First you must create the custom menu and give it a name. Next, you will need to edit /home/<you>/.config/lxpanel//LXDE/panels/panel to add it manually.
I looked at the file
I am not sure this will work.
Fore sure you can add a menu item to the panel (you can also do that from the GUI, but it seems that lxpanel just reads the system menu.
let us take an example:
I have created 3 custom menus that are merged with the applications menu when the session starts, those menus must be placed in /etc/xdg/menus/applications-merged/"my-menu-name.menu"
let us take one specific example; i have the menu "Multimedia.menu" which has 4 child menus
How do I insert this in "panel" and get it to show as a cascading menu when I click on it??
if you know the correct syntax let me know
Mean while, I installed adeskbar from the repos, it has the ability to have what they call "drawers" which ore in reality small menus that you you add applications to. this will do nicely because I can have different drawers for different categories (MM, Sys, Documents, Favorites etc)
From a practical point of view, this will do for the time being. From a technical point of view, I would like to see if this can done in lxpanel