Starting a Business in Your Own Kitchen- California Cottage Food Act

Do you have a colleague who makes fantastic apple pies for sale at work? Have you ever paid a few dollars to the kid next door for his tray of fresh baked cookies? Perhaps the above scenarios are not strange to you. However, did you know that baked goods trading without a permit in California is considered illegal?

Prior to January 2013, California had a very strict homemade food law that disallowed a lot of amateur of bakers from selling their savory creations from home. A local beloved baker in Silverlake, California, Mark Stambler, was one of the thousands bakers that suffered from the old regulations. Having over 30 years experience of baking artisan bread , Stambler started to sell bread prepared in his home kitchen to local restaurants. However, the Department of Health came to stop him. It upset him as it was impossible for him to continue selling if he has to follow the law.

Mark Stambler with His Homemade Artisan Bread
Source: Assemblyman Mike Gatto's blog

According to Stambler, "If I want to sell bread in a store anywhere in Los Angeles County, I basically have to own a wholesale food processing facility. Period." No doubt, he states the concern of many other home bakery business owners. Before the new bills were passed, bakers were required to have a commercial kitchen which would cost at least a few thousand dollars in the Los Angeles area.

After learning about Stambler's story, Assemblyman Mike Gatto decided to help him as well as other potential small business owners. He drafted the new Cottage Food Act bill after working with some scientists, nutritionists and the government. The new bill was finally passed on September, 2012 and was effective as of January, 2013.

The New California Cottage Food Act

The new law allows small (at home) business owners to sell their homemade baked goods to others with a permit. The permit is classified into 2 classes: one permits the owner to only conduct direct sale with customers, and the other permits both direct and indirect sale, such as online transactions and selling to restaurants.

The cottage food act covers a list of foods classified as "non-hazardous". These foods do not contain cream, and aren't easily spoiled (bacteria is unlikely to grow even under room temperature). Here is the list:

Cottage Foods
Source:Barfblog

• Baked goods without cream, custard, or meat fillings, such as breads, biscuits, churros, cookies, pastries, and tortillas
• Candy, such as brittle and toffee
• Chocolate-covered nonperishable foods, such as nuts and dried fruit
• Dried fruit
• Dried pasta
• Dry baking mixes
• Fruit pies, fruit empanadas, and fruit tamales
• Granola, cereals, and trail mixes
• Herb blends and dried mole paste
• Honey and sweet sorghum syrup
• Jams, jellies, preserves, and fruit butter that comply with the standard described in Part 150 of Title 21 of the Code of Federal Regulations
• Nut mixes and nut butters
• Popcorn
• Vinegar and mustard
• Roasted coffee and dried tea
• Waffle cones and pizelles
• Other foods that the Director of the California Department of Public Health chooses to add

The application process for the permits is simple. There are no more complicated kitchen inspections. All you have to do is fill out an application form online, consent to the ingredients sourcing, agree to sanitizing and labeling rules, and finally pay the small permit fee then you are done with the registration procedure. Next, you will have to take an online food handler course (which lasts less than 2 hours) and pass a course related test. After that, all the procedures are complete and you are good to go!

Potential small businesses should be aware of two conditions in the new cottage food act. First, the act only covers small businesses with a maximum of two people in employment: the owner and one extra employee (exclude household's members that live in the home where the production take place). Second, the maximum income of this small business is $32,000 and it’s expected to grow to $50,000 in 2015.

Under current economic conditions, the new law may help many households to increase their income with just a small cost, to encourage  people to continue with what they are passionate about, and to provide potentially cheaper and a greater number of  food options for consumers. Thus, the households will continue to improve their lives with the higher income, which will also be beneficial for the economy as a whole.

The original bill document is rather long, but if you are interested in reading it, you are welcome to click here.