New Jersey Bakers find the recipe for entrepreneurship

TRENTON, NJ- On January 10, 2022, legislation was passed by both the state Assembly and Senate to codify Cottage Food production regulations set forth by an administrative rule change that went into effect in October 2021. This was a culmination of efforts by food freedom proponents throughout New Jersey—work that took more than a decade— to see the state end its holdout as the last with a ban on the sale of homemade foods.

Cottage foods are defined as goods made in a home kitchen rather than a commercial kitchen like those found in restaurants, cafés, bakeries, or non-profit establishments such as firehouses, veterans’ clubs, or churches. With these regulations in place, residents seeking a new avenue of income are free to pursue cottage food production. 

What Do the Rules Allow? 

Home bakers and other food producers may now apply for a permit to directly sell their non-time/temperature control for safety (non-TCS) goods to consumers. Eligible items include baked, dried, and roasted products such as cake, bread, cookies, coffees, teas, trail mixes, and nuts, among others. 

Cottage Food Operators (CFOs) cannot ship, resale, or wholesale their goods, but they have a range of marketing options, including client pick-up or delivery, selling at established farm stands, farmers’ markets, festivals, or pop-up retail events. These small businesses may advertise, take orders, and accept payments online, and their gross income is not to exceed $50,000 annually. Before applying for permits, operators must complete food safety training and water testing. CFOs must also follow strict labeling requirements and submit to health inspection upon demand. Violations are subject to penalties. CFO permits cost $100 with renewal every two years.

The Long Road to Food Freedom

The New Jersey Home Bakers Association (NJHBA) was a driving force behind the recent rule change. Martha Rabello, a founding board member of the non-partisan organization of bakers and supporters, said she is pleased with the new regulations. Rabello is a Union County resident who is all too familiar with the struggle of finding an affordable commercial rental kitchen. In 2017, she made the difficult choice to put her custom cookie business on hiatus when child care costs began to negate any earnings. 

"For so many years, bakers fought to bring cottage food laws to the Garden State," Rabello said, "I can't wait to see New Jersey home bakers thriving."

New Jersey’s roller-coaster journey to legalizing home-baked goods began with one woman’s efforts in 2007, according to the NJHBA's Facebook page. Several iterations of the Bakers Bill were stalled in the legislature by a vehement opponent, Democratic Senator Joseph Vitale, chairman of the Health and Human Services Committee. Conversely, in 2016, a partnership between the NJHBA and the non-profit policy law firm, Institute for Justice (IJ), led to a successful, rejuvenated grassroots campaign for cottage food freedom that encompassed the state from the top of High Point to the tip of Cape May.

Frustrated with being stonewalled in the Senate, in December 2017, the NJHBA, represented by a legal team from IJ, filed suit against the state for the right to sell cottage foods. The lawsuit never went to trial but resulted in an offer from the Department of Health to amend the NJ Food Code to create the long-sought Cottage Food regulations, a process that took nearly 18 months. Applications opened last October, and just under 400 permits were issued by mid-January. 

Bakers Ready to Get Down to Business

Union County cake artist Christine Chaillet was surprised by how quickly her permit arrived. She said she's looking forward to scaling up from serving a small clientele to creating a viable home enterprise.  

"I was so excited to receive my first order the same day that I took my business live," she said, "I love to bake. I love the process of starting with ingredients and turning them into something that others can enjoy."

That’s a sentiment shared by Mercer County baker Allison Potts McCoy. She said she was delighted to obtain her permit in time to sell goods for Christmas.

"I am hoping that this will at least be a nice additional income," Potts McCoy said, "But I would be thrilled to be able to build into something full time."

One of the NJHBA's three guiding principles is economic development. Working on the premise that people spend where they live, the organization believes that cottage food laws benefit both producers and their communities. In today's gig economy, every penny counts, and for those now able to supplement their income with cottage food production, the regulations offer potentially life-changing financial flexibility. 

Ann Donoflio is a baker from Cumberland County who said she followed the progress of the legalization efforts for many years. As a widow with a single income, she's hoping to augment her earnings in preparation to retire. Donoflio was elated to receive her permit and take her first orders. 

"It's been a long time coming," Donoflio said, "With baking, I can control my schedule and make a decent wage per hour. I work full-time now, so my baking is just supplemental, but after retirement, I will have the time to do more."

Other bakers are eager to join the wider business community. Dina Millz described getting her permit as an emotional process, as she prepares cookies for Valentine's Day and her first farmers' market booth. Millz, a Morris County resident, recently transitioned to stay-at-home parenting, and she's ready to forge new connections and make an income on her own terms.

"I'm excited about the farmer's market to be able to interact with people and receive real-time feedback on my cookies and my business," she said. 

The economic impact of the cottage food regulations is an obvious boon for farmers' markets seeking new vendors and for the businesses that sell supplies to cottage food producers. Heather Russinko is an NJHBA board member who left a corporate job in 2020 to open Sugar Sisters, a one-stop confectionery supply, party goods, and gift store in Sussex County’s Franklin Borough. She's already seeing the buzz surrounding the regulations. 

"Bakers are looking for new tools, packaging, and colors to experiment with," Russinko said. "Several customers have started the application process, and others have already received their licenses. We are fortunate to be a space where bakers can come to network and shop with one another." 

(From left to right) Lisa Russinko, Heather Russinko, Martha Rabello, Mandy Coriston, Elizabeth Cibotariu, Jennifer Marich, and Courteney Lynn Wilds meet with NJ State Senator Joseph Vitale in Woodbridge, NJ on April 4, 2017. (Photo courtesy of the New Jersey Home Bakers Association)

Where Does the Road Lead Next?

Adopting the cottage food regulations threw the door wide open for home bakers to start their own businesses, but like all new rules, it's not perfect. The New Jersey Home Bakers Association continues a dialogue with officials over a handful of notable matters. 

The first is confusion about which frostings and fillings are considered eligible under the regulations. The NJHBA intends to resolve this issue by following the Texas Cottage Food Law group’s lead and publishing a set of tested frosting and filling recipes for cottage food use. 

Another concern is that, upon publication, home bakers and beekeepers were dismayed to find honey on the list of permissible cottage foods. This created a problem—honey is a raw animal product and has always been, appropriately, regulated by the Department of Agriculture. January's bill passage addressed this by placing honey back under the Department of Agriculture's jurisdiction. 

However, that bill fell victim to the pocket veto on January 18, 2022. Plans are in motion for reintroduction to complete the codification process and rectify the honey glitch. The NJHBA and other organizations, such as the New Jersey Beekeepers Association and the New Jersey Farm Bureau, are vested in seeing it done promptly. 

The third issue facing cottage food producers is pushback from municipalities that may not yet understand the scope of the regulations. The NJHBA fears a breakdown in communication between Trenton, the state’s 564 separate local governments, and producers. The organization’s board members are collecting stories from frustrated bakers as they look to provide resources to those being stymied by municipal zoning and land usage boards. 

These remaining concerns illustrate that effort is still needed to ensure that every cottage producer has the freedom to sell their goods. Regardless, Rabello is grateful for the law and the support of her NJHBA board colleagues, the Institute for Justice, and of course, the Association's membership and followers. 

"I am beyond happy that New Jersey has finally caught up with the rest of the country," Rabello said, "We put in the work, got the word out, collected thousands of signatures, sent thousands of e-mails, and planned many calls to action to our thousands of supporters that never failed to show up for us." 

For more information on the state’s Cottage Food regulations, visit the Department of Health’s website at https://www.nj.gov/health/ceohs/phfpp/retailfood/cottagefood.shtml.

(This is Part I of a series about the impact of cottage food regulations in New Jersey.)