In Panama City, a quiet but transformative shift has taken place within the municipal market network, turning traditional public markets into platforms for sustainable urban innovation. Supported by catalytic seed funding from the Joint SDG Fund and the UN Food Systems Coordination Hub, the United Nations partnered with the Municipality of Panama to reduce food waste and promote circular economy practices. What began as a targeted initiative has grown into a much broader model for urban regeneration, positioning public markets as drivers of environmental innovation, social inclusion, and local economic development.
A major change has been in how food waste is handled. Unsold but still edible food is now redistributed to vulnerable households and community kitchens through partnerships with organizations such as the Food Rescue Foundation, while organic waste is converted into compost and other circular economy products. For market vendors, this has transformed the role of the market from a purely commercial space into one that actively supports both environmental sustainability and community well-being. The shift reflects a broader move across Panama’s markets from waste-generating infrastructure to systems of sustainability and solidarity.
The initiative, known as Sustainable Transformation of Public Markets: Circular Economy and Zero Waste, introduced innovative models of food recovery, composting, and biotechnology in municipal markets. It also created a regulatory innovation sandbox that brought together government institutions, private companies, market associations, universities, and civil society organizations to test new approaches and encourage systemic change. This collaborative process generated more than 50 potential partnerships and innovation pathways to strengthen circular economy practices in the market system.
Technology and data management were also central to the transformation. New digital dashboards and data systems were introduced to improve evidence-based management across the municipal market network, allowing city authorities to make real-time operational decisions and improve transparency. As a result, markets are increasingly being redefined not as aging infrastructure, but as dynamic spaces where food systems, entrepreneurship, urban culture, and environmental sustainability intersect.
The project quickly expanded beyond a pilot into a broad ecosystem of collaboration. Public institutions, including the Municipality of Panama, national ministries, and innovation agencies, joined with private-sector companies such as PedidosYa and Grupo Rey, as well as research and academic institutions including the Georgia Tech Innovation and Logistics Research Center, UDELAS, and the Smithsonian Tropical Research Institute. Together, these actors helped turn markets into spaces where surplus food supports communities, food waste becomes compost, and new circular economy enterprises can emerge. This has demonstrated that systems change is most effective when governments, businesses, communities, and knowledge institutions work together.
The transformation has also strengthened the cultural and social role of public markets in Panama City. As a UNESCO Creative City of Gastronomy, Panama City is using its markets to connect food systems with cultural heritage, tourism, and local entrepreneurship. Through partnerships with museums, cultural institutions, and gastronomy networks, markets are being revitalized as lively public spaces where residents and visitors can experience Panama’s culinary traditions, diversity, and identity. This has elevated markets beyond their economic role, making them central to the city’s cultural and tourism landscape.
One of the clearest indicators of success is that the initiative is already attracting new investment and replication. Following the pilot, Mercado San Felipe Neri and the Municipality of Panama committed nearly $1 million in public funding to continue the transformation, including expanded circular economy practices, energy efficiency, and sustainable infrastructure upgrades. The model is already spreading to MercaPanamá, the country’s largest wholesale market, which has begun implementing its own circular economy strategy inspired by the project. International development banks such as the Inter-American Development Bank and CAF are also exploring opportunities to support further expansion, showing how small catalytic funding can unlock much larger investment flows.
Panama’s experience demonstrates that municipal markets are powerful yet often underused entry points for food systems transformation and urban sustainability. Because markets sit at the intersection of food supply chains, waste management, livelihoods, culture, and tourism, transforming them creates wide-ranging benefits—from reducing food waste and greenhouse gas emissions to supporting small producers and strengthening local economies. With relatively modest initial investment, Panama has shown that public markets can become scalable platforms for circular economy innovation, climate action, and inclusive economic growth.
The next phase is replication. Municipalities across the country, including San Miguelito, are already exploring how to adapt the model to their own contexts, especially in areas facing serious waste management challenges. With strategic support from development partners, Panama’s municipal market transformation could become a regional example of how local SDG innovation can evolve from pilot projects into public policy, broader investment, and large-scale implementation. What began as a zero-waste initiative has become a multi-stakeholder movement, showing how local action can turn global sustainability goals into tangible results in everyday community spaces.
