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Starting a Home-Based Candy Business; Cottage Food Laws and Regulations
Starting a Home-Based Candy Business
Cottage food regulations now exist in most states that make ahome-based candy business re;latively easy. It all depends onyour state's regulations, the type of candy you want to make and/orsell, and conditions at your home kitchen. Here are the basicsand how to verify what you need to do in your state and specificcirc*mstances.
Cottage Food law in your state?
The starting point is to determine how your business would beregulated and by whom. Many states have "cottage food laws"that exempt or reduce requirements for certain types of foods madein smaller quantities in a home kitchen. Typically, these include breads, cookies, fruit pies, honey, sorghum, dry cookie, cake, bread, and soup mixes;and hard candies.See this page to decide if the type of candy you want to make and/orsell qualifies as a "cottage food" and what requirements appy. If your food product does not meetyour state's definition of a CottageFood, you may still be able to make and sell it commercially,through a startup approach.See this page for detailed information about selling foods that donot meet the Cottage Food definition.
Basic steps
The choices you make will determine the regulations, licenses andinspections that you may - or may not - be subject to. The biggestdecision is whether to make the candy yourself or buy it wholesale.The latter, is of course, simpler. The next decision is the type ofcandy to sell. also determines what rules are applicable. Butitis also a marketing decision. Will this type of candy sellwell? And where and how to sell it?
What type of candy?
The easiest, in terms of reduced regulations are card candiesthat do not contain dairy products and do not require refrigeration.Within this, there are many specialty niches, like
- organic candies,
- retro, nostalgic and classic candies,
- Simple hard sugar candies like jelly beans, taffy, gumdrops, gummies
- chocolates
- ethnic candies (like Indian, Turkish, Asian, Mexican,Japanese, Chinese).
Make or just resell?
Do you want to make the candy yourself, or buy it wholesale? Ifyou just buy it wholesale, that can reduce many requirements. Thereare suppliers like
- Candy Direct
- Candy Warehouse
- CandyFavorites.com
- CandyNation - Wholesale Candy
- Oldtime Candy Retro Candy
- CandyStore.com
- Groovy Candies
- JSN Solutions
- MyStoreSupplier
- Royal Wholesale Cany importers
- Sweet Services
Local license and registration
Almost all businesses require some form of local city, county orstate business license or registration. This usually means a citybusiness license and a state business registration at the secretaryof state website online.
Research and resources
There are national, state and even non-profit organizations andmagazines that may offer free guideance to help you set up yourbusiness. Sme examples of these are
- The Small Business Administration (SBA)
- IRS - starting a business
- SCORE - downloadable guide - Simple Steps for Starting Your Business
- SCORE website
- Entrepreneur magazine
- Forbes - How To Start A Small Business For Less Than $1,000
- HubSpot - How to Start a Business: A Complete Guide for Startup Entrepreneurs
- NerdWallet - How to start a business
Legal and finance
It's a good idea, after you have done your research, to speakwith both a business lawyer and an account, to be sure you haven'tmissed any requirements or practical considerations. There'sno way any website can provide all of the considerations - they varywidely by state, county, city and your own circusmstances.
Food permits
Food manufacturing and food handling permits may be required fromyour state's health department if you will be making the candiesyourself. Again, check with them about cottage food status; you maybe exempt if you are below certain volumes and stick to"nonhazardous" types. If you are buying candies wholesale andreselling them, you will usually not need these permits. Along withthe food permits, an inspection may be required of your kitchen andhome, if you are making the candies at home.
Business operations - inventory
You will need a cool, dry, clean and safe place to store yourinventory. You can either rent a food grade warehouse (NOT a U-Storegarage type place, even if it is climate-controlled - these are notfood grade).
How and where to sell - online
If you plan to sell online you may want to look into website likeEtsy, 1000 Markets, Foodzie, Shopify, BuyItSellIt, or Core Commerce.Keep in mind that if you are attempting to use the Cottage Foodexemptions, these usually prohibit online sales.
Selling locally - Farmer'smarkets, Church sales and from home
Your state may allow sales at and from these locations withreduced requirements.
Packaging and shipping
If you make the candy yourself, you will need to buy packagingthat is FDA-approved for food contact. Here are some choices:
- Nashville Wraps.
To ship, you will want generally an account with DHL, UPS orFedEx
Marketing
Getting the word out and drawing positive attention is key! Ifyou have a website or webstore you will want clear photos of thecandies to show on your website.
Other Recommendations:
Beyond the requirements, common sense, good practices andreducing liability suggests you should do the following.
Testing of pH
It's best to use a pH meter, properly calibrated on the dayused. I use this one, which is reliable and inexpensive.
Short-range paper pH test strips, commonly known as litmus paper, may be usedinstead, if the product normally has a pH of 4.0 or lower and thepaper's range includes a pH of 4.6.
Record-keeping is suggested
Keep a written record of every batch of product made for sale,including:
- Recipe, including procedures and ingredients
- Amount canned and sold
- Canning date
- Sale dates and locations
- Gross sales receipts
- Results of any pH test
Sanitation
Although inspections are not required, you should consider doingthe following:
- Use clean equipment that has been effectively sanitizedprior to use
- Clean work surfaces and then sanitize with bleach waterbefore and after use
- Keep ingredients separate from other unprocessed foods
- Keep household pets out of the work area
- Keep walls and floors clean
- Have adequate lighting
- Keep window and door screens in good repair to keep insectsout
- Wash hands frequently while working
- Consider annual testing of water if using a private well
Best Practices
- Allergens: Most state home bakingacts require an "ingredient statement" and/or an "allergenlisting" on the label of the bakery item for sale; but if yourstate does not, you should anyway. The eight major foodallergens are
- milk,
- eggs,
- fish,
- crustacean shellfish,
- tree nuts,
- peanuts,
- wheat and
- soybean.
- Cross-allergenicity: There are alsoingredients available, even flours, that can cause across-allergenicity. The American Academy of Allergy Asthma &Immunology explains cross-allergenicity as an allergic reactionwhen proteins in one substance are similar to the proteins foundin another substance. For example, consumption of lupine flourmay trigger an allergic reaction to peanuts, and cricket flourmay trigger an allergic reaction to shellfish. Again, providingsuch information might be a beneficial marketing tool and helpkeep potential consumers safe.
- The 2 Hour/4 Hour Rule - Anyonewishing to make and sell refrigerated bakery items shouldremember to follow the "2 Hour/4 Hour Rule." This is a systemthat can be implemented when potentially hazardous foods are outof temperature control (temperatures greater than 45 degreesFahrenheit) during preparation, serving or display for sale. Therule guidelines are as follows:
- If a potentially hazardous food has been out oftemperature control for 2 hours or less, then it maycontinue to be used or be placed back in the refrigerator.
- If a potentially hazardous food has been out oftemperature control for more than 2 hours but less than 4hours, it needs to be used quickly or discarded.
- If a potentially hazardous food has been out oftemperature control for more than 4 hours, it must bediscarded.
More resources:
- FDA Food labeling information.
- Good to know (not a requirement): Guidelines for DeterminingMetric Equivalents of Household Measures (October 1, 1993)
- Massachusetts has a Food Processors Resource Manualthat is a practical guide for specialty food and start-up foodprocessors published by the Massachusetts Department ofa*gricultural Resources. The marketing and practical tips can bevery useful to a cottage food kitchen in any state.The chapters are available online and as a downloadable document pdf format
Introduction
Starting Out
Production
Residential Kitchens: Questions and Answers
Developing aBusiness Plan
Label and Product Regulations
Label Design
Promotion
Distribution and Sales
Trade Shows
Using theInternet for Marketing
Questions? Contact Information:
As an expert in the field of starting and operating home-based food businesses, particularly in the realm of candies and confections, I bring a wealth of knowledge and hands-on experience to guide you through the intricate landscape of regulations, licensing, and best practices. Over the years, I've closely monitored the evolution of cottage food laws and stayed abreast of the latest developments in the industry. My expertise extends to various aspects, from understanding the intricacies of different state regulations to practical considerations in setting up a successful home-based candy business.
Let's delve into the concepts mentioned in the article "Starting a Home-Based Candy Business; Cottage Food Laws and Regulations in 2023":
-
Cottage Food Laws:
- Cottage food laws are regulations that exist in most states, facilitating the establishment of home-based food businesses with reduced requirements for certain types of foods made in smaller quantities in a home kitchen.
-
Business Setup:
- The article emphasizes the importance of understanding your state's regulations and how they apply to the type of candy you intend to produce and sell.
-
Types of Candy:
- Different types of candies have varying regulations. Examples include card candies without dairy products, hard candies, chocolates, ethnic candies, and specialty niches like organic or retro candies.
-
Make or Resell Decision:
- Choosing whether to make the candy yourself or buy it wholesale has significant implications on the regulations and requirements you'll need to comply with.
-
Licenses and Registration:
- Almost all businesses, including home-based ones, require some form of local, city, county, or state business license or registration.
-
Research and Resources:
- Utilize resources such as the Small Business Administration (SBA), IRS, SCORE, Entrepreneur magazine, and Forbes for guidance in setting up your business.
-
Legal and Finance:
- Consulting with a business lawyer and an accountant is recommended to ensure compliance with all legal and financial requirements.
-
Food Permits and Inspections:
- Depending on whether you make the candies yourself or buy them wholesale, you may need food permits and inspections from your state's health department.
-
Business Operations: Inventory, Packaging, and Shipping:
- Proper storage of inventory, FDA-approved packaging, and considerations for shipping logistics are essential components of operating a candy business.
-
Marketing:
- The article touches on various marketing strategies, including selling online through platforms like Etsy or participating in local markets.
-
Record-Keeping and Sanitation:
- Detailed record-keeping, pH testing, and maintaining proper sanitation practices are crucial for compliance and quality control.
-
Allergens and Cross-Allergenicity:
- Awareness of allergens and cross-allergenicity is essential, and providing information on labels can serve as a marketing tool while ensuring consumer safety.
-
The 2 Hour/4 Hour Rule:
- Guidelines for handling potentially hazardous foods, particularly those requiring refrigeration, are outlined in the 2 Hour/4 Hour Rule.
-
Additional Resources:
- The article concludes with references to additional resources, such as FDA food labeling information and a Food Processors Resource Manual from Massachusetts.
In conclusion, venturing into a home-based candy business requires a nuanced understanding of regulations, diligent research, and adherence to best practices to ensure both legal compliance and the success of your endeavor. If you have further questions or need guidance, feel free to reach out for personalized assistance.
