Cottage Food Laws for Bakery Business - Explained - Baking Business Legality
How do you know if you are running your home baking business legally?
What are Cottage Food Laws for bakers?
Let’s get to the bottom of Cottage Food Laws for Bakers.
In the US, there are now laws in almost every state, called Cottage Food Laws, that help to govern the sale of home baked and produced food goods.
Up until recently, most home based food sales were restricted. The passing of the Cottage Food Laws is a big win for home based bakers.
Cottage food laws exist in every US state, with the exception of New Jersey, where homebased food sales are not allowed at all. (Just putting this right up top, in case you reside in NJ).
Cottage food laws range from VERY strict to VERY vague.
When we think about the legality of home based food sales, we need to consider:
Where the food is sold
What type of foods are allowed
How much a home business is allowed to make in profit or sell
What labeling is required
What additional requirements and restrictions exist
Cottage food laws are not the ONLY legality you need to keep in mind, when running your home baking business.
Before we dive in, please also note that each and every location may have additional laws and restrictions on home food sales, such as:
zoning requirements
sales tax
county/state/city registration
business licence requirements
insurance requirements
home inspection requirements
etc
Bakers from all over the US will have different laws to abide by, and many have the opportunity to bake and sell from home, utilizing the Cottage Food Laws.
It is important to remember that ALL the information given in this post is for educational purposes only.
YOU need to double check your current laws in YOUR area, to make sure you are legally operating.
Contact your local Chamber of Commerce, Municipal Center, Department of Agriculture, Department of Health, State Office, or Department of Business, to find out how to get ahold of your current legal requirements.
1. Why do Cottage Food Laws Exist?
Cottage food laws are in place to make sure that businesses run from home are held to standards decided on by the state.
In essence, the cottage food laws are supposed to protect consumers.
In some cases the laws may seem down-right silly in your area, and the best we can do is learn about them, and do our best to run our businesses, while staying legal.
If you feel your laws need to be changed, you have an opportunity to bring this up with your local government and instigate change for you and all other home bakers.
2. Do YOU have to follow cottage laws?
The short answer is Yes.
If you plan to sell food from your home, meaning taking money from ANYONE in exchange for goods and services, your are running a business and should adhere to the Cottage Food Laws for Business.
Are you only selling to family and friends?… That’s a business.
Are you taking money but only covering materials?… That’s a business.
ANY exchange of funds = business.
If you live in an area with laws, you are required to follow them. Period.
If you decide to not follow the laws in place, you run the risk of being shut down by consumers or other businesses. Your location could administer fines or punishments, etc.
If you feel like you can not follow your local home baking laws, look into the following:
shared commercial kitchen space
Dept of Ag or church commercial kitchen for rent
constructing your own separate home commercial kitchen
a commercial storefront option
a commercial food truck option
spearheading a local market or booth event, for home bakers to sell their goods
3. Where can you find information on Cottage Food Laws in the US?
Information is spread out ALL over the Internet, and can be VERY annoying to look through.
I am linking a Harvard PDF from 2018 for you here, compiling the Cottage Food Laws for the whole of the US.
You can also check the Forrager site, which may have more up to date information.
Download the PDF by clicking the button below, and make sure to take notes on the state in which you reside. Check the Forrager site for any updates.
You can also use this information if you are considering moving your business to a new state sometime in the near future.
4. FAQ about the Cottage Foods Laws
I have come across many Cottage Law FAQs inside my bakery business group, Bakery Business School, on Facebook.
If you aren’t already a member in the Bakery Business School, join HERE.
Q: My Cottage Law says that I can not do “online sales”. How am I supposed to run a business with no online presence?
A: That’s a good question! As far as I can say, I would think “online sales” means selling NOT in person. So if you plan to converse with a customer and hand your product off in person, that would not be considered an “online sale”. Secondly, many states do not allow shipping, so a true “online sale” wouldn’t be possible. If you are worried about crossing a line, I would suggest only advertising your products and services online without pricing, and require customers to contact you directly for pricing information. This will prove that you can not conduct any sales online without person-to-person interaction.
Q: My Cottage Law says that I can not use any dairy like milk or butter. How am I supposed to make yummy products if I am not allowed to use those items?
A: I agree that not using dairy could be a real problem for already existing recipes. The first thing you could do would be to sub vegan options, like plant based butters and nut milks, and see if you can build your recipes on those materials instead. Another option would be to look into commercial kitchen options (as mentioned above) to see if you can get in and continue to sell your dairy based products.
Q: My Cottage Laws and local laws are different. Which one do I follow?
A: I would list out all the requirement for both local and state. Your goal will be to follow all the laws simultanetously. If you are confused on any law or how the laws coexist together, you will need to meet with your local authority so they can clarify for you.
Q: I do not know what my local Cottage Laws are. What do I do first?
A: Look through the Cottage Food Laws Harvard PDF, and then contact your local Agriculture or Health Department, to clarify that the laws are still current.
Q: I live in New Jersey where home based food sales are not allowed. What do I do?
A: You will need to consider a commercial kitchen option that abides by the state laws. You can also work towards changing the laws in NJ, to be similar to the rest of the country. There is currently a grassroots movement of home bakers and chefs looking to change the state laws to include Cottage Food Laws.
5. Where do I go to verify Cottage Food Laws?
You may check your local laws in a variety of places, including:
Department of Health
Department of Agriculture
Chamber of Commerce
Municipal Center
Court House
Department of Agriculture’s Food Safety Division
etc
Simply take a moment to Google the phone numbers for these departments in your area, give them a call and take notes.
It may take a few calls to figure out what group can help you get the information you need.
Now that you have a grip on the Cottage Food Laws in your state, do you need some help putting your business plan together?
You may be interested in the The Bakery Business Guide, Part 1: Plan for Success.
In this course, you will be taken through my signature business model, where we will create things like a business plan, order form and networking plan.
Throughout the course, you will be given video and printable support, to simplify the planning and set up of your baking business.
We will cover subjects like name choices, positioning, policy and pricing tips.
Click on the button below for a free preview of the course, to see if it is right for you. The Bakery Business Guide, Part 1: Plan for Success
