Signs you're reaching the limits of cottage food
Cottage food laws are written for small, local, mostly shelf-stable businesses. A business usually starts to outgrow them in one of a few ways:
- Sales are approaching your state's annual cap. The pricing and sales cap calculator can show how close you are.
- You want to sell wholesale or through stores, restaurants, or distributors, and your state doesn't allow it for cottage foods.
- You want to ship to customers in other states.
- Your product needs refrigeration, is acidified or canned, or contains meat, dairy, or juice, so it falls outside your state's cottage food rules.
Where you can make it
There are three common routes, and many businesses use more than one over time.
A shared or commissary kitchen. These are licensed commercial kitchens rented by the hour or month. They are usually the lowest-cost way to start, though you'll typically still need your own license or permit to operate there, and scheduling can be limiting.
Your own licensed facility. This gives you full control of your schedule and equipment, at a much higher cost for build-out, equipment, and inspections.
A co-packer. A co-packer, or contract manufacturer, makes your product for you under its own licenses. Co-packers often have minimum order sizes and may ask you to adjust your recipe for their equipment. A clear written agreement about your recipe and who owns it is important.
State and local licensing
Commercial food production is usually licensed by a state agency, often the department of agriculture or health, or by a local health department. Which one depends on your state and on whether you sell wholesale or directly to consumers. Expect an application, a plan review for a new facility, and inspections. Zoning approval, a business license, and sales tax registration are often separate requirements.
Federal requirements to ask about
Once you leave cottage food rules, federal food regulations may start to apply. Which ones depend on your product and how you sell it.
- FDA food facility registration. Facilities that manufacture, process, pack, or hold food for consumption in the United States generally must register with the FDA and renew every two years, between October and December of even-numbered years. Some facilities are exempt, including many retail food establishments that sell mainly directly to consumers. Ask whether your setup is exempt.
- Preventive controls. Registered facilities are generally subject to the FDA's Preventive Controls for Human Food rule, which calls for a written food safety plan prepared or overseen by a trained Preventive Controls Qualified Individual. Very small businesses may qualify for modified requirements.
- Acidified and low-acid canned foods. Shelf-stable products like salsa, hot sauce, pickles, and canned sauces are covered by specific federal rules. These generally involve a review by a process authority, registering the facility and filing the process with the FDA, and production supervised by someone trained at an approved Better Process Control School.
- Other product types. Juice has its own HACCP rule. Seafood has its own HACCP rule. Meat and poultry products are generally inspected by the USDA or a state meat inspection program. Dairy products go through state dairy licensing.
Labels
Commercial labels generally need a statement of identity (the product's name), net quantity, an ingredient list, an allergen declaration for the nine major allergens, and the name and place of business of the manufacturer, packer, or distributor. Nutrition Facts are required unless an exemption applies. Some small business exemptions exist, and some of them require filing a notice with the FDA. Claims like "low fat" or health claims have their own rules.
Your product
A recipe that works in a home kitchen doesn't always behave the same way at a larger scale. Mixing, heating, and cooling all change with batch size, and those changes can affect texture, flavor, and safety-related properties like pH and water activity. Before scaling up, it is worth confirming that the product stays consistent from batch to batch and setting a shelf life based on testing rather than on estimates.
The business side
Many farmers markets, retailers, and distributors require product liability insurance. Retailers often require UPC barcodes, and some have their own supplier requirements. Building these costs into your price early makes the move easier.
A typical order of steps
- Identify your product's category and which agencies regulate it, at the state, local, and federal levels.
- Decide where to make it: a shared kitchen, your own facility, or a co-packer.
- Confirm the product is stable and consistent at scale, and get any required process review or testing.
- Apply for state or local licenses, and FDA registration if it applies.
- Put a written food safety plan in place.
- Create compliant labels.
- Arrange insurance and any retailer requirements, such as barcodes.