Cottage Food: A Step Towards a Law

“All food businesses start in a home kitchen,” said Shakirah Simley at a recent Kitchen Table Talks in San Francisco. Her statement is a simple reflection on the ethos driving the recent cottage food legislation in California. Abuzz among the craft food community for months, the California Homemade Food Act (AB 1616) passed the Assembly Committee on Health on April 17th in a unanimous vote of support by all 15 committee members.

With widespread support by almost 60 organizations and businesses who have already written letters to the California legislature, including Bay Area institutions La Cocina, Garden for the Environment and Rainbow Grocery, the legislation was the subject of the Kitchen Table Talks discussion at 18 Reasons, co-hosted by SPUR. Richard Lee, the Director of Environmental Health Regulatory Programs at the San Francisco Department of Public Health and Christina Oatfield, Food Policy Director at the Sustainable Economies Law Center–which introduced the bill–joined Simley in discussing the implications of the legislation on California’s growing number of food entrepreneurs.

A Climate for Entrepreneurship

The California Homemade Food Act, introduced in February by Assemblyman Mike Gatto, frames itself as a response to the prevalence of obesity, lack of access to nutritional food, and power of small businesses to supplement income and create jobs in igniting our economy. In doing so, it creates a new classification system to define a “cottage food operation.” Establishing this new “cottage food operation” addresses the barriers to entry for a food entrepreneur by exempting them from the existing Sherman Law, which regulates the manufacture, sale, labeling and advertising activities related to food, drugs, devices and cosmetics, and the California Retail Food Code, which regulates the health and safety standards for retail food facilities.

For a craft food entrepreneur, for whom AB 1616 would allow to sell non-potentially hazardous foods to the public out of their home kitchen, the largest barrier to entry lies in the cost and logistics of working in a commercial kitchen space. As Simley relayed, graduating from the home kitchen is not something that you do until you are “physically, mentally or financially ready.” When her artisanal jam company moved from her home kitchen in Oakland to a commercial space at La Cocina, it required huge adjustments to scale up production properly and feel comfortable making food with new equipment in a new space, surrounded by the bustle of other food entrepreneurs.

Of course all food entrepreneurs realize that working out of a home kitchen, as homey as it sounds, will never be permanent situation. The low margins inherent to the craft food business, and hence the economies of scale required to make a decent profit, will not be properly housed by the same kitchen that makes your scrambled eggs. The key lies in the opportunity for budding entrepreneurs to be able to test the market and assess the viability of a potential full-time food business operated outside of their home.

Public Safety

Even with the exciting energy exists around crafty creations and tales of entrepreneurship, there exists a framework of established public safety regulations which the AB 1616 must fit into. Richard Lee of the SF Dept. of Public Health (DPH) voiced his candid concerns on the subject of “cottage food.” The DPH exists to protect the public from food borne illnesses. Lee’s department tirelessly deploys a relatively small staff to inspect over 6900 food facilities each year. Lee voiced concerns about the lack of regular inspections at home kitchens, which are not built for commercial food production.

In the revised bill, passed by the Assembly Committee on Health on April 17, regular yearly inspections (~$200-400/yr) will be required for those selling through third party retailers (eg: grocery stores, cafes, etc.), but those selling direct to consumers (farmers’ market, CSAs) will be inspected only when there is a consumer complaint. All “cottage food operators” will need to register with the DPH (fee TBD) and complete a self-inspection checklist for standard food safety operating procedures, in addition to completing a food handler’s safety course ($15).

One of Lee’s other concerns lies in scaling up. As demand for that tasty sauerkraut grows, the pickler will have to scale their production to meet demand. When working out of a commercial kitchen, that simply entails renting additional kitchen hours, but in a home kitchen, health officials fear that without appropriate equipment, storage, and cleanable surfaces, the risk for food-borne illnesses or pest increases.

As a response to safety concerns, the bill mandates that home kitchens must abide by the safety principles that a commercial kitchen must abide by. Many of these principles revolve around keeping domestic and commercial kitchen use separate. Some states regulations in AB 1616 include: no small children or pets during production, prevention of rodents or pests, production only in permitted kitchen area, requirement to wash hands before and between tasks, and required potable water.

An Incubating Framework

Christina Oatfield, Food Policy Director for the Sustainable Law Economies Center (SELC), emphasizes that food safety can be scale appropriate. From the original draft of the bill, SELC and Congressman Gatto have worked with the Department of Public Health to address their concerns. In doing so, they aimed to create a bill that followed the framework for public health while adapting it to small scale home production.

They arrived at a bill that emphasizes established food safety guidelines and includes only non-potentially hazardous foods, requires traditional labeling standards (ingredients, allergens, weight, kitchen location) plus an indication that the product was made in a home kitchen, Food Handler certification, registration with the DPH, and permitting/inspections for selling to third party retailers. At the same time, the bill emphasizes homemade food production as a stepping stone, by establishing a sales ceiling of $50,000 per year. The emphasis on food safety training and scalable production, creates a walkable trail towards creating a viable food business by opening up new legal markets with a low barrier to entry.

Just the Beginning

Passing in the Assembly Committee on Health represents a huge first step for the California Homemade Food Act; the next vote is by the Assembly Appropriations Committee on May 2. After which the bill’s path goes through the full Assembly, then the Senate, and a final reconciliation of the Assembly and Senate’s bills before heading to the Governor’s desk.

Advocates for cottage food realize that even at the end of this road, we still are not accommodating many “potentially hazardous” food products under this first ‘cottage food law’ umbrella and that there exists further opportunities to emphasize and fund food safety and business development training for food entrepreneurs. In addition, the Bay Area lacks adequate shared use commercial kitchen space–each day the SF Small Business Development Center receives a call inquiring about a available commercial kitchens. Most food producers agree that the ‘cottage food law’ would open up a new entry point to the market, but the the end goal will always be to find an appropriate kitchen space to scale production, as Dafna Kory of Inna Jam did with her new commercial kitchen space. But as always, one step at a time.

It’s a long road, so stay abreast of the progress for this bill on the SELC website or on the California Bill Info website (search AB 1616). I also encourage you to read the full version of the revised bill AB 1616.

3 thoughts on “Cottage Food: A Step Towards a Law

  1. Pingback: Civil Eats » Blog Archive » Cottage Food: A Step Towards a Law | Food News

  2. Hooray ! A major step in the right direction towards what is needed for a true food revolution. Empowerment of the countless individuals that will be enabled to create appropriate competition to the standard outlets is essential. With this – our individual food actions and choices will multiply into a massive statement with no individual business or organization that can be attacked. We the people – we the cooker and eaters.

  3. Appreciate seeing the increasing interest in laws affecting farm business value-added enterprises. Trying to improve current rules here in Washington State – and possibly even getting some people with small farms to provide real life inputs Appear to have an opportunity to comment in late May. Typically, though not all, the rules seem to be more easily accomodated by Bigger Ag.