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Cottage food law change marks victory for small businesses

Circuit court ruling allows home kitchens to sell shelf-stable foods directly to consumers

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March 10, 2023

NORTHEAST WISCONSIN – Dianna Diehl has been making truffles for family and friends for more than 30 years.
But, that was as far as it ever went.

However, Diehl – co-owner of Adam’s Heirlooms – said a decision by the Wisconsin Circuit Court in December 2022, which eliminated a licensing requirement for people and businesses to sell nonhazardous homemade food directly to consumers, opened up new opportunities for her.

Diehl said she didn’t hesitate to make her truffles available to customers through the already-established Adam’s Heirlooms, a farm-based business.

“We immediately added the truffles and chocolates (to our offerings) because that’s something I’ve been doing as a hobby,” she said. “I’m already passionate and have a love for it, and to bring that to people immediately and bring that income to the farm was a blessing in our lives.”

The cottage law
The Wisconsin Cottage Food Association won its lawsuit against the Wisconsin Department of Agriculture, Trade and Consumer Protection Dec. 28, 2022, which in turn opened up a variety of opportunities for home-based businesses. 

According to the association, the ruling covers all nonhazardous items, such as cocoa bombs, fudge, most candies, roasted coffee, Rice Krispie treats, fried doughnuts and other items that do not need to be time or temperature controlled for food safety?
According to the Institute for Justice, a public interest law firm that represented the Wisconsin Cottage Food Association in this lawsuit, the Badger State had the most restrictive cottage food laws in the nation prior to this ruling.

“We look forward to continuing to defend the rights of home entrepreneurs,” Justin Pearson, Institute for Justice senior attorney, said.

Barriers could disappear for business owners
Diehl said she has faced some difficulties in working around the state law prior to this ruling.

“There were definite barriers (present) in order to produce a lot of value-added products,” she said. “There were a lot of regulatory requirements, whether it’s for the truffles we’re making now or other items we plan to make, like spice blends, dehydrated foods or freeze-dried foods.”

Diana Diehl, co-owner of Adam’s Heirlooms, immediately introduced truffles to her product line as a result of the court ruling. Submitted Photo

Prior to the law change, Diehl said a commercially licensed kitchen was required if products were being sold to customers.

“If you were going to make a spice blend, you’d have to take all your dry ingredients and your equipment to a licensed kitchen, or you had to have one yourself,” she said. “For us, the closest licensed shared kitchen we could go to is almost 30 minutes away.”

Diehl said those kinds of regulations can be difficult for a small business owner to navigate.

“That’s time away from the farm, time away from family to do this and then that doesn’t become practical,” she said. “You had to leave all your equipment at the shared kitchen. You couldn’t take it back and forth. So, there was a lot to consider to add one new product.”

Diehl is not the only local business owner who had to navigate the regulations.

Betsy Wijas, owner of Batter Up Bake Shop, works out of her home making cocoa bombs, which she started in the fall of 2020.

“It was when COVID hit, and everyone was in their homes and wanted something fun and interesting to do with their kids,” she said. “They went off well, and I planned to do them for Christmas. Then I found out that as a home baker in the State of Wisconsin, you could only make actual baked goods – they had to be in an oven. Cocoa bombs are considered a confection, so that was one of the many things you couldn’t make as a homemaker.”

Although difficult, Wijas said she wanted to find a way to continue making the cocoa bombs.

However, she said it wasn’t an easy process. 

“I found a coffee shop/restaurant in my area that allowed me to come in and use their commercial kitchen space to make them,” she said. “So, I went from completely being a home baker where I could do things around my kids and my family schedule, to packing up half my kitchen and driving 20 minutes away a couple of nights a week, some nights working until 2 a.m. in their commercial kitchen when the restaurant was closed to be able to keep up with the demand.”

Frankie Lee Johnson, owner of CreativeLee Yours Cakes & More, said she also faced similar barriers.

“I was able to use some of (Oneida’s) kitchens, which are commercial kitchens you can rent,” she said. “I was able to use that and then pay the renters fee they had.”

Johnson said when those kitchens closed during the COVID-19 pandemic, she had to look for other options.

Frankie Lee Johnson, owner of CreativeLee Yours Cakes & More, said she had to rent area commercial kitchens in order to fill orders. Submitted Photo

“But the cost can add up,” she said. “Some of the kitchens in Green Bay charge $15-20 an hour. So, you have to have everything set out and planned so you’re not spending more money than what you’re making.”

Creativity can flourish under this ruling
Being able to do more things within their own space affords business owners, such as Diehl, Wijas and Johnson, more opportunities for success.

“As a food historian, I am constantly researching, and I love to look back at history for ideas we can bring forward to today,” Diehl said. “So, something I’ve been playing around with in my own kitchen for a couple of years were different spice blends and herb blends from history. There’s a fabulous blend called kitchen pepper. It is a unique spice blend that has more sweet spices in it, as well as pepper and salt. It’s a savory mix, but different from most spice ones we find today. So, we’re looking forward to that.”

Johnson said the flexibility of being able to offer more to her customers with the law change is a victory for her business.

“For baby showers and wedding treats, chocolate-covered Oreos, chocolate-covered pretzels or Rice Krispies, those will be things I will be adding to my permanent menu,” she said. “Even cake pops, because before, I was unsure (about adding them) because it was such a new product that people weren’t sure if you were allowed to offer it or not.”

Johnson said the law change gives at-home entrepreneurs the ability to not limit themselves when it comes to being creative.

“Being able to offer things that people are seeing in other places or grocery stores or online – they ask for it and you have to tell them, ‘I can’t legally offer that to you,’” she said. “There are times when you have to make that decision. It would be nice to be able to be creative and not have to say no.”

A victory for small businesses, entrepreneurs
For small businesses and entrepreneurs who specialize in food products, Lisa Taylor, the Center for Entrepreneurship coordinator at Northeast Wisconsin Technical College, said the cottage law change is a win.

“I understand, and I think we all understand, the need for certain regulations, especially when it comes to safety issues,” she said. “But, I do think eliminating barriers that may no longer serve a purpose is helpful to entrepreneurs. It is nice when those laws are examined and looked at in a common sense kind of way.”

This sort of law change, Taylor said, can even serve as an ignitor for new entrepreneurs to step into the food industry.

“The entrepreneurs I work with are usually ‘solopreneurs’ – where it is just those individuals,” she said. “Many of them would like to be able to start their business from home because that’s going to save them a lot of money. If they don’t have to get licensed the way other food businesses do, that’s going to remove cost and another hoop they may have to jump through. So, I think allowing these types of food businesses to start in their own homes encourages more entrepreneurs to enter this industry.”

Taylor said when a region has more entrepreneurs in it, everyone in that region benefits.

“It’s going to help to grow their local economy,” she said. “And in our area of the state, there’s a lot of rural areas (that) may struggle to grow their economies, and the families in those areas need to be able to support themselves. So, more entrepreneurs in a region like this is a win for the entrepreneur and their family. It’s a win for the local economy, and it’s a win for their customers who are looking to buy those particular products.”

Diehl echoed Taylor’s thoughts on the impact entrepreneurs can have on the big picture.

“It opens up opportunities,” she said. “Any small entrepreneur that wants to bring in some extra income to support their family, especially in times like this, that’s critical.”

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