AskHACCP: Cottage Food vs. Commercial: How Growth Turns Your Side Hustle Into a Regulated Business

You’ve built a loyal following selling jams at the farmers market, granola at pop-ups, or breads from your home kitchen. Now you’re eyeing bigger goals like selling online, moving into wholesale, or testing new recipes. Before you take that next step, it’s important to understand when your “cottage food” operation becomes a commercial food business.

Fast Definitions

Cottage Food: Low-risk foods (like baked goods, jams, and candies) made in a home kitchen under your state’s cottage food laws. These laws allow small-scale producers to sell directly to consumers with fewer requirements, no commercial license or routine inspections.

Commercial Food: Everything outside that list. Once you make or sell foods not approved for home kitchens or sell beyond direct, in-state consumers, you’re entering commercial territory. That means licensed facilities, inspections, and formal food safety programs.

The Big Triggers That Move You Out of Cottage Food

If you say “yes” to any of these, you’re no longer a cottage food operation:

• Interstate or online shipping (even one out-of-state sale)

• Wholesale to stores, restaurants, or distributors

• Products not listed on your state’s approved cottage list

• ROP or vacuum sealing without a variance

• Animal products (like jerky, dairy, or meat) beyond cottage allowances

• Exceeding revenue caps defined by your state’s law

Who Regulates What

• State or Local Agencies: Handle cottage food, retail food licenses, and shared commercial kitchen oversight.

• FDA (Food and Drug Administration): Oversees most commercial food producers—including Preventive Controls (HARPC/HACCP), facility registration, and product labeling.

• USDA FSIS (Food Safety and Inspection Service): Regulates meat, poultry, and certain egg products, including labeling, processing, and inspection programs.

Quick Facility Pathway

Moving to commercial production doesn’t have to mean building your own plant. Here’s how to start smart:

1. Choose a licensed kitchen or co-packer that matches your product type.

2. Map your process flow, keep raw and ready-to-eat areas clearly separated.

3. Add basic controls for temperature, allergen management, and storage safety.

Labeling Essentials

Type	Requirements
Cottage	Product name, producer name and address, ingredients, allergen line, and your state’s required disclaimer.
Commercial	Full FDA format label with Nutrition Facts (when required), net contents, lot code, sub-ingredients, and major allergens (including sesame).

Records That Matter

Commercial compliance requires traceability. Keep these on file:

• Lot codes for every batch

• Supplier approvals and certificates

• Temperature and pH/aW logs (if applicable)

• Cleaning and maintenance records

• Complaint logs and corrective actions

Decision Snapshot

You’re likely still cottage food if:

• Your product is on your state’s allowed list

• You sell only in-state and direct to consumers

• You don’t use ROP and don’t handle TCS (time/temperature control for safety) foods
  

If any answer is no, it’s time to explore commercial licensing steps.

Common Pitfalls

• Assuming online sales are allowed under cottage food laws

• Using vacuum sealing without an approved variance

• Missing sesame on allergen declarations

• Skipping lot codes or batch tracking

Starter Checklist

1. Confirm your state’s cottage food rules.

2. Choose sales channels and identify growth triggers.

3. Draft compliant labels early.

4. Set up basic recordkeeping templates.

5. Price out a pilot batch in a licensed kitchen or co-packer.

AskHACCP: Free Guidance Before You Grow

AgriForaging’s AskHACCP Hotline service offers free, confidential answers about licensing, labeling, and process risk. We provide quick reviews before you invest in new equipment or facilities, helping you grow safely, confidently, and in compliance.

Contact AgriForaging Compliance Services to start your next phase with clarity.