Nikki Beach, Breezes, Bristol, etc.
Restaurants in Panama City are very well developed and highly ranked. There are no
statistics as to the current amount of restaurants in Panama, but as mentioned before due to increase
in tourism and the large number of international immigration, and the fact that Panama?s middle and
high income population is pretty sophisticated, the selection of restaurants is ample with cuisine
specialties such as:
International and Spanish
International and Italian
International and French
International and Seafood
International and Swiss
Authentic Panamanian and International
There is a large number of catering service companies and food franchises such as T.G.I.
Friday?s, Bennigan?s, KFC, Domino?s Pizza, Pizza Hut, Dairy Queen, Crepes & Waffles, Church?s,
Dunkin? Donuts, McDonald?s, Burger King, Popeye?s, Subway, Quiznos, Wendy?s, Baskin Robbins,
Sbarro?s, Sushi Itto, Cozi, Salad Creations, Papa John?s, Pizzeria Uno, Macarroni Grill, Little
The institutional segment, includes hospitals, school cafeterias, correctional facilities and
government institutions, which are privately owned or under concessions.
An interesting note on Food Service in Panama is that besides supplying hotels and
restaurants they also serve a large number of ships that transit the canal and purchase food supplies in
III. Market Access
Panama has an open economy and has few market access problems. U.S. products enjoy a
high quality image and are well accepted. Import duties are reasonable and customs clearance is
relatively fast and straightforward. Most of these duties will be reduced when the TPA between
Panama and the United States is approved. It has a dollar based economy, good transportation
infrastructure and telecommunications systems, modern ports and excellent access to shipping and air
One of the most common market entry options is to appoint an agent or distributor or finding
a local partner who can provide market knowledge and contacts. Licenses or Franchises are also
popular in Panama.
There are no strict distributor protection laws. General commercial law will govern contracts
or relations between vendors or suppliers and the local company, person or distributor. Distribution
services are mostly governed by private agreements among the parties.
Local laws also allow companies and individuals to import directly with no intervention from
agents or distributors.
Most Panamanian importers are fully bilingual, and business practices in Panama are very
similar to those in the United States. Business tends to be direct and straightforward.
It is advisable to have a Distributor and/or a Customs Broker with experience.
The exporter should coordinate with the importer how to protect and register the product
It is worth noting that price is an important factor to consider in the Panamanian market.
Even though there is a small percentage of the population more interested in quality and trend-setting
goods, price is still an important factor for the great majority of the population.
For further details you may also read our 2010 Exporter Guide Report, GAIN Report No.
Major competitors for U.S. Products may be divided by product and/or
better tariffs due to Free Trade Agreements signed with other countries such as
Canada, European countries, Peru, Guatemala, Costa Rica, Chile and Taipei China (Taiwan).
Strong competitors for snacks and processed foods are Central America and China. For fruits
and other products: Chile, Mexico, and Peru. For grains and oils: Argentina, Canada, and Brazil.
For meat: Canada. For Dairy products: Costa Rica, Argentina, New Zealand, and Australia.
V. Best Prospects
High value products offer good market opportunities in Panama, specially
ready-made or convenience food, wholesome and healthy products. As a whole, best
prospects for U.S. Food Exports to Panama are bulk commodities such as yellow corn,
paddy rice, soybean meal, wheat flour, as stated in our 2010 Export Guide Report of
December 30, 2010, GAIN Report No. PN10010. Fresh fruits such as apples, grapes,
peaches, nectarines and pears, organic foods, processed fruits and vegetables, such as
mixed vegetables, mixed fruits, yellow sweet corn, peas, mushrooms, and beans are
also very popular in the Panama market.
A list of favorite imports from the HRI sector includes:
Pre cooked potatoes
Frozen or Ready-made Food
As far as hotels and restaurants are concerned, Panama City is pretty well
Developed; however, beaches and other smaller towns in the country still offer a great
opportunity for growth and development in this area.
VI. Entry Strategy and Recommendations
Appointing a local representative, distributor or commission agent may be
a good option to enter the market. They could carry product promotions,
follow-up orders, etc. Direct sales to smaller importers/retailers is another
Panama is the region?s major banking center with more than 70 national
and foreign banks and credit may be obtained at competitive market rates. U.S.
vendors will usually grant credit terms of 30 to 60 days net to established
companies with at least three U.S. trade references. Other payment methods are
letters of credit and advance payment via wire transfers or bank drafts. There are
several international credit information services such as Dunn & Bradstreet with
updated ratings of major distributors. Local credit references can be obtained
from the Asociacion Panameña de Credito (APC) by affiliation or a service fee.
Sales are conducted with a variety of payment terms including 30 to 90 days
credit. Most commercial establishments accept credit cards for retail sales.
There are no exchange rate risks in Panama because Panama is a dollarized economy since
1904. It is also worth mentioning that Panama received an investment rate from Fitch Rating of
BBB-, Moody?s Baa3, Standard and Poor?s BBB-.
The marketing channel structure in Panama is simple. Direct importers act as wholesalers
and sometimes even as retailers.
Most of Panama?s trade moves through the Atlantic ports of Manzanillo, Cristobal or
Evergreen, on the Pacific through Balboa, and air cargo is handled through Tocumen International
Panama has the higher per capita income in Latin America, but while the majority of
Panamanians are interested in quality, price still plays an important role in the purchase decision.
Television and newspaper advertising are the best promotion tools for the promotion of U.S.
Products. E-mail marketing is also becoming increasingly popular. Trade shows, seminars and
exhibitions are also very effective tools for trade promotion.
Major local newspapers recommended for promotions are:
La Prensa: http://www.prensa.com
Panama America: http://www.pa-digital.com.pa
La Estrella de Panama: http://www.estrelladepanama.com
Import product prices are based on CIF value plus any existing import taxes, custom agent
fees, in-country transportation costs, and other product-related costs such as change of label. The
pricing usually excludes U.S. domestic marketing costs, allowing more competitive and attractive
prices in the Panamanian market.
VII. Contact List
1. U.S. Embassy Commercial, Agricultural and Trade-Related Contacts
U.S. Department of Agriculture (USDA)
Foreign Agricultural Services (FAS)
Phone: (507) 207-7297
Fax: (507) 207-7163
Mr. Kevin Smith, Regional Agricultural Counselor (based in San Jose, Costa
Ms. Kelly Stange, Regional Agricultural Attaché (based in San Jose, Costa Rica)
Miss Arlene Villalaz, Agricultural Specialist for Panama
Ms. Maria Victoria Guardia, Administrative Assistant for Panama
Economic Section, U.S. Department of State
Embassy of the United States of America, at Panama City
Jonathan A. Plowman, Counselor for Economic Affairs
Tel: (507) 207-7301
U.S. Commercial Service
Tel: (507) 207-7000
Fax: (507) 317-1658
Mr. Daniel Crocker, Senior Commercial Officer
Tel : (507) 207-7388
2. Public Institutions:
Autoridad Panameña de Seguridad de Alimentos (AUPSA)
Panamanian Food Safety Authority
Dr. Alcides Jaen, General Administrator
Tel: (507) 522-0005
Fax: (507) 522-0014
Web Site: www.aupsa.gob.pa
Ministerio de Comercio e Industrias,
(Ministry of Commerce and Industries)
Mr. Roberto Henriquez, Minister
P.O. Box 0815-01119
Panama, Republic of Panama
Tel: (507) 560-0661
Fax: (507) 560-0663
Web Site: www.mici.gob.pa
Ministerio de Desarrollo Agropecuario,
(Ministry of Agricultural Development)
Mr. Emilio Kieswetter, Minister
P.O. Box 0816-01611
Panama, Republic of Panama
Tel: (507) 507-0603
Fax: (507) 232-5045
Web Site: www.mida.gob.pa
Ministerio de Salud,
(Ministry of Health)
Dr. Franklin Vergara, Minister
P.O. Box 0816-01611
Panama, Republic of Panama
Tel: (507) 512-9100
Fax: (507) 512-9240
Web Site: www.minsa.gob.pa
3. American Chamber of Commerce and Industry of Panama (AmCham)
P.O. Box 0843-0152
Panama, Republic of Panama
Mr. Maurice Bélanger, Executive Director
Tel: (507) 301-3881
Fax: (507) 301-3882
Web Site: www.panamcham.com
4. ACOVIPA - Panamanian Association of Importers and Distributors of Food
Mr. Rigoberto Gonzalez, Executive Director
Tel: (507) 236-2459
Fax: (507) 236-9163