Minnesota’s laws for home-based food businesses are better, but still not the best

Home food producers can now earn more with increased avenues for sales.

Home food producers can now earn more with increased avenues for sales. Star Tribune

Jessica Olson spent 15 years as a chef before she realized she’d had enough.

“It’s all-encompassing. It takes over your whole life,” she says. 

So, what’s a lifelong culinarian supposed to do when the most obvious career path is not personally or financially sustainable?

There are thousands of people trying to make a business out of selling their famous pickles, jams, or pies on a small scale in Minnesota. But home-based food production is an enterprise fraught with obstacles. Many would-be entrepreneurs toss in the kitchen towel before they even begin.

Up until June of 2015, Minnesota’s home-based food production regulations bordered on draconian. First, and most problematic, this cottage industry's sales were capped at $5,000 annually (an average of just $96 per week) gross income.

It's hardly a number worth the effort and cost of running a small-scale food business.

Those efforts and costs include taking a class and a test on food handling recognized by the Commissioner of Agriculture, submitting to an inspection by the Commissioner of Agriculture, following specific labeling guidelines, the cost of product and packaging, plus the cost of a market booth required to sell. 

Taken together, many small producers might even wind up with a financial loss. This was a recipe for a hobby, not a business. 

What's more, there were only two legal avenues for sales: farmer’s markets and community events. No selling direct to the consumer from home, no selling across state lines, no selling on the internet, no selling to other businesses for resale. No, no, no.

In November of 2013, two local bakers filed a lawsuit challenging the restrictions in the State of Minnesota with the help of the Institute for Justice, the country's only libertarian, civil liberties, and public interest law firm. The court dismissed the lawsuit in 2014, but the Minnesota Court of Appeals reversed that decision and reinstated the claims in May 2015.

In June of 2015, new laws were passed, eliminating the sales venue restrictions and raising the sales cap to $18,000.

While that $18,000 is certainly better, about a 300 percent increase, it’s still not quite enough to make a living, especially once you account for the cost of doing business. And according to Michael Bindas, an attorney with the Institute for Justice, in order to challenge that $18,000 cap, producers must demonstrate that they could stand to make above $18,000 a year in sales. 

The good news is that since the new laws were passed, there are more avenues for sales including the internet and direct maker-to-consumer sales. If you make a wedding cake at home, you can now be the person who delivers it to the reception, rather than having the best man stop at the farmer’s market and pick it up on the way.

But still, the allowable products for home production are limited, and include baked goods, certain jams and jellies, canned pickles, vegetables, or fruits with a pH of 4.6 or lower.

Verboten are most other condiments, any custard or egg-based desserts or pastries, fresh foods of any kind (popcorns, many salsas, hummus, most prepared foods such as salads, sandwiches, lemonade, ice tea, etc.) and some bitters and shrubs if the PH is not low enough.

Yes, technically lemonade stands are still illegal, unless the kid uses a commercial kitchen to produce the lemonade and gets a permit from the Department of Agriculture or the City of Minneapolis. Go ahead and take your chances when encouraging little Suzie to raise her own Legos money.

Home producers are also still forbidden from doing any business-to-business distribution. Wayne and Cindy Rusch, of Rusch Farms LLC, have been selling their jam, honey, baked goods and pickles to the farmer's market circuit since 1976. But they cannot sell their products in storefronts because that would require they use a commercial kitchen, a difficult and expensive proposition for small producers. 

All the same, it’s estimated that about 3,000 more home producers have registered with the state since the restrictions were eased. Jessica Olson recently launched Best Cellar Pickle Company. She makes interesting preserves and and jellies in flavors like balsamic onion and grapefruit wheat beer; plus pickled vegetables and a mushroom jerky that's been a hot item for her. She still has to work in restaurants part time to make ends meet, but it's a start, one she didn't have just two years ago. 

We’re hardly the most progressive in the nation. The state of Wyoming allows home producers to sell anything at all that they like, with the exception of federal restrictions on the sale of meat. Things seem to be panning out just fine. “I haven’t heard of people dropping dead in Wyoming,” says Bindas.

But here’s something to make us feel a little bit superior: Our neighbors in Wisconsin ban selling home-baked goods altogether, a sin punishable by law. The Institute for Justice is currently working to challenge their laws too, hopefully releasing thousands of Racine Danish Kringles from culinary oppression.