A new cottage industry is born — almost.
The Colorado Cottage Foods Act, which needs only the governor's signature to become law, will allow people to sell baked goods, jams and jellies and such out of their home kitchens directly to consumers. No more middlemen. No mandatory inspections.
Most proponents imagine a stay-at-home mom making a little extra income for her family during tough economic times. And, in fact, an income cap is meant to ensure that's who benefits.
But here's the thing: The net income cap is $5,000 per item. Separate cookie flavors, for example, can count as individual items. In other words, with less than a little creativity, a person can easily dodge that cap's intended restrictions.
So Mike Buzzell, owner of commercial kitchen-based Mile High Whoopie Pie Company, sees a sour side to this sweet deal.
"Any time someone can actually work out of their home with zero overhead," he says, "they can undercut small business."
Peaches for you ...
Sen. Gail Schwartz, a Democrat from Snowmass Village who sponsored Senate Bill 12-048, says the idea for the law came from town hall meetings throughout her 11-county district on the Western Slope. Farmers wanted the ability to earn extra income from their fruits in the offseason.
She liked the idea, and also the chance to help establish an incubator for new products.
"Say that you make the most amazing peach chutney," says Schwartz (who actually claims to). "This will allow you to test it out in the marketplace. If it's well-received, and you think you can make a go of it, you can go get a retail food license, move out of your home, and sell it by the pallet. ... It is an entry-level opportunity."
Currently 31 other states allow the sale of baked goods and the like from home.
This bill enjoyed bipartisan support in the Legislature, passing through the Senate in a near-unanimous vote. On Monday, it passed the House, 53 to 12. And though a competing House bill would lift the $5,000 cap, there's little reason to think Gov. John Hickenlooper won't sign this one.
The cap came out of conversations Schwartz had with a number of stakeholders, including the state Health Department, retailers, the Colorado Restaurant Association and the Colorado Farm Bureau, she says. What they found was that it was critical to keep these sellers small.
"This was not going to be a large-scale production that would compete with Main Street," she says.
But angsty posts on the Colorado Cottage Food Facebook page point to that very concern — and to unintended beneficiaries, like those already established businesspeople who understandably care to cut costs.
"If it does pass, I most likely will go to a baking-from-home operation because it saves the overhead," confirms Erin Smith of Colorado Springs' Whipped Cupcakery. "For my type of business, the only reason that I have the commercial kitchen is to follow the law of the land."
SB 48 specifies that sales must be made on-site; through a community-supported agriculture program or a farmers market; or online. Delivery is allowed. Per the act, products must be sold "directly to ultimate consumers and not to grocery stores or restaurants." Producers must be certified in safe food handling and processing by a third-party certifying entity and are also encouraged to maintain liability insurance. Also, product labels must acknowledge the home-kitchen origin and lack of health inspection.
Because it doesn't allow for sale of dairy (except eggs), meat or acidic products, the bill doesn't require annual inspections to which other food businesses must submit, though home businesses can be charged a yearly $100 fee by counties.
According to Thomas Gonzales, El Paso County Public Health environmental health director, that $100 would act as a processing or registration fee, which colleague Susan Wheelan says would cover database costs and staff time to collect information on the sellers and respond to complaints.
Jerry Downing of Gotta Love It! Market, an Old Colorado City co-op kitchen, says he's not so much worried about being put out of business by SB 48. For every baker who might jump ship, producers of perishable goods like salsa or pies or future bakers who outgrow their own kitchens will still need commercial spaces — perhaps restoring the balance. But he does still have some concerns for the consumer.
"I wouldn't want to tell anyone that I just made this stuff in my kitchen along with the dogs and the cats and the kids," he says. "There's a level of credibility I don't think you'll be able to achieve by saying you bake your stuff out of your house."
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