Even before the pandemic forced people to work from home, many were already thinking about home-based skills they could turn into businesses. One that comes immediately to mind is baking. Learn about cottage food laws and home bakery businesses.
What Are Cottage Food Laws
To protect consumers from food-borne illnesses, the production and sale of food products are subject to state and federal laws and regulations. However, small, home-based food production may be exempt from some of these regulations. Instead, they fall under local “cottage food” laws.
These laws allow small home food businesses to produce and sell low-risk foods that don’t require refrigeration. They usually limit sales to individuals at venues like farmer’s markets or roadside stands. The types of foods they may sell must be shelf-stable items that don’t need refrigeration, such as baked goods or jams and jellies.
Cottage food laws may still impose inspection or licensing requirements. They may prohibit pets in the home or kitchen and require food-handling courses and permits or certifications. If you’re going to run a home-based bakery, you may still need a business license, a taxpayer ID for your business, a catchy name, marketing materials, and packaging with the required labels.
Wisconsin no longer has a law prohibiting the sale of home-baked goods. This change resulted from a 2017 lawsuit striking down a law that made selling home-produced baked goods illegal. That doesn’t mean you can sell any kind of food you want from your home—it applies only to baked goods. Consult a Wisconsin attorney or your local health department for current rules about home-based food businesses.
Equipment, Packaging, and Labeling
If you’re serious about turning your baking habit into a side hustle business, think about the equipment you’ll need. Do you have a mixer that can produce dough for breads and batter for cakes? While you may not need the kind of mixer that commercial kitchens use, you’ll need a tool that can produce several batches a day without breaking down. Do you have enough counter space, safe storage for ingredients, and appropriate packaging available?
Foods containing meats, cream, custard, or cheese are potentially hazardous because they require refrigeration, so cottage laws would not permit you to sell foods containing these types of ingredients.
Permits and Labeling Requirements
Cottage food laws generally require that foods carry labels indicating that they came from a home kitchen that was not subject to licensing. You must list ingredients by volume in the product, from highest to lowest. The label should list the date you made the product and the name and address of your home business. Some states also cap the amount of money you can make selling home-baked goods.