Traditionally, state laws have dictated that food sold to the public had to be prepared in a commercial kitchen. This requirement turns out to be a fairly significant hurdle for the small, food business start up. It means either you have to buy or rent a commercial kitchen space. That just doesn't sound attainable fresh out of the gate. Some commercial kitchens allow clients to rent by the hour, which definitely provides more flexibility, but can still be costly. (We've seen quotes for commercial kitchens in the Chicagoland area ranging from $25-$35 an hour.) Ultimately, it begs the question: how in the world can anyone afford to start a baking business?!?
Cottage Food Laws to the Rescue!
A majority of states have now enacted legislation allowing the home production of some foods to be sold to the public through controlled and limited channels. They key thing to remember here is that every state has different cottage food laws -- if this is something you may be interested in pursuing, we urge you to consult not only your state's laws, but also your county and local ordinances.
Cottage Food Law in Illinois
For example, here in Illinois, since 2012, cottage food operations are allowed to sell baked goods, jams, jelly, preserves, fruit butters, dry herbs, and dry herb blends. The public act then goes on to list exceptions to that list. The whole idea is to limit the truly homemade foods available to the public only to those that are least likely to cause any concern of a food borne illness. That makes sense -- the road to the bathroom is paved with good intentions.
The law also limits the amount of money in sales a cottage food operation can bring in during a calendar year ($25,000 in "gross receipts"). Further, the law provides that the foods produced in a home kitchen may only be sold at farmers markets, and the foods must be labeled ingredients and production information. For all of the requirements and a *truly thrilling read* (note sarcasm), check out the public act itself here.
There is also a lengthy registration process required to begin operating under the Cottage Food Law in Illinois. A home chef/baker must take a managerial sanitation course and pass the accompanying exam. Then, the sanitation certificate must be registered with the state, then with the county. Many farmers markets also require you establish home baking business as a corporation or LLC and also obtain general liability insurance (for insurance, FLIP, is an economical and comprehensive choice).
It should also be noted that the state legislature put much of the power in the hands of the county governments. The county can decide whether or not it intends to allow cottage food operations within its boundaries. It is an all-or-nothing deal.
So what is the Illinois Home Kitchen Law?
The Home Kitchen Law functions similarly to the Cottage Food Law. The most substantial difference is that under the Home Kitchen law, the home chef/baker may sell his or her products out of the home -- no farmers market required! The Home Kitchen Law also has a cap on gross receipts ($1,000 a month). The good news is that if you operate in a county which recognizes both the Cottage Food Law and the Home Kitchen Law, you are able to combine those sales caps. Similar to the Cottage Food Operation, not every Illinois county has opted to participate. Check out the legislation itself here.
Honeybear Baking as A Cottage Food Operation and Beyond!
Honeybear Baking, LLC has its roots as a Cottage Food Operation. We are located in DuPage County, which has adopted the Cottage Food Law, but not the Home Kitchen Law. Subsequently, anything produced in our home kitchen may only be sold at farmers markets. (Spoiler Alert! Honeybear Baking now also works in a commercial kitchen so that we can provide custom orders to our clients outside of the farmer's market setting.)
What is our home kitchen like? We treat our home kitchen as the heart of our business. The kitchen is maintained to the high standards associated with commercial kitchens. We utilize our sanitation training and emphasize putting out quality work that we can be proud of no matter where it has been baked.
If you have any questions or comments about Cottage Food Operations, Home Kitchen Operations, or how Honeybear Baking functions within the law, we would love to hear from you! Please leave us a comment below!