Food Business Education: Navigating Food Permits and Licenses, Part One
Anyone operating in the food space knows that navigating food permits, licenses, laws, and regulations can be very confusing. Some products are governed by local (city or county law), some by state law, and some by federal law. Here in Part One of our educational series, we'll attempt to go over the basics as they pertain to New York and California:
First, some definitions:
"Retail"- any food product produced to be sold directly to the customer. This can be at a farmer's or other food market, catering event, restaurant, meal delivery. etc.
"Wholesale"- any food product produced to be resold by a third party. This would include anything sold to a distributor, grocery store, coffee shop, etc.
In New York City and California, all retail food is regulated by the local city/county. Producers are treated as if they are restaurants or retail locations. However, in both New York and California, wholesale is regulated by the state. In New York, to sell your product wholesale, you must obtain a 20c license from the New York State Department of Agriculture and Markets. In California, you must obtain a PRF "Processed Food License" from the equivalent state agency, the California Department of Public Health. Without these licenses, you may not sell wholesale to a third party who plans to resell your product.
There are a few important food items that fall outside of the above, for good reason. These items include dairy (milk, cheese, ice cream, yogurt, frozen desserts, etc.), meat, and seafood. Let's break those down:
Dairy - Regulated by the state in both California and New York. In New York, a division of the NYS Dept of Agriculture and Markets called the Division of Milk Control and Dairy Services. In California, dairy is regulated by the California Department of Food and Agriculture, Milk and Dairy Food Safety Branch. Both regulators have very high standards for the kitchen and equipment as well as dairy processes. While Hana Kitchens has dairy or "clean" rooms in both locations, the rules for the producers are quite strict. Kitchens and equipment cannot be shared between producers. This is due to the fact that sanitation is such an important part of making a dairy product. Dairy products can grow bacteria and sicken or kill people. It is important to understand this. Also, manual pasteurization is frowned upon. Hana staff can help navigate dairy licenses if this is something you are interested in.
Other food processes regulated by NY and CA state agencies include anything canned or bottled (that will be sealed in an oxygen-free environment), anything fermented (including beverages), and anything that includes a certain percentage of alcohol.
Meat and Seafood - Meat and seafood processed to be sold wholesale is governed by a federal body, the USDA. The USDA has strict rules for kitchen design and production oversight. Meat and Seafood processors must have a private kitchen and equipment, an office for the USDA inspector, and all production runs must be supervised by a USDA inspector. Since the USDA rules are so onerous, many small meat or seafood producers elect to have a large USDA co-packer produce their product for them. Again, these important rules are in place to prevent sickness or death of consumers.
It is important to note that the Food and Drug Administration (FDA) has jurisdiction over all food production, and every food production facility must be registered by the FDA. The FDA also sets labeling requirements and has ultimate regulatory oversight.
In additional to governmental regulatory bodies, if you are selling wholesale to a distributor, grocery store, or other outlet, you may well be asked to run a Third Party Audit. This means that you pay an approved third party to come to your kitchen, inspect your kitchen, observe our production and packing, and examine all of your records. This can also be quite onerous but is becoming more and more commonplace.
One last item to mention is a Cottage Food License. This is a license that the local health department issues that allows you to produce food at your home under certain conditions. Not all states/counties/cities allow this, and even if they do, conditions vary widely from state to state.
That's a good start for now. Look for more in-depth information in Part Two! Please feel free to email the website with anything education you would like us to cover!