Cottage Food Laws on the Rise

In a Maine airport shop, I beeline for the local food souvenirs, my eye roving from a set of Stonewall Products over to several local blueberry jams. More than I expected, in fact. One comes from Out on a Limb, a small home jam-making operation that got started thanks to Maine’s cottage food law.

Today about 31 states have so called “cottage food laws,” allowing legal home-based food production on a small scale. The alternative is renting a commercial kitchen, which can cost $10 per hour, more often $25 or higher. Many of the laws passed recently thanks to grassroots efforts by bakers and jam makers eager to generate extra income, build a food community, control their cooking environments, and/or work at home. State guidelines differ, usually prohibiting riskier foods such as refrigerated items.

As a petition gathers momentum in California, along with a Facebook group, I took a look at the challenges and success of a few food entrepreneurs operating under cottage food laws in a time where local food reigns and career “Plan Bs” have become more like Plan A.

In most states, proponents have faced uphill battles. Two key objections tend to pop up:

It’s not fair to businesses that invest in commercial facilities.

As with the food truck versus restaurant battles, yes it’s more competition. I was thinking about a baker in Los Angeles who makes beautiful decorated cookies out of her bakery. If suddenly hundreds of home bakers could do the same without the overhead costs she might possibly need to drum up more commercial business to keep the bakery going.

But it’s also worth looking at the positive economic impact. Denay Davis, who runs a resource website for home bakers, believes “little food crafters are simply not a threat. It’s about sharing with other people, having control, and building relationships–not making a killing.” Etsy sellers exemplify typical cottage food law businesses, although many states only allow selling homemade goods locally, not online.

Retirees can supplement limited incomes. “If this was my only income I’d be earning about 40 percent of what I need. I didn’t have to make any capital investments. It’s a nice retirement job for me,” said Beth-Ann Betz, who bakes Middle Eastern pastries.

The laws also help those needing gluten-free or nut-free environments. “We’re gluten-free at home,” says Michigan baker Julie Rabinowitz. “So it’s easier to bake with confidence at home, without having to pay hourly to scrub someone else’s kitchen free of gluten.” The Michigan law caps her Tasty Sans Gluten sales at $15,000. It’s a delicate balance as commercial kitchens can run $12,000 a year. “My farmers’ market customers worry about price increases when I move to a commercial kitchen,” she adds.

Anni Minuzzo, California food consultant and former biscotti company owner, likes the idea of a cap. “It’s more fair to businesses who start out paying for a kitchen.” A cap also forces those who have outgrown their home kitchen to expand. Lori Jordan knows that “in the future if we want to grow beyond New England, we will have to move to a bigger place and hire more people.”

It’s not safe and clean.

The laws generally require the same FDA Good Manufacturing Practices required by larger food businesses. Many call for ServSafe food safety certification, no pets, and defined cleaning procedures (see Arizona‘s law). “New Hampshire has a good model,” says Betz. “I have a dishwasher, clean water that is tested, and ServSafe certification.”

Kelly Masters, owner of Cake Boss software, started her Texas cake business at a kitchen the Health Department had scored highly. But, she says, it “was so unclean that I would sometimes come home crying. I didn’t even want to sell cakes I made there.” Kelly went on to advocate a Texas’ cottage food law (passed September 2011).

Several years ago, Davis contacted all the departments of agriculture. “None had received sickness reports,” she says, adding that with very small batch production in all likelihood only a few people might be affected. Most or all states require a label to the effect of “made in an uninspected home kitchen,” letting the buyer beware.

“Maine requires us to have the same inspections, insurance, and file all the same paperwork as if we were a commercial kitchen,” says Lori Jordan of Out on a Limb.

One retailer who has seen a few questionable home food processors feels the rules should allow for spot inspections, unannounced–resulting in self-regulation. Could a new industry for a third-party inspection services arise, contributing further business license and tax revenues?

Realizing the economics of starting my own food business didn’t add up, I agree getting started on a small scale at home makes sense while proving the market. Seeing an array of local jams at the airport rather than only brands you can find everywhere makes a place special and keeps the home fires burning.

Need further inspiration to get your home-based food production business up and running? See also the San Jose Mercury News article on the California petition and this article on how to advocate for a cottage food law in your state.