Organic Broadcaster

Cottage food laws allow producers to create, sell value-added products

By Lisa Kivirist and John Ivanko

Whether you operate your farm as a CSA or sell at farmers’ markets, transforming a bumper crop of tomatoes or cucumbers into value-added jars of salsa and pickles can boost your bottom line, extend your cash flow year round and diversify your farm income.

To turn your tomatoes into sauce or your strawberries into jam, you don’t necessarily need to rent a commercial kitchen or hire a co-packer. Forty-two states and counting now give the green light to farmers and entrepreneurs who want to launch certain types of food businesses out of their home kitchens with little regulatory oversight or expense—just good recipes, commitment, and enough know-how to turn fresh ingredients into sought-after treats for the local community.

“Cottage food laws,” as they’re commonly called, allow you to sell certain food products made in your home to customers in your community. By certain foods, the laws mean various “non-hazardous” food items, often defined as those that are high-acid like pickles or low-moisture like breads. Depending on the state, some laws also permit the sale of other non-hazardous items like dried herb mixes or chocolates.

Follow Your State’s Law

Your first stop to size up your prospects for a value-added enterprise is your state’s Department of Agriculture, the agency usually responsible for administering the law. There are four key questions you need answered in your state’s cottage food law before you get started:

• What products can you sell?
• Where can you sell your products?
• How are you allowed to sell your products?
• How much can you sell of your products?

While the cottage food laws vary greatly by state (see sidebar), nearly all will address specifically what you need to do to turn your cabbage into sauerkraut to sell to customers at a farmers’ market, the most common venue for cottage food sales. For your value-added high-acid products like preserves, pickles and salsa, you’ll need to go through a reputable source for high-acid canned recipes. Your local Cooperative Extension office (csrees.usda.gov/extension) and the Ball Blue Book Guide to Preserving are great sources. To be considered high-acid, these products must have an equilibrium pH of 4.6 or less.

Nearly every state that has cottage food legislation on the books also includes baked goods (Wisconsin is the exception), perhaps because it’s hard to mess up a loaf of bread or a chocolate chip cookie from a food safety perspective.

Unique Sells

Specialty foods are hot. According to the Specialty Food Association, sales grew 22 percent between 2010 and 2012 and topped $85 billion in 2012. For farmers, these products can add value to winter farmers’ markets or be included as bonus features in CSA share boxes when the growing season is slow to start or quick to end.

Not all farmers’ markets allow sales of specialty food products made under cottage food laws, however. Also, if your CSA reaches shareholders in another state, forget about putting that jar of pickles or jam in the box. In only a select few states with cottage food laws (none in the Midwest) can products move across state lines.

Once you know what you can legally sell in your state, the fun part begins: deciding what you can make that people will buy, and how you can use ingredients you grow on your farm.

We were surprised at the Monroe Holiday Farmers’ Market in Wisconsin when we sold out of our pints of pickled pumpkin, much more than our traditional pickles and sauerkraut. Interestingly, more than half of all the jars sold were to be given as gifts. The buyers themselves might not have even necessarily liked the pickled pumpkin taste (we were sampling), but folks immediately knew someone who would like that distinct flavor and purchased jars as unique gifts.

To Market, to Market

While beyond the scope of this article, the many facets of marketing will be essential to the success of your value-added product. So much so that a whole section of our Homemade for Sale book (see sidebar) is devoted to just that, going into the nuances of market niches, target markets and positioning, echoed in what we call the “7 Ps” of marketing: product, price, promotion, place (distribution), people, partnerships and purpose. The most effective marketing efforts are those that combine all seven elements into one cohesive, integrated and clear plan that can be effectively implemented.

Getting the spices just right for your pumpkin cookies may involve plenty of trial and error, mixing and matching and lots of tasting. Besides taste and flavor, you’ll want consistency for your recipes. Once you have a recipe and a way to turn your farm abundance into a value-added product, it’s time to test it, since we’re talking about something perishable. Your criteria might include taste, flavor, texture, shelf life (fresh, day old, best eaten fresh, longer term), labor involved, waste, space needs, speed of preparation and consistency.

Finally, you should test it in the marketplace with an informal feasibility study that examines all aspects of your marketing and considers your competition, if any, as well. The feasibility study may involve evaluating taste, pricing, portion size, packaging, the label and even the sales venue itself. Remember, the market—your customers—are the ones telling you what they want, what benefits they perceive, what problem is being solved, or what needs are being met with your product.

“We were blown away by the diversity and quality of products at the Feast Festival and Trade Show,” said Jan Joannides with Renewing the Countryside, one of the organizers of the event held in Rochester, Minn. this past November. “We had over 100 products, from salsas to corn relish, sweet pickled jalapenos to cashew brittle. Some of these products started on a small, low-cost, start-up scale in home kitchens under cottage food laws before co-packers got involved or commercial or incubator kitchens were leased.” The Feast Festival and Trade Show (www.local-feast.org) is slated to return to Rochester in late 2015.

The key to incorporating a value-added product into your farm business mix is to balance cost inputs—including time working in the kitchen—with what you charge. Remember to add in cost of the jars, labels and other packaging.

The reality for most farms, particularly if you are doing canned items, is your processing needs to be done during the peak busiest seasonal time in the fields. This can lead to some long nights over the stove. The good news is, these canned products can serve as stored inventory for the following year.

“I make various salsas, pickles, and jams from whatever I have in abundance under Wisconsin’s cottage food law known as the ‘Pickle Bill,’ which also allows me to effectively use up seconds or produce that isn’t quite up to quality level for our CSA,” explained Erin Schneider of Hilltop Community Farm in LaValle, Wis. “The summer heat extends into the evening hours as heaps of chopped peppers await the salsa pot, but I enjoy the process of canning. Then I’m fully stocked for winter farmers’ markets, where I find folks like to buy these kind of products as food gifts.”

The new cottage food laws make home kitchen enterprises the next hot small business trend, accessible to anyone with a passion for food. So turn your state fair ribbon-winning strawberry rhubarb pie or family-favorite pickles into an enjoyable value-added business.

food lawshomemade for sale

 

 

 

 

 


Lisa Kivirist and John Ivanko are co-authors of
Homemade for Sale (homemadeforsale.com). Lisa also coordinates the award-winning Rural Women’s Project for MOSES.

From the January | February 2015 Issue

Read more stories from current Broadcaster.

Comments are closed.