March 31, 2011

New Laws May Allow for Home-based Food Businesses

Times they are a changing!  Until recently if you wanted to start a food business you had no choice but to rent or build out a commercial kitchen before you could get started – neither of which is cheap.  Some states though have passed laws that may make it possible for you to start your small food business in the comfort of your own kitchen.  

Loosely known as Cottage Food Laws, there is a movement across the U.S. to allow home-based food businesses to be licensed and sell their products to the public.   On it’s face value this is wonderful news to anyone who has ever wanted to start a small food business but hasn’t wanted to commit to the cost of renting commercial kitchen space.   Currently, the following states have passed Cottage Food Bills: Arkansas, Iowa, Kentucky, Maine, Massachusettes, Michigan, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Utah, Vermont, Virginia, WyomingAlabama and Indiana also allow bakers to make products in their own kitchens for sale exclusively at farmers’ markets. 

While each state differs somewhat, in most cases production of food at home is limited to non-potentially hazardous products which may include, depending on the state, baked goods that don’t require specific storage temperatures, pickled products, jams, jellies, and other items such as granola, and candy.   Before you get too excited though be sure to read the fine print for your state.  Some states require that your home kitchen be licensed by a health department official while others let you operate out of your kitchen without any oversight.  Some won’t allow kids or pets in the same facility as your home kitchen which is not too feasible if you have kids or pets in your home (and plan on keeping them!).  Some limit where you can sell your products and others put limits on how much revenue your business can bring in during a year which, after you take out your costs, may not make it profitable for you.

A handful of other states, Arizona, Florida, Illinois, New Jersey, South Dakota, and Washington, have similar laws pending in their legislature right now.  Advocates argue that allowing small food producers to utilize their own kitchens will create jobs and businesses, promote locally-produced goods, and help the economy grow.  On the flip side, some argue that home based kitchens have a higher likelihood for passing along food borne diseases if they aren’t kept to the same high standards as commercial kitchens and bakeries (though it’s often noted that Iowa, which instituted cottage food laws back in 2005, has had only one instance in food poisoning from a home-based kitchen since the law was enacted).

All in all, while these cottage food laws don’t take out all the obsticles to starting a food business, it does provide entrepreneurs with some new options.  This is certainly a great option to anyone just starting out who wants to test the market without committing to renting commercial kitchen space – assuming of course that you live in one of the above states!

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