2012-10-26

Co.Exist

Can California's New Law Start A Small Food Business Revolution?

Cottage food laws—which make it legal to sell food you made at home—aren’t actually a new thing. But the passage of a landmark bill in California could lead the rest of the nation toward small batch, artisanal cooking companies run out of people’s home kitchens.

Food entrepreneurs in California celebrated the recent passing of California’s Cottage Food Bill (AB1616) last month, which makes it easier for homemade cooks to sell their goods legally. But experts say that the bill actually lags behind similar bills found in other states—33 others to be exact, according to Christina Oatfield of the Sustainable Economies Law Center, a Berkeley-based organization that helped get the bill passed. While California is known to be a foodie haven, the state’s homemade food entrepreneurs may feel disheartened to discover that Ohio, for example, is much nicer to its constituents and makes its residents jump through far fewer hoops to get their baked goods, jams, and other delicacies into the mouths of hungry customers.

"A nationwide legislative movement to support cottage food production was underway even before Jerry Brown signed the California bill into law; in fact, at least 18 states have enacted laws to support cottage food production since 2005, almost all of them before the California law was introduced in February of this year," Hanson Bridgett LLP lawyer and food startup specialist, Erin Bennett, tells Co.Exist.

True Pioneers

So while all eyes have been on California as of late, there seems to be a nationwide movement of home-based food entrepreneurs brewing—and California is not leading the way. It turns out that Ohio—and Pennsylvania—are the real pioneers of the movement.

"This is because their cottage food laws have been on the books for the longest and they have some of the most minimal amounts of red tape for food entrepreneurs to navigate," says Oatfield.

California’s bill restricts what types of foods are allowed to be produced and sold from home. Entrepreneurs are also required to attend trainings and adhere to label requirements, but the bill’s primary accomplishment—from the perspective of food entrepreneurs—is that renting costly commercial kitchens is no longer required: It’s now legal to sell food you make in your own kitchen.

"I would say that California’s new home businesses will face about the same or greater restrictions than their average counterparts in other states. Something unique about California’s cottage food law is that its list of allowed foods includes certain "non-potentially hazardous" Latin American foods, such as churros, tortillas, and dried mole paste that are not included in many other states’ lists, in an effort to make our law culturally relevant to California," says Oatfield.

The California Influence

So, while California’s bill is a little bit late, its unique features may help other states think of similar locally contextualized adaptations of the bill. And while Ohio and Pennsylvania have the longest-standing cottage food bills, those states may not attract the same types of eager entrepreneurs that California is known to attract.

"While the California law is certainly not the first of its kind, California legislation, particularly in food and environmental contexts, tends to garner a significant amount of national attention. As a result, it would not be surprising to see the California law swaying some of the more than 30 states that have already adopted cottage food laws to incorporate its more unique features, such as limiting the number of full-time employees to one and allowing direct and indirect sales, subject to certain geographic limitations," says Bennett. "Moreover, given the still-slow economy and the revival of local food traditions, the California law will likely influence those states that have yet to adopt cottage food laws, such as Connecticut and Rhode Island."

The motivation behind the homemade food movement and corresponding cottage food bills is thus largely economic—a unifying nationwide reality is the struggling state of local economies and the needs of many individuals and families to have an income or supplement their income.

"There are lots of people all over the country thinking creatively about many ways to stimulate small-scale food enterprises, including home-based food enterprises, in a way that is a win-win-win for our health, the economy and the environment," Oatfield points out.

The Economics of Home-Cooked Food

Susie Wyshak, a food business consultant who runs the site, Nuttyfig, says California legislators likely saw a need and opportunity for more affordable foods, helping entrepreneurs prove the market for their food products, and helping people supplement their income.

"Given economic pressures on families and small businesses," Wyshak tells Fast Company, "I think legislators saw a clear case." And as such, the movement is likely here to stay—at least for as long as the country wrestles with its mounting financial challenges.

"I definitely think as a known 'leader’ in various movements that California passing the homemade food law will speed up passages of similar laws in other states. I’m excited to see where this goes and really think the law can help generate more revenue for local governments as well as micro-entrepreneurs," says Wyshak.

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