A pair of entrepreneurs in a crowded and competitive market — cookies — are off to a viable start, with the help of the Michigan Cottage Foods Law of 2010.
Cookie Chicks is a small business in Ada launched in June by Holly del Rosario of Ada and Tami Pelham of Lake Odessa, and it’s an official Michigan cottage industry operating out of del Rosario’s home kitchen.
Del Rosario said last week their investment so far in Cookie Chicks is “not too much,” mainly in ingredients for the cookies and storage containers.
“One of the really nice things about the Michigan Cottage law is, it doesn’t require me to have all these huge pieces of equipment and inspections and all the other stuff. It’s an incubator stage for us. So we’re kind of trying some things right now — there’s not a huge expense to trying things,” said del Rosario.
The Michigan Department of Agriculture & Rural Development has a website titled “Michigan Cottage Foods Information.” It notes the Cottage Food Law, which took effect in July 2010, exempts a “cottage food operation” from the licensing and inspection provisions of the Michigan Food Law. It still has to comply with the labeling, adulteration and other provisions found in the Michigan Food Law, as well as other applicable state or federal laws or local ordinances.
In a nutshell, the intent of the law is to encourage small business start-ups in home food production but to protect the public at the same time from any potential hazards.
Foods that do not require refrigeration can be produced in a home kitchen, which literally means “the kitchen of the person’s primary domestic residence,” for direct sale to customers at farmers markets, roadside stands or other direct markets. The products can’t be sold to retail stores, restaurants, over the Internet, by mail order, or to wholesalers, brokers or other food distributors.
The exemptions provided by the Cottage Food Law are limited to businesses with annual sales revenues that do not exceed $20,000.
MDARD says “the Cottage Food Law is a great opportunity for many who have been thinking about starting a food business but have been reluctant to spend the money needed to establish or rent commercial kitchen space.” Selling directly to consumers provides an opportunity to “test the waters” to see if operating a food business is the right fit for them.
MDARD notes the law also enables farmers who sell produce at farmers markets to include things like baked goods and jams, which could lead to a full-scale, fully licensed food-processing business.
The MDARD website provides an extensive list of what can and cannot legally be made in a home kitchen for sale.
Cottage foods that can be sold directly to consumers without a license include cookies, bread and similar baked goods, vinegar and flavored vinegars, cakes, sweet breads and muffins containing fruits or vegetables, cooked fruit pies, jams and jellies in glass jars that can be stored at room temperature, dried foods such as herbs, baking mixes, dip and soup mixes, dried fruits and vegetables, popcorn, cotton candy, and chocolate-coated nuts, pretzels, marshmallows, berries, fruit and more.
Foods not allowed include meat and fish in many forms, canned fruits and vegetables, canned pickled products like corn relish, pickles or sauerkraut, milk and dairy products and pies/cakes that require refrigeration, all beverages, cut tomatoes or cut leafy greens, confections containing alcohol, salad dressings, and pet food or treats.
The MDARD website also includes a section on “Ready to Move Beyond Cottage Foods: How to Become a Licensed Food Processor.”
Pelham, who works full time for the state of Michigan in Lansing, has never had a business of her own. Del Rosario had a small but vibrant business more than 20 years ago involving specialized computer networks at nuclear power plants. She sold the business when the demands of traveling began to interfere with raising her 2-year-old son. She was working for Amway until her job was eliminated a few months ago.
The two women have known each other for more than 20 years and became friends while working as volunteers for the nonprofit Cannonsburg Challenged Ski Association at Cannonsburg Ski Area north of Grand Rapids.
Pelham took to bringing “Tami Whammies” to hand out at each event. Her homemade cookies were a big hit with the volunteers and a special treat everyone at CCSA looked forward to.
With del Rosario needing some kind of employment, the two got serious after years of idle talk about starting a small business. Pelham’s cookies were an obvious idea and when they learned about the Michigan Cottage Foods law, the deal was cinched.
The Cookie Chicks have an exclusive marketing strategy that targets corporations in the area. Del Rosario learned from her years in the business world that corporate meetings often include snacks like cookies. They’re also an easy and appreciated corporate gift, an example being the cookies real estate agents sometimes present to clients after closing on a new home.
The two women are already using social media to market their brand, including Twitter. In fact, Cookie Chicks has received some orders but has been waiting for its branded packaging to arrive.
“We wanted everything lined up first,” before they began production, said del Rosario.
Finally they took delivery of the packaging bearing the Cookie Chicks logo, as well as Cookie Chicks headwear, shirts and such. Last week the Cookie Chicks rolled up their sleeves and got busy mixing and baking cookies.
For some small food business ventures with a prospect for growth, a new source of potential funding was just launched June 16: the Michigan Good Food Fund. It is a public-private partnership loan and grant fund that provides financing and business assistance to healthy food production, distribution, processing, marketing and retail projects, benefitting underserved communities. Its dual goals are to increase access to healthy food while driving economic development and job creation.