New Cottage Food Law Adopted—Slowly

What You Need To Know: Cottage Food Law

By Kate Daly | January 01, 2014
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Cottage Food Law 2

Photos by Sarah Kruberg

It’s official.

After years of making bread for family and friends, retired preschool teacher Nancy Kruberg is finally selling her home-baked breads under the label of Meadow Belles Farm, and she is doing it all from her home in Portola Valley. Kruberg is excited to have received a permit to sell her honey wheat and cinnamon oatmeal breads, vanilla scones and chocolate/butterscotch chip cookies.

The home baker started her Meadow Belles Farm business with encouragement from her teenaged daughter, and they’re already experimenting with recipes to see about adding muffins and other confections to the repertoire.

As of this spring, Kruberg was one of several dozen culinary entrepreneurs in San Mateo and Santa Clara counties taking advantage of California’s new so-called Cottage Food Law. On January 1, California caught up with more than 30 other states by enacting its Homemade Food Act (Assembly Bill 1616). The legislation provides food producers with a formal permit process to make “non-potentially hazardous” items in home kitchens and sell them to the public. Sounds like a simple, spur-on-the-economy move, but months after going into effect, the new law is still causing some confusion in interpretation and implementation.

The law covers foods that won’t spoil or need refrigeration and excludes foods that contain acid levels that could lead to botulism. The currently approved foods on the California Department of Public Health’s list include 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; certain jams, jellies, preserves and fruit butter that comply with federal standards; nut mixes and nut butters; popcorn; vinegar and mustard; roasted coffee and dried tea; waffle cones and pizzelles.

Legal Guidelines

The new law outlines specific steps to get started: Applicants (called cottage food operators [CFOs]), must gain approval to use home kitchens from their local city or county planning and zoning departments and determine if sellers’ permits or business licenses are required. CFOs also need permits from their local environmental health agencies.

A Class A permit allows for sales directly to other people; a Class B permit allows selling food products to third parties such as restaurants or stores. Within three months of receiving either permit, all CFOs must take a food safety training course. The state Department of Public Health intends to offer its own training, but for now is authorizing alternative classes.

One additional employee who isn’t part of the CFO household may work for the business. The Class A permit comes with a self-monitored checklist that states cooking in a home kitchen will take place without small children or animals present, or while performing other domestic tasks. Preparation, storage, cooking and packing must be kept separate and clean.

Class B CFO kitchens are physically inspected by local environmental health agencies. All products must be labeled with ingredients, allergens and contact information. It’s OK to advertise and sell on the phone or internet, but according to the state Department of Public Health website, nothing may be sold outside California, or mailed, and deliveries must be made by the CFO. Sales can’t exceed $35,000 this year, $45,000 next year and $50,000 in 2015 and beyond.

“The assumption was that many of these products were being produced anyway, but most appear to be new producers who see this as a chance to become more involved at farmers markets or temporary events,” says Dean Peterson, director of the San Mateo County Environmental Health Department. He believes the law “will really help local individuals get their product out there.”

Where “there” is depends on who is answering the question.

“It is our understanding that a CFO registration/permit is only valid for the county where the residence is located,” Peterson says. “Some jurisdictions may be allowing indirect sales from out-of-county Class B CFOs, but San Mateo is not at this time.”

Business Planning

Startup costs have to be factored in to each new profit center: Permits have to be obtained and costs vary between counties and municipalities. Kruberg spent $153 for the Class A permit (Class B is $306), $101 for a business permit to operate in Portola Valley and $12 for an online food safety course that took about two hours to complete.

The fees in Santa Clara County are $219 for Class A and $635 for Class B permits. By mid-May the San Mateo County Environmental Health Department had approved 25 Class A and B permits and the Santa Clara County Department had approved 14 permits.

Nancy Pleibel manages the downtown Palo Alto Farmers Market and “expected a flood of calls” from CFOs wanting to sell their foods there this summer, but to her surprise none have applied. She speculates it’s because the law is a bit confusing and the permit process is expensive. However, one of her vendors, Patricia Kline, considers herself a “hybrid.” At the end of March, the San Francisco baker became the first person in her county to receive a Class A permit.

Kline already had her food safety certificate, business license and liability insurance to run ipie, her mini fruit pie and cookie company. She is thrilled to be able to use her home kitchen to handle small local orders, but she plans to keep renting a certified kitchen in San Francisco so she can continue selling her baked goods two counties away in Palo Alto. She describes commercial kitchens as “hard to find” and “very expensive … running anywhere from $25 to hundreds of dollars an hour.”

Kline belongs to a grassroots group that was involved in helping draft the Cottage Food Law. The Sustainable Economies Law Center in Oakland pitched in and Kline offered to lend her expertise as an established food artisan. She is a bit frustrated that “a CFO can only sell in the county from which they have their permit. Some counties/cities are considering reciprocity but … it is a huge issue and we are still working on it.” She predicts, “There will be a ‘cleanup’ bill in a year… [to address] the jurisdiction issue. It [the new bill] was intended to sell anywhere.” She also anticipates, “eventually the approved food list will evolve.”

Cathy Carlson, food safety manager for the Community Alliance with Family Farms (CAFF) in the Santa Clara Valley, applied to get her Class A permit in Monterey County to make lavender shortbread cookies from her homegrown lavender.

“The nice thing is you’re able to start a small business,” she says. But she still worries about food safety and cautions that producers should “have at least $1 million in liability insurance, because if something is adulterated it could put you out of house and home.”

While the new law makes it possible to increase profitability and revenue streams, some producers are taking a wait-and-see approach. At Fifth Crow Farm in Pescadero, co-owner Teresa Kurtak used to rent space in a certified kitchen in Santa Cruz to make the whole-grain pancake mix, cornbread mix and jams they sell at farmers markets and through their CSA. She likes the idea of being able “to do it at the farm in small batches. It would save so much time… We are dealing with extra product that might go to waste and could be turning it into a financially viable income revenue source.” Still, she wants to “watch and see what other people do with value-added products” before she applies for a permit.

Click here to view the CDPH list of approved cottage foods.

Kate Daly is a freelance writer who contributes to local newspapers, composes cookbooks and edits memoirs. Good fortune finds her living on the Peninsula for decades, surrounded by animals, an orchard and redwood forests.

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