Cottage Food Operations (CFO) and Chocolate

You may be wondering when we’re going to get on with making this delicious hobby into a business. Well, we’re not quite there yet, but I’ll share one option we’re considering: the CFO or Cottage Food Operation.

First of all, to operate a food business is no easy task, particularly in this litigious society of ours where McDonalds needs to label coffee as hot and Nytol has to label sleeping tablets with “may cause drowsiness.” There are quite a few licenses and permits and certifications required before one is legally able to sell food in the United States, and in our case, in San Mateo County, California. Specifically, the ability to make and sell food from a home kitchen raised enough interest that California passed a law that went into effect January 1, 2013, called the California Homemade Food Act.

The bill allows individuals to prepare and/or package certain non-potentially hazardous foods in private-home kitchens referred to as “cottage food operations” (CFOs).

All cottage food operators will have to meet specified requirements pursuant to the California Health and Safety Code related to preparing foods that are on the approved food list, completing a food processor training course within three months of registering, implementing sanitary operations, establishing state and federal compliant labels, and operating within established gross annual sales limits.

There are many benefits of this law. The biggest is that it is now possible to sell food made in your home! The law provides clear requirements in order to legally set up a business that sells non-perishable food made in a home kitchen.

There are also a few limitations. The one that is most challenging, in my opinion, is that cottage food operations are not allowed to sell products online or outside of the state of California. They may only be sold for pickup or delivery, or in the case of Class B permit, through a third party like a bakery or a chocolate shop. Additionally, there are annual income ceilings, specific food lists, and incredible labeling requirements. Finally, every county has a slightly different process, so a lot of detailed research is required before starting the steps required to legally sell as a CFO.

Our friends at Letterpress Chocolate are on their way to successful sales as a CFO, so we know it’s possible.

There are a few useful guidelines out there as to how to get started with filing the appropriate paperwork in order to start a CFO. Here are our favorites:

We’ve also discovered a few outlets for sales, if/when we get this going:

I hope these resources are useful to others considering this option. We’ll keep you updated on our process as well, particularly if we decide to take the CFO route! Leave us your thoughts below – are you considering a CFO? Where do you produce your bean-to-bar chocolate?

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One thought on “Cottage Food Operations (CFO) and Chocolate

  1. Pingback: Chocolate Business Models | Root Chocolate

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