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The 3 Most Troubling Rules for California Cottage Food Operators

Cottage food operators (CFOs) are individuals that prepare and sell goods directly from their home. The cottage food community has exploded in recent years, as more people begin to explore ways to make extra money while doing the things they love. You can find registered CFOs at your local farmer’s market, across social media platforms, and on websites like Forrager and Etsy.

Advantages to registering as a CFO include:

  • Flexibility of working from home
  • Making money from a hobby or craft
  • Less expensive than operating out of a commercial kitchen
  • Building connections within community

Most states, including California, require cottage food operators to register with their local health department and meet specific health and safety requirements to legally do business. Argive recently surveyed cottage food operators across three major counties in California to learn about the regulatory challenges they face.

From the comments of over eighty respondents, three requirements emerged as a consistent source of frustration and unnecessary red tape to CFOs. Argive offers an unedited summary of their feedback and suggestions in order to help California public administrators identify and improve regulations for this growing industry.

1. Home address labeling
California counties adopt and enforce portions of FDA regulations that require cottage food operators to list their home address on product package labels if their business name and phone number is not already listed in a public directory. The requirement is intended to improve product transparency and allow consumers to easily contact CFOs regarding their product. However, the requirement raises significant privacy concerns for CFOs who are uncomfortable sharing their personal address with customers.

A CFO based in Santa Barbara writes: “Especially now that I have a kid, I don’t like to put my home address on my labels for safety concerns.” Because CFOs also sell their goods online and at local farmers markets, the increased visibility makes them especially vulnerable to unwanted attention from strangers. A frustrated CFO writes: “My home is my HOME! My address shouldn't have to be on every item that I sell, especially when it's at farmer's markets and public places.”

CFO suggested solutions:

  1. Require only city, state, and ZIP be listed on product package label
  2. Require contact information (e.g. phone, email, website) be listed on product package label
  3. Local health departments can keep addresses associated with CFO permit numbers on file and provide them to consumers upon request. 

2. Third party shipping
Most counties do not allow CFOs to ship their products, instead requiring them to hand-deliver goods to customers. The requirement is intended to protect customers from consuming goods that may be damaged or tainted in the packaging and shipping process. However, CFOs report this requirement is time-consuming, inconvenient, and limiting to business growth. One CFO writes “Not being able to ship reduces our ability to expand our client base,” while another explains “I have a website and have to personally deliver every package in the local area. It is a long and very unorganized process.”

Another CFO points out the lack of logic in the requirement: “This does not make sense in light of the fact that a licensed CFO is allowed to sell their product both retail and wholesale. How is a CFO going to wholesale their product throughout California if they must personally deliver it?”

CFO suggested solutions:

  1. Lift the ban on third-party shipping because it does not align with already-permitted wholesale of products
  2. Allow shipping within the county and/or state of California

 

3. Approved foods list
California Health and Safety Section 114365.5 (a) establishes an “approved foods” list that cottage food operators must adhere to in creating their products. The requirement is intended to safeguard consumers from contracting a foodborne illness by ingesting perishable foods.

While CFOs recognize the importance of the list: “As a baker, I want to make sure that I am taking all precautions necessary to keep clients safe from food harm”, the list limits the creativity and choice of CFOs in making their products.

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One CFO writes: “There are a lot of different recipes I would like to create and provide to my clients, but am not able to freely include certain gourmet ingredients.” Another CFO offers: “I am forced to rent space at a commercial kitchen because cream cheese buttercream frosting is not on the approved list.”  

Consider the case of Sarah Blake, a CFO based in Orange County. Blake had to close her popular baking business after the approved foods list changed to no longer allow cream cheese frosting. Of her decision to close operations, Blake says: “Customers buy my cupcakes because they like the frosting, which contains the prohibited ingredients. Changing my recipes would mean losing potentially loyal customers.” Read more about Blake’s experience on our story map.

CFO suggested solutions:

  1. Expand the approved foods list to include:
  • Buttercream cheese frosting
  • Greater variety of fruit jam and jelly flavor
  • Dry meringue powder
  • Cured meats

The cottage food industry is a niche space that showcases the optimistic spirit of American entrepreneurship. By lifting regulatory burdens on CFOs, administrators can create a richer ecosystem for CFOs to do business. The three requirements identified by California cottage food operators are examples of red tape that create unnecessary hurdles for business owners. Implementing the feedback and suggested solutions from the CFO community will foster business growth and economic development without compromising public health and safety in California.

To learn more about Argive's California cottage food survey and access raw data, please click here