Prepared at Home- Sold Commercially

Is the Cottage Food Industry Set to Boom?

As more consumers opt to eat locally, the cottage food industry has risen to meet demand. Local food options, including foods prepared inside a person’s residence and sold commercially, also known as cottage food, have increased from a $5 billion industry in 2008 to a projected $20 billion industry in 2025. The secret to success appears to be policy.

Until recently, cottage food has been a highly regulated industry; virtually illegal in some states. Generally, across all fifty states, food products could not be sold unless they had been prepared in a commercial kitchen that had been inspected and undergone lab testing to prove that they were safe for consumer consumption. Though each state has traditionally been permitted to craft its own cottage food policy without much intervention from the federal level, producers found it less than profitable to navigate costly regulatory parameters.

In recent years, individual states have come to see the value of relaxing their regulatory stance for the sake of food security and economic development. All fifty states allow for some type of direct-to-consumer selling model, equipping residents to cook food in their own homes with the intent to sell it at farmers' markets, through online sales or from the side of a road food stand.

Is Cottage Food Economically Valuable?

In states where policy allows for a wide variety of food products to be sold directly to consumers, studies have shown that more money stays within the local economy. Neighbors are happy to purchase eggs, produce, jams, honey and even pre-made meals and baked goods from their neighbors. In some cases, grocers that carry cottage food have gained a market edge by appealing to consumers who prefer to shop where they can find locally grown and prepared food items.

Business professionals with full-time jobs have been able to earn sideline incomes as cottage food preparers. From chocolates to bagels, to cakes, and more, the secondary incomes are also a boost to local economies. Single-parent homes, ever-moving military families, and bakers looking to dip their toes in entrepreneurship have found both financial success and the freedom to work from wherever they choose to live.

Removing the requirements of commercial kitchen facilities, inspections, and lab testing virtually eliminates the start-up fees that previously hindered people from entering the cottage food industry. Though each state has its own requirements, in some states getting started is as easy as paying a small fee for a best practices tutorial and creating accurate food labels.  The lower barriers of entry mean that more individuals in every state are able to build sustainable businesses that ideally support other local industries. The locally made salsa may have sourced ingredients from nearby farms. Local honey is likely made by local bees. And the creative baked goods likely rely on the local grocery store for ingredients.  In the case of produce, individuals who already grow food for themselves are incentivized to grow more and sell the excess to neighbors. They have an accessible market. In practice, many cottage food producers buy ingredients in bulk from wholesalers.

How Does Cottage Food Support Food Security?

In the most lenient states, even meat and cow's milk can be sold directly to consumers, though it requires more inspections than, say, chocolate-covered almonds. As consumers become increasingly interested in knowing where their food comes from, the option to purchase goods from neighbors has become ever more appealing. While selling food out of the home is nothing new, the Food Freedom policy is allowing cottage food options to play a part in bringing nutritionally valuable food products to consumers.

Is it truly safe to allow food cooked in one’s residence to be sold commercially? It's a question state legislatures are grappling with. If food preparation areas cannot be regularly inspected, then relaxing regulatory policy could set the stage for an increase in cases of food poisoning. The line between food service and cottage food is getting blurrier. Is selling meatloaf and mashed potatoes from a stand different than selling canned salsas and fresh vegetables? If food is made at home, must it be sold out of the home, or can it be transported? Generally speaking, if food cannot be frozen or canned, it might not be safe to produce it in large quantities and sell it to the masses.

Though we might not go back to the days of a corner bakery, with a butcher shop down the block and a grocer for canned goods, gone may be the days of one-stop shopping. Consumers enjoy buying a bagel they know was made by their neighbor that morning rather than buying a bag of 6 bagels made by a machine that never grows mold. The variety of places to purchase products works to strengthen food security. Local economies are not entirely dependent on Costco’s supply chains for all food items.  It may be years before all fifty states allow farmers to sell a whole cow’s worth of meat directly to a consumer. However, recent policy shifts and consumer demand are perfectly positioning the cottage food industry to boom.