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An Analysis of Regulatory Schemes Utilized Throughout the U.S. for Home Based Food Businesses: Options Available to Enhance Food Safety

Courtney Rheinhart
Tidewater Regional Manager
Virginia Department of Agriculture and Consumer Services
International Food Protection Training Institute (IFPTI)
2012 Fellow in Applied Science, Law, and Policy: Fellowship in Food Protection

Abstract

As economic growth slows and job loss has risen, many people are turning to the cottage food industry as a way to supplement their income.  Support for local foods has also caused individuals to aspire to start home based food businesses.  Regulators, however, have concerns that allowing foods to be produced in the home kitchen may lead to unsafe food and/or foodborne illnesses.  The purpose of this study was to explore regulatory schemes currently being used by state agencies in regard to home based food businesses.  Further analyses were completed to compare the efforts of the Virginia Department of Agriculture and Consumer Services (VDACS) to various other states’ regulatory actions regarding home based food businesses.  This study showed that there is little uniformity between state agencies when it comes to regulating food products produced in the home kitchen.  This research indicates that state agencies need guidance in order for them to be more uniform concerning home-based food business regulations.  This project also indicates that in Virginia support of the cottage food industry has created multiple inspection exemptions and policies which have negatively impacted its regulatory authority over these types of businesses as compared to other states.

Background

As the economy has weakened and unemployment has risen, the public has begun to look for ways to sustain their income.  Many people are turning to the cottage industry as a way to make extra revenue.  The term “cottage industry” is applied to an industry where at least part of the manufacturing takes place in the private home (Sutton, 2009).  Requests to manufacture food products in private homes are on the rise in Virginia as well as in other states.  The “Buy Fresh- Buy Local” movement also supports small, home based businesses.  This movement encourages people to buy local food products and support local businesses and farmers.  However regulators fear that allowing food to be produced in the home and sold to the public with little or no oversight exposes consumers to dangers from foodborne illnesses and possibly from intentional food contamination (Wolfson, 2009).

Foodborne illness outbreaks and recalls from a food product can be catastrophic to a food manufacturer.  In the case of a recall the firm often must pay to have the recalled product shipped and destroyed.  Recalls can also have damaging effects on the public’s perception of the firm and food safety in general.  Manufacturers may have to spend additional revenue to gain consumers’ trust again and repair their damaged reputation.  This is why the majority of large, non-home based food manufacturers believe that investing ample resources into food safety will benefit their company.

The mainstream food manufacturing industry often relies on third party audits to assure that their processes, personnel, equipment, and establishment conform to food safety regulations and other standards (Hall, 2009).  Normally manufacturers hire a quality assurance manager, someone with extensive food safety knowledge, to oversee how day to day production is conforming to food safety guidelines implemented by regulations and/or their buyers.

Large food manufacturers invest in equipment that not only creates a more efficient process, but that allow the plant to implement effective cleaning practices.  Many of the pieces of equipment found in food processing plants are designed so that crevices and other small openings where physical, chemical, or microbiological contaminants could collect are not present. Choosing this type of equipment helps food manufacturers to be profitable as well as to provide a safeguard to reduce the potential risk of foodborne illness (Koch, 2011).

When food is produced in the private home, often the same standards of safety cannot be met as those in the mainstream food processing facilities.  Owners of home based food businesses do not usually have an extensive background in food safety.  They have not typically taken food safety courses and do not have a clear understanding of the regulations they must comply with.  In addition, they do not have the revenue to invest in third party audits, quality assurance managers, or advanced equipment (Scott, 2003).

A review of studies from both Europe and North America showed that many cases of foodborne illness occur as a result of improper food handling by consumers in their own kitchens (Scott, 2003).  In fact a study conducted in Canada identified the home as the most common exposure location for cases of Salmonella species, Campylobacter species, and infectious E. coli.  Inadequate cooking, reheating, and storage temperatures, cross contamination, and infected food handlers are the most common sources for foodborne pathogens in the home (Scott, 2003).

The private home is a multifunctional setting consisting of residents of various ages and health conditions, which may impact food safety.  Humans and animals living in the home may serve as sources of foodborne pathogens and both can be symptomatic or asymptomatic carriers. Pets living in the home can range from typical to exotic and foodborne illnesses can be acquired from either.  Salmonella and other pathogens that cause intestinal illnesses are associated with household pets such as dogs or cats (Scott, 2003).

In Virginia few restrictions are placed on home based food businesses.  As long as a home based food business fills out an “Information Request Sheet for a Food Processing Operation”, has their recipes and processes approved, can comply with the laws and regulations, and has their operation inspected by VDACS, there are no laws that prohibit the sale of a particular type of food product that falls under the program’s jurisdiction.  Therefore the types of foods produced in the home can range from cookies and cakes to baby food and acidified foods.  In addition, for home food based businesses that are under inspection in Virginia there are also no limitations on where these products can be sold.  A home food manufacturer may sell their product directly to a consumer or they may sell to a retail establishment in another state.

In Virginia there are also certain home based food businesses that are exempt from routine inspection.  Overwhelming support for the cottage food industry allowed Senate Bill 272 to be enacted in 2008.  This bill exempts from inspection “private homes where the resident processes and prepares candies, jams and jellies not considered to be low-acid or acidified low-acid food products and baked goods that do not require time or temperature control after preparation if such products are:  (i) sold to an individual for his own consumption and not for resale; (ii) sold at the private home or at farmers markets; and (iii) labeled “NOT FOR RESALE – PROCESSED AND PREPARED WITHOUT STATE INSPECTION” (Code of Virginia, 2011).  Every year additional legislation regarding inspection exemptions for cottage foods are proposed to the General Assembly.

Although VDACS requires the majority of home based food manufacturers to be under inspection, limited resources are available to carry out these inspections.  As of January 2011, there were over 12,000 food facilities on file with the department and 27 inspectors throughout the state.  Home food manufacturers cannot be inspected as often as they should be, usually once every 2 years for a low risk firm.  Mainstream non-home based food manufacturers are usually inspected at least once per year.  When inspections are conducted of mainstream, non-home based food businesses, the inspections are unannounced, allowing the inspector to determine if the manufacturer is adequately assuring that routine practices are conducted in a safe and sanitary manner.  On the other hand, inspections of home based food manufacturers are scheduled.  Therefore, inspectors are unable to determine whether the conditions they observe are representative of actual conditions that would be noted during unannounced inspections.

Problem Statement

Home based businesses present unique food safety and defense challenges to regulatory agencies throughout the United States.  Since there may be few restrictions on the types of food products that can be produced in the home and where these products can be sold, there is the potential of an increased risk of unintentional foodborne illness outbreaks, as well as intentional contamination of home produced food products.  State food regulatory agencies may not be aware of all regulatory options available or the positive impacts these options may provide.  Exploring how other regulatory agencies throughout the United States regulate home based food businesses will provide policy makers in Virginia and in other states with additional options in regards to modifying regulatory oversight of these types of businesses.

Research Questions

What are the commonalities and differences of state regulatory requirements for home based food businesses in the United States?  How does the state of Virginia compare to national estimates of state regulatory requirements for home based food businesses in the United States?

Methodology

An analysis of existing state regulatory policies and procedures for home based food manufacturers was conducted.  Key personnel from 49 state agencies (all but the state of Virginia) who are responsible for food related regulatory programs were contacted via email and asked to participate in an online survey using SurveyMonkey to gather data related to the subject matter.  The survey contained 24 questions which were developed to address regulatory schemes currently in use by other state agencies.   Policies and procedures currently being used by other states were then compared to the approach currently being used by VDACS.

Results

Of the 49 state agencies polled throughout the country, 40 responded to this investigator’s survey.  Nine (22.5%) of the survey participants indicated that their state’s policies, procedures, or regulations do not permit the sale of food products manufactured in the home kitchen, while 31 (77.5%) responded they do permit the sale of these type of food products.  Of the 31 state agencies that allow the sale of food products manufactured in the home kitchen, 30 (96.8%) responded that they place restrictions on the types of food products that can be sold.  Figure 1 shows the response to the second question of the survey which asked about the types of food products manufactured in the home that may be sold.  The survey asked the respondents to check all types of food products that apply.

(Figure 1:  Types of Food Products Manufactured in the Home Kitchen that Can be Sold – Results – States Reporting = 31)

Respondents did not use the “Other” block to address other types of food products, but instead used this block for further explanation.  For example one respondent wrote in the “Other” block that “A home food license….is limited to bakery items only.”

Out of the 30 states that place restrictions on the types of food products that can be sold, 17 (56.7%) stated they only allow the sale of non-potentially hazardous food items.  Of those 17, three responded that they place even further restrictions on the specific types of non-potentially hazardous foods that can be sold.  One agency stated in the survey that they only allow non-potentially hazardous baked goods, dried herbs, and jams and jellies.  Another responded that they only allow non-potentially hazardous products that are baked or a confectionary good.  They do not allow jams, jellies, or canned/bottled products.  Finally, a different state agency replied that they allow only certain baked goods such as cookies, bread, and buns to be manufactured and sold from the home kitchen.  Of the 31 state agencies that allow home based food businesses, only four (12.9%) allow the sale of potentially hazardous foods.  Only one state agency answered that they allow the sale of all types of food products (non-potentially hazardous food products such as cookies, jams, jellies, chips, etc; potentially hazardous food products such as cream filled pies/cakes, meat products, deli salads, etc.; acidified foods such as salsas, pickled products, etc; low acid canned foods such as canned green beans, etc, bottled water).  However after calling an official at the state agency, they clarified that meat products cannot be produced from the home kitchen and they require acidified or low acid canned food producers to have their product/process approved by a third party.  The official also stated at this time the agency does not know of anyone producing low acid canned foods from the home kitchen.  Of the 30 states that place restrictions on the types of food products that can be sold, 22 (73.3%) also answered that they place restrictions on where these products can be sold.  Figure 2 shows the response to the third question of the survey which asked where food products produced in the home kitchen can be sold.  The survey asked respondents to check all choices that apply.

(Figure 2:  Places Where Food Products Manufactured in the Home Kitchen Can be Sold – Results – States Reporting = 31)

Fourteen (45.2%) of the 31 state agencies that allow food products to be manufactured in the home replied that they license home based businesses, while 17 (54.8%) stated they did not.  Of the states that responded to the question on whether they had the authority to inspect home based food businesses, 18 (60%) stated they did have the authority, while ten (33.3%) responded they did not.  One respondent stated they were unsure whether their agency had the authority to inspect home based food businesses.

Of those states that responded to the survey question that asked whether they had any formal regulatory authority over home based food manufacturers, all but two state agencies responded they had some type of regulatory authority over these establishments.   Types of regulatory authority included detention/embargo/seizure authority; civil or administrative fines or penalties; injunctive relief; authority to suspend or revoke a license; closure authority; and others.

When asked whether the state allows certain inspection exemptions for home based food manufacturers, 15 (71.4%) responded that they do have exemptions, while six (28.6%) responded that they do not.  Six states (22.2%) responded that they require operators of home based businesses to attend some type of training.  These trainings varied from attending Better Process Control School to obtaining a Food Handler’s Card.  Twenty-seven of the 29 states (93.1%) that responded to the survey question asking whether their agencies required foods produced in the home kitchens to be labeled responded that they did.  Of those, 14 (51.9%) responded that the label must include a caveat that the food was manufactured without inspection by the State regulatory authority.

Although most state agencies (56.7%) that responded to the survey answered that they only allow non-potentially hazardous food items to be produced in the home kitchen, VDACS allows both potentially hazardous and non-potentially hazardous food items to be produced in the home kitchen. While 73.3% of state agencies place restrictions on where these types of products can be sold, VDACS allows these products to be sold anywhere.

The data compiled from this study shows that although most state agencies allow the sale of food products manufactured in the home kitchen, the majority place some type of restriction on these types of businesses.  These restrictions may involve the types of food products that can be manufactured, where those food products can be sold, training for the operator, a certain labeling requirement, or all of the above.

Conclusions

This survey revealed that regulatory authority varied greatly among state agencies.  The research showed that there is a lack of uniformity in regards to the regulations used to oversee home based food manufacturers.  Many agencies may feel the best way to protect public health is to place restrictions on the types of products produced in the home kitchen and where these products can be sold.  However other agencies believe that these types of operations will exist whether restrictions are in place or not and therefore it is best to inspect every operation and provide training and guidance to operators.

It is clear from the results of this survey that VDACS does not place as many restrictions on home based food businesses as other states.  Providing educational outreach to home based food operators in Virginia may address the current lack of regulatory authority over these types of businesses.  In addition, addressing legislators and policy makers with these survey findings may also prove useful and help to prevent additional inspectional exemptions from being enacted.

Recommendations

Based on the results of this survey it is recommended that the Association of Food and Drug Officials (AFDO) submit their Cottage Foods Regulatory Guidance document to the Conference of State Legislatures for potential adoption at the state level.  State agencies should readdress their regulatory scheme regarding home based food businesses so that the approach used matches up more closely to the AFDO guidance document.   In addition other research should be conducted to address training needs of home based food business operators.  In order to address any lack of regulatory oversight over these types of food businesses, state agencies should invest resources in providing training and information to operators of home based food businesses.  This information could be posted on the agency’s website or an online training program could be created to allow operators to become more familiar with food safety regulations.

Acknowledgements

I would like to recognize the following individuals and entities for their support and contributions to this study:  my mentor, Dan Sowards; The International Food Protection Training Institute (IFPTI); The Association of Food and Drug Officials (AFDO); Dr. Craig Kaml, Vice President, Curriculum, IFPTI; Dr. Kieran Fogarty, Acting Director of Evaluation and Assessment, IFPTI and Associate Professor, Western Michigan University; Joseph Corby, Subject Matter Expert (SME), IFPTI and Executive Director, AFDO; all of the Subject Matter Experts (SMEs) that participated in this cohort of the Fellowship program; the IFPTI staff; and the Cohort 2 IFPTI Fellows.  I am specifically extremely grateful for Shana Davis, Senior Environmental Health Specialist, Lexington-Fayette County Health Department and Shane Thompson, HACCP Coordinator, Wyoming Department of Agriculture, for providing guidance and constantly making me laugh throughout this process.   I would also like to acknowledge Pamela Miles, Program Supervisor, Food Safety and Security Program and Doug Saunders, Deputy Director, Division of Animal and Food Industry Services, both with the Virginia Department of Agriculture and Consumer Services for allowing me to participate in the Fellowship and supporting me throughout my journey.  Thank you to Rick Barham, Regional Manager, Virginia Department of Agriculture and Consumer Services, for his amazing editing skills.  Finally I would like to express my gratitude to Gerald Wojtala, Executive Director, IFPTI, for the opportunity to participate in this Fellowship.  It has truly been an honor to work with such a wonderful group of people.

References

Article 3.2-5130.  Miscellaneous Subjects.  (2011).  Code of Virginia.  Retrieved from http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+3.2-5130

Hall, Paul.  (2009, March 26).  The Value of Third Party Independent Audits in Assuring Food Safety:  Are They Truly Independent? A Presentation at IAFP’s Symposium on Salmonella in Peanut Products – Understanding the Risk and Controlling the Process.  Retrieved from http://www.foodprotection.org/files/rr_presentations/RR_09.pdf

Koch, Bob.  (2011).  Packaging Equipment Design and Food Safety.  Food Manufacturing.  Retrieved from  http://www.foodmanufacturing.com/scripts/ShowPR~PUBCODE~033~ACCT~0002488~ISSUE~0401~RELTYPE~PR~PRODCODE~009955~PRODLETT~A.asp
Scott, Elizabeth.  (2003).  Food safety and foodborne disease in 21st century home.  The Canadian Journal of Infectious Diseases.  Retrieved from:  http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2094945/

Sutton, Jim. (2009). Cottage industry may save modern America. Home Run Business. Retrieved from http://www.homerun-business.com/cottage_industry.htm

Wolfson, Joshua. (2009, December 21). New rules prompt debate over food licensing. Trib.com Retrieved from http://trib.com/news/local/article_e7c3b293-7693-5e77-9bff-192066686e99.html