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Federal Regulations for a Small Home Food Business

By Stephen Bucaro

When thinking of what kind of business you would like to start it's a good idea to begin with the pyramid of human needs; food, shelter, clothing, and transportation. Note that food is at the top of the list. Everyone needs to eat. That's why food related businesses are among the most popular choices for starting a home business.

However, because of food safety, food businesses are one of the most highly regulated businesses. Many of the regulations and licenses required are at the state level, and they very state by state, so you'll need to investigate food business regulations for your specific state. The moment your product is sold across state lines, your business is subject to federal regulation. In the United States, federal regulations governing food safety are fragmented and complicated.

There are federal 15 agencies sharing oversight responsibilities in the food safety system. The two primary agencies are the U.S. Department of Agriculture (USDA) Food Safety and Inspection Service (FSIS), which is responsible for the safety of meat, poultry, and processed egg products, and the Food and Drug Administration (FDA), which is responsible for virtually all other foods.

If your food business is at the farm level and involves growing and selling vegetables, grains, meat, poultry of eggs, you'll be dealing primarily with the USDA. If your food business involves manufacturing, packaging, or distributing food products, you need to understand FDA regulations. The FDA is charged with enforcing the Federal Food, Drug and Cosmetic Act and related public health laws.

The FDA is involved in overseeing that food manufacturers follow production standards and use good practices. They inspects and approve food products for wholesomeness and safety. They also inspect cosmetic products for good manufacturing practices. If they believe a food product or cosmetic product is unsafe for public health, they can issue a recall. At the time of this writing you can find more information here: Federal Food and Drug Regulations

The FDA is responsible for enforcing packaging regulations. Businesses that are engaged in manufacture, processing, or packing of low acid or acidified foods must register with the FDA on Form FDA 2541. This form must be filed not later than 10 days after the firm engages in operations. In addition, the firm must file a scheduled process with the FDA on Form FDA 2541a not later than 60 days after registration, and before packing any new product.

The FDA is also responsible for enforcing food labeling regulations. Labels must list ingredients to help consumers choose foods with ingredients they want or need to avoid. Food labels allow consumers to compare one product to another. They should give instructions for safe handling and storage of the product, as well as identify the firm responsible for the product. At the time of this writing you can find more information here: FDA Food Labeling Guide

You can get a food-labeling exemption if your small-business doesn't exceed certain parameters. One exemption, for low-volume products, applies if the person claiming the exemption employs fewer than an average of 100 full-time equivalent employees and fewer than 100,000 units of that product are sold in the United States in a 12-month period. Another type of exemption applies to retailers with annual gross sales of not more than $500,000, or with annual gross sales of foods or dietary supplements to consumers of not more than $50,000. At the time of this writing you can find more information here: Small Business Nutrition Labeling Exemption