Starting a Home-Based Candy Business; Cottage Food Laws and Regulations

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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 a home-based candy business re;latively easy.  It all depends on your state's regulations, the type of candy you want to make and/or sell, and conditions at your home kitchen.  Here are the basics and how to verify what you need to do in your state and specific circumstances.

Cottage Food law in your state?

The starting point is to determine how your business would be regulated and by whom.  Many states have "cottage food laws" that exempt or reduce requirements for certain types of foods made in 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/or sell qualifies as a "cottage food" and what requirements appy. If your food product does not meet your state's definition of a Cottage Food, 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 do not meet the Cottage Food definition.

Basic steps

The choices you make will determine the regulations, licenses and inspections that you may - or may not - be subject to. The biggest decision is whether to make the candy yourself or buy it wholesale.  The latter, is of course, simpler. The next decision is the type of candy to sell. also determines what rules are applicable.  But itis also a marketing decision.  Will this type of candy sell well?  And where and how to sell it?

What type of candy?

The easiest, in terms of reduced regulations are card candies that 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, gum drops, 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? If you just buy it wholesale, that can reduce many requirements. There are 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 or state business license or registration. This usually means a city business license and a state business registration at the secretary of state website online.

Research and resources

There are national, state and even non-profit organizations and magazines that may offer free guideance to help you set up your business.  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 speak with both a business lawyer and an account, to be sure you haven't missed any requirements or practical considerations.  There's no way any website can provide all of the considerations - they vary widely by state, county, city and your own circusmstances.

Food permits

Food manufacturing and food handling permits may be required from your state's health department if you will be making the candies yourself. Again, check with them about cottage food status; you may be exempt if you are below certain volumes and stick to "nonhazardous" types. If you are buying candies wholesale and reselling them, you will usually not need these permits. Along with the food permits, an inspection may be required of your kitchen and home, if you are making the candies at home.

Business operations - inventory

You will need a cool, dry, clean and safe place to store your inventory. You can either rent a food grade warehouse (NOT a U-Store garage type place, even if it is climate-controlled - these are not food grade).

How and where to sell - online

If you plan to sell online you may want to look into website like Etsy, 1000 Markets, Foodzie, Shopify, BuyItSellIt, or Core Commerce. Keep in mind that if you are attempting to use the Cottage Food exemptions, these usually prohibit online sales.

Selling locally - Farmer's markets, Church sales and from home

Your state may allow sales at and from these locations with reduced requirements.

Packaging and shipping

If you make the candy yourself, you will need to buy packaging that is FDA-approved for food contact. Here are some choices:

•  Nashville Wraps.

To ship, you will want generally an account with DHL, UPS or FedEx

Marketing

Getting the word out and drawing positive attention is key! If you have a website or webstore you will want clear photos of the candies to show on your website.

Other Recommendations:

Beyond the requirements, common sense, good practices and reducing liability suggests you should do the following.

Testing of pH

It's best to use a pH meter, properly calibrated on the day used. I use this one, which is reliable and inexpensive.
Short-range paper pH test strips, commonly known as litmus paper, may be used instead, if the product normally has a pH of 4.0 or lower and the paper'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 doing the following:

• ​Use clean equipment that has been effectively sanitized prior to use
• Clean work surfaces and then sanitize with bleach water before 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 insects out
• Wash hands frequently while working
• Consider annual testing of water if using a private well

Best Practices

• Allergens:  Most state home baking acts require an "ingredient statement" and/or an "allergen listing" on the label of the bakery item for sale; but if your state does not, you should anyway. The eight major food allergens are
  • milk,
  • eggs,
  • fish,
  • crustacean shellfish,
  • tree nuts,
  • peanuts,
  • wheat and
  • soybean.
• Cross-allergenicity: There are also ingredients available, even flours, that can cause a cross-allergenicity. The American Academy of Allergy Asthma & Immunology explains cross-allergenicity as an allergic reaction when proteins in one substance are similar to the proteins found in another substance. For example, consumption of lupine flour may trigger an allergic reaction to peanuts, and cricket flour may trigger an allergic reaction to shellfish. Again, providing such information might be a beneficial marketing tool and help keep potential consumers safe.
• The 2 Hour/4 Hour Rule -   Anyone wishing to make and sell refrigerated bakery items should remember to follow the "2 Hour/4 Hour Rule." This is a system that can be implemented when potentially hazardous foods are out of temperature control (temperatures greater than 45 degrees Fahrenheit) during preparation, serving or display for sale. The rule guidelines are as follows:
  • If a potentially hazardous food has been out of temperature control for 2 hours or less, then it may continue to be used or be placed back in the refrigerator.
  • If a potentially hazardous food has been out of temperature control for more than 2 hours but less than 4 hours, it needs to be used quickly or discarded.
  • If a potentially hazardous food has been out of temperature control for more than 4 hours, it must be discarded.

More resources:

• FDA Food labeling information.
• Good to know (not a requirement): Guidelines for Determining Metric Equivalents of Household Measures (October 1, 1993)
•  Massachusetts has a Food Processors Resource Manual that is a practical guide for specialty food and start-up food processors published by the Massachusetts Department of Agricultural Resources. The marketing and practical tips can be very 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 a Business Plan
  Label and Product Regulations
  Label Design
  Promotion
  Distribution and Sales
  Trade Shows
  Using the Internet for Marketing

Questions? Contact Information: