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.

Sweet Chocolate, Bitter Price

Chocoholics, do you believe that chocolate could be the new caviar in the food world in 20 years?

Before looking into how much money you have to save in order to satisfy your next chocolate craving, it may be helpful for you to learn about how chocolate is actually made, from the cacao plant to a chocolate bar.

Chocolate Making

Because there are so many steps involved in the chocolate making process, here is a simplified chocolate-making 101 to help you understand where the costs of a chocolate bar may come from.

During the harvest season, cacao pods are harvested mostly in the West Africa and South America regions. The pods will then be transferred to facilities to be split open, and the raw cacao beans inside will be taken out for fermentation.  Fermentation usually lasts for 2 to 8 days. It allows the chocolate flavor of the beans to further mature. High quality cocoa beans often ferment for a long time, and the resultant chocolate products will have a subtle fruity taste. After that, the beans will be dried under direct sunlight then shipped to the chocolate maker.

Cacao Pod and Cacao Beans
Source: The Chocolate Fudge Cafe

The chocolate maker will roast the beans to bring out the real chocolate taste and color of the bean, much like the roasting process of coffee beans.  Then the beans’ shells will be removed in a winnower, becoming cocoa nibs. Next, the nibs will be ground to a thick non-alcoholic, chocolate liquor paste. From the chocolate liquor, several by-products will be made. By pressing the chocolate liquor, the cocoa butter will be separated from the chocolate presscake. The presscake can be grinded into cocoa powder after pulverization, and the cocoa butter will be poured back into another batch of chocolate liquor along with other ingredients such as sugar, milk, and vanilla to make chocolate.

The chocolate mixture then will be going under rollers to smooth out its mixture. After that, the chocolate will be kneaded in the conching machine; it may take hours to days until the chocolate gets to its desired flavor and texture. When it’s done, chocolate is tempered,and cool down to bring out its shiny appearance.  Finally, the chocolate will be molded and packaged.

Chocolate Prices Climbing

Now, after the short lesson, we understand the basic chocolate making process. Before anything can happen, we need to harvest cacao pods from trees. Turns out that's the part that drove up the chocolate price the most.

Looking at the following chart, we can see that the cocoa beans price has generally been rising since 2000. It rose from about $817 US dollars per ton in 2000 to a little bit over $3140 US dollars per tons recorded in 2011, that’s almost a 400% increase!  

Source: The International Cocoa Organization (ICCO)

So, what are the possible reasons behind this outrageous increment? One obvious reason would be that the El Niño weather pattern occurred in the winter in 2009, resulted in the water being warmer than usual in the Pacific Ocean. The year after, its counterpart La Niña brought dryness to the West Africa region which largely affected the harvest of cacao as about 70% of world supply comes from there.

Also, the West Africa region is politically unstable.  With Cocoa bean production centralized in Cote d’Ivoire and Ghana, any incident related to the trade of cocoa beans would bring fluctuation to the world price of cocoa. An example would be the ban on cocoa export from Cote d’Ivoire in early 2011, which resulted in cocoa price peaking to $3410 US dollar a ton.

Moreover, with the decreased demand of chocolate from Europe (yes, the sweet-toothed consumed less chocolate because of their economic condition), and the less profitable cocoa powder, many European cocoa grinding plants slowed down their production. As a result, the price of cocoa butter, a by-product of cocoa powder, increased 65%. Due to that fact, as both cocoa powder and butter are essential ingredients in chocolate, it's price was driven up.  

Who is Affected?

Seeing the rising price of chocolate, many consumers switched to lower-grade chocolate products instead of premium chocolate.  A 118-year-old hot chocolate shop in Madrid, Spain called Chocolatería San Ginés, was one of the premium chocolate shops that suffered. Their afternoon manager, Enrique Macas, said that the customers now want the “cheapest thing” as chocolate is expensive and the employment rate in Spain is not so bright either.

San Ginés' Signature Churro with Chocolate
Source: San Ginés

Other than individual consumers, bakeries and pastries’ stores also find ways to cut down their expenses on chocolate. The owner of DaCapo’s Pastry Café in Houston, Lisa Biggerstaff, stopped using high-end, top quality chocolate syrup for their coffee. Some other bakeries also focus on selling non-chocolate-flavor sweets to cut down their cost.   

Yet, some people may still choose to live with the rising chocolate price such as those conscious about the health benefit of dark chocolate and high-end pastry shops as quality chocolate is more of a necessity for them.  

Future Trends in Chocolate Price

Since mid-2011, we see a dropping trend of chocolate price, and it seems to have the potential to bring us back to under $2000 per tons which it hasn't achieved for a while.  Its main reasons are that there is no signal of the El Niño effect coming back this year and the “concerns over chocolate demand pressured the market”.  When there is such concern, many chocolate manufacturers rather lower the chocolate price themselves to keep demand on a higher level. Hopefully we will not have to buy chocolate at its peaked price in 2011 for a few years until the next El Niño hits. 

Artificial Sweeteners: Take Them or Break Them?

When you order coffee in a restaurant, and you reach to grab a pack of sugar, it’s likely that you will get some kind of artificial sweeteners such as Sweet n Low or Equal besides regular table sugar. Perhaps you have heard of them, or you may even be a user, but do you know what they really are and whether they impact your health?


What are Artificial Sweeteners? 
They are zero calorie sugar substituting chemicals that are widely used in many foods and drinks such as candy, baked goods, gum, juices and soft drinks. All of them have very intense sweetness of at least 150 times sweeter than sugar. When consuming within an appropriate amount, artificial sweeteners can reduce probability of many health issues such as diabetes, obesity and heart diseases.

Many Different Kinds of Artificial Sweeteners are Sold in Store

Source: Sweet Rehab

There are many artificial sweeteners available commercially. All artificial sweeteners need approval from The US Food and Drug Administration (FDA). Currently, five artificial sweeteners have received FDA approval- Acesulfame, Aspartame, Neotame, Saccharin, and Sucralose. Stevia is often used as an artificial sweetener as well, but since it’s actually a plant, it doesn't need FDA’s approval. In addition, before they can be used to prepare food, they have to be “generally recognized as safe” (GRAS) as food additives, which means the FDA agreed that if they are consumed within an appropriate amount, they are safe and non-hazardous for the public. In the following table, we can find the corresponding brand names for each sweetener.

Common Artificial Sweeteners and Their Trade Names

Source:American Diabetes Association

What are benefits of using artificial sweeteners? How do they compare to natural sugar?

According to Fox News, people spent more than 9 million dollars on artificial sweeteners in 
2010 alone. Apparently, the sweeteners were attractive. So, what are the benefits they bring? Why are they better than sugar?
       
Reduce risk of and manage diabetes
Excess sugar and carbohydrate is the main reason of diabetes. Because artificial sweeteners don't contain any sugar, they don't rise blood glucose level and can satisfy people’s sweet craving at the same time.
       
Reduce obesity and help weight losing
As artificial sweeteners don't have any calorie, they are ideal for whom try to lose weight. For example, each teaspoon of sugar contains 16 calories; a regular soda has 8 teaspoons of sugar, which is 128 calories. If one cuts one can of soda each day, he can lose 13 pounds of weight in one year. Also, reducing obesity can decrease the risk of other issues such as high blood pressure and stroke.
       
Prevent teeth decay
Because artificial sweeteners are not broken down by saliva and bacteria in our mouth like sugar does, they do not contribute to cavities. One of the artificial sweeteners, Saccharin, is actually added to some toothpaste to give them a sweet taste. 
       
Any health concerns bring by artificial sweeteners?

People in different decades have debated whether some artificial sweeteners cause cancer. Over the years, many lab studies have proven that most of these substances are in fact safe for us to use. The followings are some of the cases.

Aspartame
There is a myth saying that Aspartame is cancer-causing. A report published in 1996 stated that, the use of Aspartame might had caused brain tumor. Yet, National Cancer Institute statistics report found that, brain tumor rate began to rise in 1973, which was 8 years before Aspartame was approved by FDA. So there was not enough evidence to conclude that Aspartame is related to brain cancer.

Saccharin
In 1970s, it was related to the cause of bladder cancer, but further study showed that it only happened on rats, which the saccharin was tested on in the laboratory. Since the body structure of rats is different from human, there was a higher chance for rats to get cancer from consuming saccharin, but it doesn’t apply to human.


Some people are also concerned whether artificial sweeteners would bring negative effect to our body after they are broken down during digestion. Are we really consuming extra chemicals from artificial sweeteners? On the Aspartame resource center website, one article talks about an interesting fact about Aspartame: during digestion, aspartame is broken down into aspartic acid, phenylalanine, and methanol then enter your bloodstream. If you don't have a science background, you may find these words terrifying. But in fact, these are chemicals that present in the foods you eat every day. The following chart sourced from the U.S Department of Agriculture can further demonstrate this point:

Amount of Aspartate and Phenylalanine Present in Different Foods

Source: U.S Department of Agriculture 

Apparently, in this case, aspartame only produced very a limited amount of other chemicals, which the amount is significantly lower than even a large cup of milk. This tells that despite there are chemicals from the sweetener, they are rather safe and don’t really negatively impact our body.

How About the Taste?

Different artificial sweeteners taste differently for different people. Some of them may leave after-taste in foods. Several sweeteners such as Sucralose and Acesulfame Potassium are heat-proof and can be used in baking and cooking. Yet, since artificial sweeteners don't have identical taste, users may need to modify the recipe, try out different sweeteners, or make a blend to get the best result.

 Here is a video of someone doing a taste test, trying to find out which sweetener has the most similar taste with table sugar.

After all the information above, it’s quite convincing that artificial sweeteners bring no harm to our health. People with health issues may strongly consider replacing sugar with the sweeteners in their diet. However, if you have sensitive taste buds, you should experiment with the many kinds of sweeteners to find out your favorite.