Localized Agrifood Systems (LAS) are characterized by the concentration of productive units that develop cultures or activities of transformation with a relative specialization allowing them to obtain economies of scale. The dynamics of these localized systems sometimes involves diversification as a strategy to reduce their vulnerability to market changes. This study analyzes, under the LAS approach, the structure and operation of the system of panela (non-centrifugated sugarcane) production in Colombia, its dynamics and its capacity of adaptation to market changes, in sustainable and competitive conditions by means of productive diversification.