Best Practices for Selling Baked Goods
What is a “Not-Potentially Hazardous” Food Product?
A “not-potentially hazardous” baked good is one that can safely remain unrefrigerated and will not support the rapid growth of bacteria that would make people sick when held outside of refrigerated temperature. Lower-risk food means food in a form or state that is not capable of supporting the growth of disease-causing organisms or the production of toxins. One or more of the following factors usually apply to these foods:
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Water activity (Aw) of 0.85 or less, or
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A pH (hydrogen ion concentration) value of 4.6 or less.
The good news is most cookies, muffins, cakes, and breads are typically not-potentially hazardous and have a low moisture content that inhibits mold growth. It is important to remember not all are and as food entrepreneurs we must prioritize and take responsibility for the safety of our products.
Note: a “not-potentially hazardous” food product is determined by the ingredients and how they interact with each other, not the category of food. The question comes up frequently: “Can I make cupcakes, cookies, etc.” There isn’t a category of food that you can or can’t make, it all depends on the ingredients and how they interact together in the end as to whether or not it is “not potentially hazardous.”
Additionally, foods with cream filling, custard or meat are potentially hazardous and are definitely not allowed. A traditional buttercream frosting made with cream that requires refrigeration would also not be allowed. For example, some baked goods with vegetables as an ingredient such as zucchini bread or banana bread may not qualify as non-hazardous as they are too moist. The Farmstead Bakery: Recipes and Resources project contains a growing list of such recipes that are tested and safe to use.
If you are at all unsure if your item is not-potentially hazardous, you can submit a sample of your recipe to a certified lab that conducts the water activity test that would determine if it meets the official non-hazardous definition per the FDA Food Code of a “water activity value of 0.85 or less” or a pH value of 4.6 or less. When in doubt, always err on the side of caution. Here is UW Extension’s list of Wisconsin labs that perform this test.
Note: we are working on making this testing process at certified labs more “small baker-friendly,” easier to navigate, and more affordable in the future. We'll keep you posted.
Cottage food and producing items in your home kitchen only applies to food products, not food service. You can sell someone a whole bundt cake, but you can’t slice it on site and serve it on a plate for sale. That would be food service and would require various other licensing including a commercial kitchen. Larger items like a bundt cake can be sliced in your home kitchen and packaged individually to sell, but cannot be sold with a fork/plate (i.e., food service).
If you are interested in producing something other than not-potentially hazardous products,, see this resource page from UW Extension with commercial resources.
Where Can We Sell Our Products?
Allowed:
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Direct to consumer sales**, including:
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Selling from your home, such as a customer coming to pick up an order
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Farmers' markets
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Community events
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CSA boxes
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Taking orders directly from customer (i.e. someone places a birthday cake order with you)
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The transaction should take place within Wisconsin. The purchaser does not need to be a Wisconsin resident, but the product should only be sold within the state. Mail order is permitted but again only within the state of Wisconsin. After further review of the matter by the Institute of Justice, while there definitely is a potential legal argument for inter-state sales of cottage food, it is a gray area that requires clarification, and sellers should sell interstate at their own risk. Remember the transaction must still be direct to your consumer; you can’t sell to a retailer, like a café or a grocery store for resale.
** = Be sure to check with any local regulations your town or county may have regarding home-based businesses (i.e., regulations that apply to all home-based businesses, not just home-bakeries). Market managers and event organizers may also have specific requirements.
Not allowed:
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Potentially hazardous baked goods (see above)
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Wholesale sales to restaurants or other retail businesses
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Selling to other states besides Wisconsin
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Slicing a cake and serving it by the piece to customers, which is classified as food service
• If you are speaking with anyone unclear on the fact that we can now legally sell home-baked goods, feel free to give them a copy of this letter written by Erica Smith, the attorney with the Institute for Justice representing the successful lawsuit lifting the ban on the sale of home baked goods that will hopefully clarify things
How Should I Label My Products?
Best and safest practices are to follow the current Pickle Bill for labeling:
1) The statement that “This product was made in a private home not subject to state licensing or inspection.”
2) A list of ingredients in descending order of prominence, including any allergens. The eight most common allergens are milk, eggs, fish, crustacean shellfish, tree nuts, wheat, peanuts, soybeans, and sesame.
3) Your name/business name and contact information
4) The date the item was made.
How Much Can I Make?
• Under the Judge’s ruling, there is currently no gross sales cap for selling baked goods. You can currently earn as much as you want out of your home kitchens (note over 25 other states do not have gross sales caps; it isn’t that unusual). Remember you are a legitimate and legal business responsible for all other aspects of your enterprise, including reporting income, paying taxes, etc., consulting an accountant and/or lawyer as you see fit.
• Note the Judge’s ruling only applies to not-potentially hazardous baked goods and does not affect the current Wisconsin cottage food law covering high acid products (aka the “Pickle Bill”). You must follow the current law in selling these products, which includes a $5,000 gross sales cap.
This all adds up to the opportunity for you to become a food business owner today, right from your home kitchen. With that, you also immediately become an empowered entrepreneur and have the freedom and control to set up and run your business, from establishing a name, managing expenses and accounting, marketing, utilizing food safety practices, etc. Treat yourself as the professional you now are and do your due research and diligence in running your entity professionally – and profitably!
The book, Homemade for Sale: How to Set Up and Market a Food Business from Your Home Kitchen, by Lisa Kivirist (one of the plaintiffs in the Wisconsin case) and John Ivanko covers in much more detail resources for your cottage food business start-up. The second edition was just released! Click here for the book.
