This morning I had the opportunity to revisit the California Cottage Laws, also known as the California Homemade Food Act/AB 1616. I must admit that my understanding of the regulations were murky at best. However, this morning with the help of an attorney I now have a very clear understanding of the products that can and cannot be sold out of a home/non-commercial kitchen.
The California Homemade Food Act (also known as “AB 1616″) was passed in California on September 21st, 2012 and went into effect on January 1st, 2013. In general, Cottage Food Laws govern food preparation businesses that are operated from the home. They allow a person to legally bake and prepare non-potentially hazardous foods from their personal kitchens and sell them on a small scale, generally directly to consumers, farmers markets and in a very few states sales are allowed to restaurants and grocery stores.
The law is setup as a two-tier system, different levels of homemade food producers, depending on who they sell to.
- Class A cottage food operations can only sell directly to consumers in places such as a farmers market, a food stand, special events, or other similar venues.
- Class B operations can make direct and indirect sales. Indirect sales mean goods can be sold through third-parties, like stores or restaurants, but class B permits require a home inspection and cost more. A third-party retailer is defined as "one in which the food may be immediately consumed on the premises", such as a grocery store, bake shop, or restaurant. In fact, a restaurant may buy cottage foods and use them in their dishes, as long as it disclaims to the consumer that they are doing so.
California’s law, unlike most states, allows a broad spectrum of products (list of approved products), manufactured within the home, to be sold. The list of unapproved products is much shorter and includes perishable baked goods, pickles fermented foods, chutneys, juices carbonated drinks, Kombucha, meat jerkies. Additionally, the law allows vendors to sell their food products in almost any kind of venue, but they are limited to $50,000 of sales. Those limits have increased over time (it was $35,000 in 2013, and $45,000 in 2014) although future increases are not scheduled. Also, unique to California’s law is that it allows cottage food operations to have only one non-family employee.
Finally, there are some rather simple regulations about labeling those products that you'll need to know. Want to learn more? Contact us and we'll help you navigate all the rest of regulations and help you get your product to market.