An Overview of Iowa Cottage Food Laws
Cottage food laws are regulations that govern how small-scale food producers can sell and distribute their homemade and home-processed products. These laws aim to establish a framework that enables entrepreneurs to sell their goods without the burden of formal licensing, while still ensuring that these products are safe for consumers.
In Iowa, cottage food laws are designed to promote local food entrepreneurship and encourage economic development within the state. The laws offer a unique opportunity for small business owners who may otherwise not have the resources to invest in the infrastructure and licensing required to enter the food industry. Through the Iowa cottage food law framework, small-scale food producers can establish their businesses in a streamlined and efficient manner.
The cottage food law also helps to ensure a standard of quality and compliance with health and safety codes in the production of homemade food products . This ensures that consumers can trust the safety and quality of the products they purchase. The Iowa cottage food law sets out specific guidelines for the types of products that are eligible for cottage food sales, as well as the requirements for tracking sales and maintaining accurate records.
In addition, cottage food laws provide a mechanism for regular inspections of cottage food businesses, providing an additional level of consumer protection. This also helps to ensure that food safety standards are being followed, which is essential for maintaining public health.
Overall, the cottage food laws in Iowa are beneficial to small-scale food producers and local economies. They offer an opportunity for entrepreneurs to start their businesses and contribute to the local economy. They also promote healthy, locally produced food and provide consumers with access to these products.
Necessary Requirements for Iowa Cottage Food Producers
To be eligible for this exemption, producers must meet certain criteria: They prepare foods at home that can be safely prepared without the need to be licensed by the Department of Inspections and Appeals (DIA) Food Safety Program. These foods are generally low in moisture and do not permit the growth of microorganisms. (830 Iowa Administrative Code (IAC) 12.1(27)) The cottage food producer should sell less than $50,000 per year in gross revenues. The producer registers with DIA (Section 1.4 and 1.5 of the Cottage Foods Rule). See registration requirements below. The producer posts a placard indicating that foods offered have not been prepared in a licensed kitchen but instead, by an "unlicensed" or "provincially licenced" kitchen (see310 IAC 35.9(2)). The producer maintains accurate production and sales records, including recipes, ingredients and volume produced and sold. (Section 2.6 of this rule) The producer submits product samples for laboratory analysis when requested and pays any associated costs for those analyses. Keep in mind that these are only guidelines. You should first find out if you are eligible under the Iowa Cottage Food Law before doing anything else.
What You Can Make and the Limits on Sales
The scope of Iowa’s cottage food law is defined by Iowa Code Section 137F.1, which includes a list of permissible foods and the conditions under which they can be sold. Under the law, there are four categories of food that fall within the regulatory scheme: nonpotentially hazardous foods, potentially hazardous foods, restricted foods, and ready-to-eat foods.
Nonpotentially hazardous foods are the star of cottage food law because they require little to no oversight and are easy to produce. Preserves, honey, popcorn balls, vegetable chips, jams and jellies, all fall into this category provided they are produced and sold in accordance with a set of guidelines established in statute. (More on those guidelines below.) These foods are simple to make and safe to sell because they are shelf-stable and do not have any components that require refrigeration. They represent a great opportunity for people interested in producing food from their home for resale.
Potentially hazardous foods include anything with the potential to support the growth of pathogenic organisms. In other words, if it has the potential to make someone sick, it should not be sold under cottage food law—it requires permits, inspections and the works. Restricted foods are those with certain dietary or special-interest restrictions. Think gluten-free, vegan, etc.
Perhaps most interesting are the restrictions around ready-to-eat foods. For Iowa cottage food law fans, however, these restrictions may come as a source of frustration. Essentially, ready-to-eat foods cannot be sold under cottage food law because they are more difficult to track over the course of their shelf-life. So, a producer selling a preserved food is fine under cottage food law, but they cannot sell ice cream under cottage food law because it is ready-to-eat food. These products must be subject to the full panoply of ordinances and regulations applicable to food production and sales (think restaurants).
So what are the sales limits? Under Iowa law, cottage food manufacturers may generate up to $35,000 per year. Once they exceed that amount, they need to be subjected to more rigorous standards. However, cottage food producers are not required to register until they hit $50,000 in annual sales. Also, the law restricts the types of sales a cottage food business can make. To remain a cottage food business, these businesses must make their sales directly to the consumer. This does not include e-commerce.[i]
Navigating Labeling and Packaging Regulations
For Iowa cottage food producers, labeling is an important aspect of ensuring that customers consume their products safely and have basic information about what they are consuming. All cottage food products must be sold with a label that contains at minimum the following details: As an alternative to providing the address of the cottage foods producer on the packaging, a producer can include a QR code on the packaging that provides this information when scanned instead. Packaging is also regulated in the Iowa cottage food laws. Finished cottage food products must be properly packaged to ensure protection from contamination and from pest infestation. Packaging for cottage foods may not include any metallic elements or any materials that could potentially be toxic if they were to contaminate the food inside the packaging.
Where You Can Sell Food in Iowa as a Cottage Food Producer
Cottage food products can be sold in many different venues and settings in Iowa. The cottage food operator ("CFO") can sell in a number of different locations at the farmer’s market, in an online marketplace, or face-to-face with an Iowa consumer. The CFO is not restricted in any way to the regulatory demand or production limitations of commercial food manufacturers. From a marketing perspective, these various marketplaces present different risks and rewards.
Sales can be made on the CFO’s own property, at shows and exhibits (the CFO must pay attention to exhibit rules and regulations), or at a roadside market. However, if the CFO’s space is a building (such as a home), that space must be licensed and permitted by the local department of public health (more than 25 people a day requires a license – R.I.C.A., p. 16). With respect to a building, the CFO must have a license for any given period of time for $35, $50, or $75 according to number of persons allowed through the building. For 1-25 people per day, $35 for a 21-day license. For 1-50 people per day, $50 for a 21-day license. For 51-100 people per day, $75 for a 21-day license.
A roadside market includes a self-stand, a physical structure, a trailer, or other movable object used to offer food products for sale to the public. It does not include a display of food products from a private residence or building unless the display is on a publicly accessible sidewalk.
Iowa cottage food products can be sold at farmers markets or farm stands, at craft shows, as well as in establishments such as convenience stores and gas stations. The CFO may sell to wholesalers or distributors as long as the products are sold as-is, without repackaging, without refrigeration, and without additional processing by the wholesaler or distributor.
Cottage food products can be sold at a craft and flea markets, antique shows, and other public expos .
Cottage food products may also be sold at a "community supported agriculture (CSA) market." A CSA market is located at a site that CSA members are invited/required to meet to pick up products from each designated member of the CSA or to pick up products from multiple producers at a single site. A CSA market may be held at a permanent retail food establishment or a producer’s home. A common use is a full-service grocery store for pickup of product ordered in person or online. These markets may operate in a rural or urban setting and may include additional items produced by the market partner or provider. CSAs are contractual agreements, while farmers/farm stands may not (See IAC Rule 481-31.5(137F)).
The cottage food producer should consider varying his or her market choice based on the season, local climate conditions, product availability, feasibility, convenience, and family and personal preference. For example, in Hawarden, which is in the western corner of Iowa, two sisters opened a jam stall in May 2010 that also sells honey, fruits, vegetables, eggs, and turkey. In addition to their business, the couple hosted a weekly Saturday morning community breakfast featuring farmer’s market produce. In the winter months, the couple decided to change their hours from six to five days a week. They still have a vibrant business that services their community.
Cottage foods are purchased "as is" by the final consumer, not to be remanufactured or processed by the purchaser. For example, a farm-to-table restaurant cannot purchase cottage foods and then offer them on their menu. This does not mean, however, that the CFO cannot sell wholesale. wholesaling is allowed. A retailer can purchase the cottage food products from the CFO and resell the products to the final consumer provided that the retailer does not remanufacture or process those products and resell them to the ultimate consumer.
Liability Concerns and Insurance for Iowa Cottage Food Businesses
Even though liability is not currently an issue with cottage food law, there are other business liabilities that are important to consider, such as personal liability, product liability, and business liability. Personal liability includes issues that come with running a business in general, such as premises liability, a slip and fall by a customer on your property, an injured delivery person from a fall or other injuries, a dog bite, etc. Luckily, this type of liability is covered under a homeowner’s policy. Property liability covers damages or destruction of your personal property through acts of nature, burglary, or other causes. Also covered under a homeowner’s policy. Product liability covers injuries or damages caused by your product to other people or property. Business liability covers vicarious liability (making you legally responsible for the actions of your employees) and product liability. It is extremely important to have commercial liability insurance to avoid being personally liable for your product, services, and premises. A business owner insurance policy is not required but is recommended.
Assuming you are not distributing food products to hospitals, nursing homes, or children’s camps, do you need product liability coverage? If someone were to suffer as a result of your product, regardless of whether it is a result of negligence or not, that individual might pursue any number of lawsuits against you. With a cottage food law exemption in Iowa, producers are currently shielded from some of those lawsuits. In Iowa there is no suit against you for strict liability (no charge of negligence) and there is no suit for any damages if the person has not suffered from an injury (sickness) from eating your food. However, if you have insurance, you will be protected from claims touching on any of those concerns covered under the insurance policy. It is important to note that once a person has suffered an injury from your product, you can be sure that you will be sued under a variety of legal theories. Your chances of winning against an injured individual are lessened if you do not have liability coverage which would guarantee payment to the injured individual. It is possible that the injured individual would receive less money than what the jury actually found for the individual because the corporation (the entity is named in the lawsuit) doesn’t have enough money. The injured individual is then likely to name you as an individual in the lawsuit thereby avoiding all protections that the corporation previously provided you. There are many reasons why you want to be able to pass that liability to the corporation and/or its insurer by having insurance. Otherwise, you will likely find yourself personally liable for the very risky business that you have undertaken.
What’s New with Iowa Cottage Food Laws?
In recent years, Iowa cottage food laws have evolved to keep pace with the growth of small-scale food production. One significant change occurred in 2018, when the Iowa legislature passed HF 2124, which removed the income cap for cottage food producers. Previously, producers could only earn a maximum of $50,000 in gross sales per year. This shift allows for greater flexibility, as there is now no longer an income threshold to meet.
Additionally, the registration process for cottage food producers has been streamlined. Now, home-based vendors can register their business through the Iowa Department of Inspections and Appeals (DIA) website, where they can also find information about the requirements and resources available to them. They are still required to complete a food safety awareness course every three years, but this can be done through various avenues, such as online training or in-person classes.
Another notable change was made in 2021, when the Iowa legislature passed HF 767, which expanded the types of food products that can be made in home-based businesses under the cottage food law. Most notably, the bill allows producers to make custard-like desserts, which were previously prohibited. The bill also established certain labeling rules and pricing guidelines that cottage food producers must follow when selling their goods.
These changes indicate that Iowa lawmakers are recognizing the importance of cottage food producers in the state’s economy and are committed to providing them with a regulatory framework that supports their growth. As a result, current and prospective cottage food producers can take comfort in knowing that legislators are working toward creating a supportive environment for small-scale food production.
Helpful Resources for Iowa Cottage Food Entrepreneurs
Navigating a new industry can be difficult for any entrepreneur, and cottage food is no exception. Thankfully, there is a wealth of resources and support available to those looking to start a cottage food business in Iowa. One primary resource is the Iowa Department of Inspections and Appeals (DIA), which provides information and assistance to cottage food producers through its website, food safety training courses, and on-site visits. The DIA inspects and licenses commercial food operations but provides guidance to register as a cottage food operator as well, offering downloadable guides and checklists to ensure compliance with regulations. In addition, local public health departments can offer additional information on rules and best practices for food handling and sales. Iowa State University Extension and Outreach is another valuable resource for cottage food entrepreneurs. The organization offers free online courses, in-person workshops, and one-on-one consultations regarding food production, marketing, and business planning . There is also an extensive library of free publications and videos on topics such as food preservation, organic farming, and cottage food regulations. The Small Business Development Center (SBDC) is an additional organization that works hand-in-hand with the DIA to provide resources to small business owners, including cottage food producers. The SBDC can offer advice on all aspects of starting and running a business, including financing, business law, and records management. They also host a variety of workshops and seminars, providing opportunities for continuing education and networking with other small business owners in the state. Finally, cottage food producers can offer support to each other as well, through online communities and local farmer’s markets. Online communities such as Facebook groups and Reddit threads often offer advice on product development, packaging, and marketing effectively. Wherever you are in the cottage food industry, there are resources available to help you comply with the law, develop your company, and connect with your customers.