For a small business owner looking to test the waters of entrepreneurship in the food industry, the cottage foods industry option might be just the thing. You might ask, “What are cottage foods?“, and for that, we can consult with the Act itself, but it’s largely limited to a variety of foods that are prepared in such as way as to not require refrigeration and must be sold directly to consumers, versus restaurants or grocery stores. Additionally, the sales of such items must take place at the producer’s location, or at a farmer’s market or other similar community-supported event/venue that deals directly with consumers. Think back to the time where you bought a jar of specialty jam or pickles at your local farmer’s market, and you were most likely supporting a cottage food producer.
When the Senate Bill 12-048 (or the Colorado Cottage Foods Act) was enacted, a cap on the amount of sales permitted under the act made it difficult for a producer to scale up as they needed, should their micro-business experience rapid growth. An additional issue was the short list of approved items, which seemed slightly thin on the variety of products available for making. In 2015, things changed under a few amendments, designed to lift that sales cap and also provide for a greater range of allowed products.
Amendments House Bills 15-085 and 15-1102 improved the original Act to increase items permitted and when a few steps further into defining the products by use of tiers. Those tiers are broken down into the following configurations:
–Tier One Foods: Spices, teas, dehydrated produce, nuts, seeds, honey, jams, jellies, preserves, fruit butter, flour, and baked goods, which include candies, tortillas, and fruit emapanadas.
–Tier Two Foods: Pickled vegetables which have an equilibrium PH value of 4.6 or lower, and other non-hazardous foods. For example, sales are permitted of eggs to a level of 250 per month, so backyard chicken owners might be able to sell a bit of their overflow.
These provisions expand the diversity of available cottage food items for consumers, as well as extend the opportunities for people producing them. Along with these provisions, House Bill 15-1102 addresses the labeling of such products, so consumers are aware of the production classification and its production source, so consumers can easily identify they are purchasing items produced in a home kitchen, versus an industrial site.
While it might seem like the cottage food industry is “small potatoes”, one need only look at a company like Boulder County-based Celestial Seasonings to get the inspiration they need to take their product from their kitchen to a large-scale facility. Starting back in 1969, founder Mo Siegel was hand-picking wild herbs in our local mountains and creating their very first tea, and today, their product line has expanded dramatically to more than 105 varieties of tea, with ingredients being sourced from over 35 countries.
If starting a cottage food industry is something you are considering, keep in mind there are some trainings the state offers in order to make sure you are adhering to strict purity and production standards, as well as making sure you’re compliant as possible with state regulations surrounding your product(s).
If you need legal help, don’t hesitate to contact me at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Attorney. Phone: 720-258-6647. Email: firstname.lastname@example.org.
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