‘Net Limits Will Limit Net Sales

imageCalifornia Dept. of Public Health has decided that we can use the internet to promote, even sell, our cottage foods–but the food cannot be shipped. It must be picked up by or delivered directly to the consumer. That may mean considerably less money as net profit!

San Diego county is offering Class B permit holders the chance to revert to the cheaper Class A permit if their main goal was to do internet sales. (Class A permits are for those who sell only directly to customers. If you intend to sell wholesale or to another business which will sell your product, you still need a Class B permit.)

Many states have some restrictions on selling cottage foods via the internet. It was originally thought that we would at least be able to ship foods sold on the web within the county, or possibly to neighboring county residents, but the state has–at least for now–limited even that option. See #9 on the state’s Cottage Food FAQs HERE.

Comments?

Latest News on CFO Training for San Diego

Food  handlingSan Diego County Environmental Health Department is allowing more options for Cottage Food Operators who, by law, must complete a food processor’s course within three months of getting registered. BOTH the state’s list of accredited training (online) and the county’s list of (in-person) classroom trainings will be accepted for now.

The state is working to prepare a special food processor training class for Cottage Food Operators, any employee, and/or household member involved in preparing or packaging food.  Until those classes become available, however, we must provide proof of proper food handling knowledge by obtaining a food handler’s card.

It can be confusing since San Diego has more stringent classroom requirements for food handler’s cards than the standard California state requirements.  At present, either the state approved or county approved food handler’s cards will be accepted.  As an added bonus, the cards do not expire for cottage food production like they do for restaurants or other food handlers.

For a comparison of online options, costs entailed, languages available, etc. see our Comparison of Online Trainings.

For a list of San Diego County approved classroom trainings click HERE.

 

Training and the Food Handler’s card dilemma

 

National Restaurant Assoc. ServSafe logoGood news! CA Dept. Public Health, the group tasked with developing a food processor course for Cottage Food Operators, has decided that until they have more time to design a class, we only need to get a food handler’s card.  Here’s what is interesting… most of the state approved classes are not approved for San Diego County’s food handler cards.  SEE IMPORTANT UPDATE BELOW

At this time, only The National Restaurant Association ServSafe courses are approved by BOTH the state AND San Diego County. Cottage Food Sandie suggests getting a ServSafe food handler’s card to be sure you have one that is accepted by both state and local health departments.   A link to online ServSafe classes ($15) is here   Can’t take it online? Four hour classroom training is also available around the county.There are less expensive ($10) and more expensive ($17) classes on the state list and classes are available in several languages.

The Homemade Food Act AB1616 requires that you (as the Operator), your employee, and/or any household members involved in making or packaging food complete a food processor course within three months of getting registered or permitted.  The state requires they be American National Standards Institute (ANSI) accredited organizations (listed here). Again, though, the only ones for San Diego county that are ANSI accredited are through the National Restaurant Association (ServSafe).

Usually food handler’s cards must be renewed every three years. However, for a cottage food operation, the individual only has to take and pass the class once. The expiration date will not apply to the Cottage Food Operation.  Read the state health department announcement here:  CFO Training

 

LABELS: Do Say, Don’t Say

KEG pickle-making workshop

The labeling requirements for San Diego Cottage Foods are listed in the registration application–but there’s more that is required by state and federal law.  Also, some words should not be used to describe your product.  Save yourself time and trouble down the road by using these tips to get your label right from the start…

According to San Diego County Department of Environmental Health, Food and Housing Division, you

DO SAY the following on the primary label of your packaged Cottage Food product:

1. The words “Made in a Home Kitchen” in 12-point type

2. The name commonly used for the food product

3. The name of your Cottage Food Operation which produced the food (The name you have registered with the Dept. of Environmental Health)

4. The common or usual names of the ingredients listed in descending order by weight.  Sub-ingredients must be included and can be listed following the name of the ingredient.  For instance: enriched flour (wheat flour, niacin, reduced iron, thiamine, mononitrate, riboflavin and folic acid).

5. Your registration or permit number.  (Note: The terms Permit or Registration reflect whether or not you want or have an A or B permit. Wording is very precise re. the county department approving your application. For precise wording see San Diego
Environmental Health Department’s SAMPLE LABEL information.)

AND According to CA state law through AB1616, the Homemade Food Act, it also must have

6.  The address of your Cottage Food Operation

7.  The net weight or volume or count of the food product stated in both English (pounds/ounces) and metric (grams) units.  (It should include the weight of liquid in the package if the liquid is normally also consumed.)

PLUS the Federal Government also requires that you

8.  Declare in plain language if the food contains any of the 8 following major food allergens (or ingredients derived from them)

       

You can note the allergens in a separate statement immediately following or next to the ingredient list OR within the ingredient list.  Cottage Foods Sandie recommends listing any allergens separately beneath the ingredients so as to avoid causing a bad allergic reaction in your customer due to them overlooking the allergen in the ingredient list!

Don’t Say

The Federal Food and Drug Administration has specific conditions for the use of these terms. (For instance, sodium free means the product has less than 5 mg of sodium per serving.  Use of these terms may require you to get, and display, a nutritional analysis which is currently NOT needed for cottage food products in California.)

2.  Anything that describes a relationship between a food component and a disease or health-related condition is considered a health claim.  Phrases like “sodium and hypertension,” or “calcium and osteoporosis” are defined and regulated under 21 CFR 101.14 and 101.70 et. seq.

 

And Remember:

  • Labels must be in English (but can have a translation on the label or package)
  • If you will be providing unpackaged/labeled products to a food facility, the facility must identify the product as homemade to their customers.
  •  If you label your product as “Organic” it must be certified by an accredited third party certifying organization.  That organization’s name must appear on the label
  • Glossy labels often reproduce and look better than matte.  Experiment to get the right “look” for your product and packaging.
  • Any labels, wrappers, inks, adhesives, paper, or packaging materials that come into contact with your cottage food product by touching the product or penetrating the packaging must be food-grade (safe for food contact) and not contaminate the food.
  • Labels don’t have to be boring! Use color, designs, and graphics to make them visually appealing. Just make sure to have the right information.

For an example of a label acceptable to the San Diego Environmental Health Department, please see this LABEL link

Have questions, comments, or experiences you’d like to share? We’d love to hear them!

Tips to Getting Permitted

approvedCottage Foods Sandie got her Class B permit from San Diego Environmental Health on Friday.  There are a few delays you can avoid and ways to streamline your process if you want to make it easier on yourself.  For instance . . .

 

  • Your food product MUST be one of the foods on the CA state CA CFO foods list
  • Check to see if you need to obtain a business license before you apply for a CFO permit, or if you can obtain it afterwards.  It varies with your location.  See the list HERE. Unless it specifically says, “DEH-FHD will permit first” you will have to get your local business license first and submit it with your application. Click HERE to find links to San Diego County towns and the business license forms you will need.
  • You will need the Assessor’s parcel number for your residence which can be found HERE by typing in your address as indicated.
  • You will need to know your public water and sewer district.  (If you have well water and want a Class A permit, they will recommend that you have the well water tested to make sure it is not contaminated with bacteria. If you want a Class B permit, and you have a well OR use a private septic system, it must be inspected by Land and Water Quality Division (858-565-5173) prior to operating.
  • You will need a sample label for each product and flavor variation.  See the Environmental Health Department’s Cottage Food Label Sample for specific information required on the label.  Cottage Foods Sandie recommends you take a packaged, labeled sample of your product for them to see, as well as copies of the labels for them to keep for review.  Getting your labels done right for approval is the most challenging step. Be sure to search our posts on Labels and start reading from the most recent to past.
  • Fill out the right forms.  For a Class A permit, carefully read, answer, and sign the Self-Inspection Checklist.  If you want a Class B permit, carefully read, and answer the first half of Public Health Permit Application-San DiegoSkip the “Food Facilities” and other sections and sign and date it at the bottom.
  • Have cash, check, or money order made out to San Diego County for either $142 (Class A) or $284 (Class B).  The office now accepts debit or credit cards and also takes checks and money orders.
  • Take your forms to the San Diego Department of Environmental Health located at 5500 Overland Dr., Suite 170, San Diego, CA 91923.   At this time, the San Marcos office is not yet processing Cottage Food Operation permits.

Finding the office of San Diego Department of Environmental Health:
The office building at 5500 Overland Dr. is easy enough to find (sitting at the corner of Overland Dr. and Farnham St.) but the office itself is a bit more obscure.  It is best reached by parking in the lot on Overland Dr.  You then walk around the building past the credit union down Farnham St. to the first sidewalk on your left.  (This is the “back” of the 5500 building.)  Walk down the sidewalk between the two buildings (with your back to Farnham St.)  Near the end of the 5500 building on your left will be a set of double glass doors. The San Diego Department of Environmental Health office is on the first floor immediately on your right.

You can also call the Specialist on Duty at 858-505-6900 to ask questions and make sure you have everything you need before you arrive.

Any problems or unanticipated questions? Let me know!

Sandie

Simple Steps to Starting

 

by Dandy Delights

Cookies by Dandy Delights

Starting a business may SOUND intimidating, but it’s not. Just like a recipe, it’s a matter of following the steps in sequence. Cottage Food Sandie is here to help!  We’ve put together the resources you need to get your business off the ground.  Follow these simple steps to get a cottage food business started in San Diego…

 

1.  Check that your foods are on the CA CFO foods listThen check out the Flow Chart to see if you qualify as a CFO.

 

2.  Check with your local planning office to determine if you need a business license first, or if you should get your Cottage Food Permit approved first.  The San Diego Health Department has a convenient ZONING publication with contact information to help you decide which to do first.

 

3.  Create a label for your product in line with San Diego Dept. of Environmental Health, Food and Housing Division requirements.  Include sample labels for all flavors and products with your application. Adding them later will be expensive. But, in your first year, keep it simple. Focus on a few products or flavors that you know are well liked.   If you have more products and flavors than can be reviewed in an hour, it could cost you an additional $142. See our post on “Labels:  Do Say Don’t Say“.

 

4.  Apply for a business permit (sometimes called a tax certificate or other term)  If you live in an unincorporated area of the county, you do not need a business license.  If you live within a city or town, you can find a link to the appropriate office HERENote: some towns also require a Home Occupation Permit as part of the license or tax certificate.
     AND, remember you will probably need to file for a fictitious business name. Unless your business name is your name and describes what you do (e.g.  John Smith’s Bakery), you will need to file for a fictitious business name.  You can search the index online here.

5.  Fill out the San Diego CFO Registration Form and either the Self-Inspection Checklist for a Class A permit OR the Public Health Permit Application-San Diego. for a Class B permit. Take both forms, a copy of your label(s), and cash, check, debit/creidt card, or money order made payable to San Diego Environmental Health for the appropriate amount ($142 for Class A permits or $284 for Class B permits) into the San Diego office (5500 OVERLAND AVE # 100, SAN DIEGO, CA 92123) between 8:30 am-4:30 pm.  (Sorry North County, for now the San Marcos office is referring cottage food permits to the San Diego office.)

6.  Will you need a Federal Employer Identification Number (FEIN or EIN)?

If your business is a sole-proprietorship, you do not need an EIN unless you hire someone.  For banking and tax purposes, your Social Security Number will be your EIN.  You can request one, but do not have to have an EIN for a sole-proprietorship with no employees other than yourself.
     However, if you have a partnership, LLC, or other business type, or if you hire an employee, you will need to request an EIN from the federal government.  It is free to do online with the IRS and you can get the number immediately.

 

7.  Will you need a Seller’s Permit?

The California Board of Equalization only requires you to have a seller’s permit IF your products are taxable. In general, food is exempt from sales tax in California.  There are some exceptions (e.g. food that is heated and consumed on premise, food sold in a place charging admission, etc.).  If you are uncertain, call the Board of Equalization in San Diego (858-385-4700) for more information.  Seller’s Permits are free but sales must be reported quarterly, even if no sales were made.

 

8.  (Optional) Liability Insurance
It is not required, but liability insurance to protect you from a lawsuit in case someone is harmed by your product is a good idea. If your operate a sole proprietorship, you are the business. That means if someone gets ill, you could be responsible for the medical bills.  It is unlikely that your renter’s or homeowner’s insurance will cover your personal assets in such a case.  Get some quotes for business liability insurance to evaluate the risk and benefits. See our post on insurance.

 

Got questions?  Email us at info@sdcottagefoods.com and we will try to help.  Or visit our Facebook page and ask the community!

Applications available at SDCottageFoods.com!

3089_71483951529_3081352_aApplications for Cottage Food permits weren’t even online yet at the San Diego Environmental Health website, but you could download a copy from us!   Applications can be picked up in person or just link to our copies below.  To help decide which permit is best for you, see Class A vs B Cottage Food Permits.   Downloads:

Tip: You will need theAssessor’s Parcel Number for your residence which can be found here by typing in your street address and zip code. FOR A CLASS A PERMIT you will need to fill out BOTH the registration form and the Self-Inspection checklist. Cost for annual permit is $142. FOR A CLASS B PERMIT, fill out the registration form and the Health Permit Application. Cost for the permit is $284 annually. Tip for filling out the Health Permit for Class B Permit:  Check the box for “Class B Cottage Food” Operation in the first section.  Then you need ONLY FILL OUT the business information and  ignore the sections for food facility and below.  Be sure to sign it!!) When complete, take the forms, your sample labels and your cash, check, money order, or credit/debit card into the office in person (no option to fax, email, or register online).  While there is a San Marcos office, applications are still only accepted (as of Sept. 2014) at the San Diego office:

SAN DIEGO ENVIRONMENTAL HEALTH OFFICE

5500 OVERLAND AVE # 170

SAN DIEGO, CA 92123

BEFORE YOU GO CHECK THAT

  • Your foods are on the California state approved food list.
  • A cottage food operation is allowed by your local zoning department.
  • You have completed and signed a) The Class A Permit registration form and the Self-Inspection Checklist for a Class A permit OR b) The Class B application and the Health Permit application.
  • You have sample copies of your labels for each product and flavor variation
  • You have cash, check, debit/credit card, or money order made out to San Diego Environmental Health Dept. for the appropriate fee ($142 for Permit A or $284 for Permit B).

If you have more questions, email us or call the Specialist on Duty at the Health Department, Food and Housing Division, (858) 505 6900. Let’s get rollin’!

Waiting, waiting, waiting…

やかん(Yakan=kettle)

San Diego County Environmental Health Department seems to be lagging behind the Jan. 1, 2013 implementaion deadline for the Cottage Food Law.  Other counties including Orange County made their applications available this morning.  It appears that fees for permits in Orange County will range from around $25-30 (Permit A) to $250-$275 (Permit B).  The requirements for both permits and a self-certification check list for a Permit A in Orange County are likely to be similar for San Diego County.   So, if you want to get started on pulling together the information you will need, check out the application package published for Orange County.  We also are awaiting news on when the state of CA will start offering the food processor course which will be required within three months of getting your cottage food permit.  That information is expected within the next two weeks.

We have calls into San Diego County Environmental Health to find out about our application packets.

Stay tuned!

Business or Hobby?

Preserves

 So you’ve been putting together these incredibly tasty and beautiful edibles in your kitchen and sharing them with friends, family, co-workers or others for fun–and maybe someone gives you a monetary token of appreciation for your effort. But you’d like to legitimately make some “dough” from your kitchen creations. Could you–should you–turn it into a business?

AB1616, California’s Homemade Food Act, was developed to feed that entrepreneurial spirit and give people a way to start and grow a business from their home, thus avoiding many of the overhead expenses of starting up! With a little forethought and planning, you CAN do it!

First and most importantly, you need to know a) Are my products on the list of approved foods, and b) Will local zoning laws allow a cottage food business at my residence? Then you are ready to ask yourself some real questions about whether you want a hobby or a business.

1. Do you have the money to start?

Starting a business is going to entail certain upfront costs. With the Homemade Food Act come some fundamental regulations and requirements which were established to protect the public from contaminated food. A food processor’s course (lasting not more than four hours) will be required and the permits themselves (A or B) also will have fees which San Diego County is still deciding. And, if you are going to have a business, most areas will require a business license (sometimes called a tax certificate). The advantage though, is that businesses are allowed to deduct expenses from their gross revenue so if done properly, your business should benefit you in several ways.

Some costs to plan for:

*If you plan to sell at San Diego Farmer’s Markets or community events, you will need a Temporary Food Facility permit from the San Diego Department of Environmental Health. For multiple locations or dates, the current fee is $250 per year.

If you will be delivering your items, determine if you have the funds to get your product to the markets.

Will you be doing online sales? You may need to set up some sort of website so people can find you to place orders. One easy, free way to do this is through Etsy, an online marketplace for homemade items.  Remember though, under CA CFO laws, you cannot SHIP your product.  It must be delivered or picked up.

Other costs?

Liability Insurance. While not an absolute necessity, this is always a good idea for your own protection when producing an edible product. Product liability insurance protects you financially from lawsuits arising from any harm caused by your product. It is not very expensive (especially in comparison to its value) and highly recommended by Cottage Foods Sandie. Some farmer’s markets will require you to show evidence of liability coverage before you can sell at their event. Get several quotes to find the coverage that suits you best.

2. Do you have the time and space needed?

AB1616 includes some specific instructions and restrictions re. food preparation, packaging and handling. For instance, when you are preparing or packaging your product, no children are permitted. Also, no pets are allowed in the kitchen or preparation area. Will you have the time you need to prepare, package, store and clean up your food without children or pets needing to get in the room? Can you separate your cottage food product preparation from family meal prep, clothes washing, or other household chores and activities? Are you or other members of the household who smoke willing to give that up during food handling and packaging? Is there an insect and rodent-free place in your residence–not outside, or in a garage, or in a separate building–where you can store your ingredients and final product without worry? Cottage Food Sandie knows it’s disheartening to spend hours making hundreds of dollars worth of food product and have Chewy the Dog eat it all while you are out at the post office!

3. Do you have the commitment?

The most important factor is having the right mindset to move from hobby to business. Making the product may be great fun for you, but there is much more to making a profit from it!  Do you have a goal for your undertaking? Can you establish a schedule for yourself and stick to it?  Are you willing to set aside part of your life, your home, your resources, etc. to promote your product and business?  Undoubtedly you will have to learn and grow in areas outside of your “comfort zone.” Those areas might be budgeting, planning, money management, marketing, sales, time management, or others.  But, if you are willing to learn and committed to developing a profitable business, there are many resources available. You CAN build a personally rewarding and profitable enterprise “from scratch.” Cottage Food Sandie and others are here to help you succeed!

 

photo compliments of Panda Evans / Foter / CC BY-NC

New information from CA Health Dept!

cdphsmallCalifornia’s Department of Public Health has recently posted guidelines and answers to Frequently Asked Questions (See HERE).  Although local counties still have authority to regulate the businesses and establish some additional parameters, this provides an outline for statewide regulations.  The state law allowing cottage food industries in California  (AB 1616) stipulates that operators must pass a food processor course within three (3) months of being registered or permitted.  It has been unclear whether current food handler’s cards would be accepted or whether a separate course would be required. It appears that a special course for Cottage Food Operators will be established so don’t rush out to get the current card approvals. More information on the new class should be available in mid-January 2013.

 

Some detailed information on product labeling is also now available on the California health department site, including both state and federal stipulations and a sample label format.  A list of sanitation and food preparation requirements, excerpted from the bill, are summarized here.  While there is not a lot of new information, at least the department is moving forward in providing a centralized resource for information which is relevant statewide.   Stay tuned for the next post on moving from hobby to business mentality!