Come and bake it.
Texas is enjoying a burst of entrepreneurship after enacting laws that let anyone turn a home kitchen into a business incubator. Under “cottage food” laws, people can sell food baked or cooked at home, like cookies, cakes and jams, if it’s deemed to have a very low chance of causing foodborne illnesses. Crucially, cottage food laws exempt home bakers from having to rent commercial kitchen space.
After winning Austin’s Best Chocolate Cupcake in the city’s Cupcake Smackdown, Amy Padilla decided to open a cupcake bakery in 2009. “At that time, a commercial bakery was my only option,” she said. But with rent averaging around $25 an hour, “it almost became cost prohibitive to continue.”
Not being able to bake at home posed other problems as well. Kelley Masters, a baker based in Cedar Park, found a rental kitchen for $15 per hour, but that rate was only available after 10 p.m. “So I would put my two-year-old son to bed,” she said, “pack a large laundry basket with supplies, and drive out to the commercial kitchen, and start baking, coming home around 1 or 2 a.m.” Sometimes she even had to waste time cleaning up after the previous renter.
After learning that other states had enacted cottage food laws, Masters became an activist, recruiting and rallying people to back legislation that would legalize selling homemade food. Their efforts paid off when Texas passed it first cottage food law in 2011.
Under the new cottage food law, Padilla reopened Bellissimo Bakery, so she could carry on customizing children’s birthday cakes and selling her cupcakes, in flavors like Kona Kahlua or Death by Chocolate. Since 2011, her sales have increased by 25 percent every year, and she’s predicting an increase of up to 50 percent this year. “Not only do I love creating custom cakes and cupcakes, but I love that my cottage food bakery has the ability to financially make a difference,” she added. “I couldn’t be happier that this law is in effect.”
The Texas cottage food law does not extend to “potentially hazardous” foods, like dishes that have meat or shellfish, so consumers have had few problems with home bakers. After contacting both the Texas Department of State Health Services (DSHS) and environmental health departments for the 25 largest cities and counties in Texas, the Institute for Justice found no complaints regarding foodborne illnesses from a cottage food business. By lowering regulatory barriers, the Texas cottage food law has made it easier for budding entrepreneurs to start their own businesses.
Unfortunately, cottage food laws in other states needlessly restrict entrepreneurs. In Minnesota, home bakers can only earn up to $5,000 a year, one of the lowest caps in the nation. That comes out to less than $100 a week. Selling too many cookies or cakes, or selling at a venue that isn’t a farmer’s market or community event could mean up to 90 days in jail or fines of up to $7,500. Arguing these regulations “restrict or defeat the ability…to earn an honest living,” Jane Astramecki and Mara Heck, two home bakers, filed a lawsuit with the Institute for Justice to challenge the Minnesota cottage food law (as shown in the video below). In June, a Minnesota judge dismissed the case, and IJ is now appealing that decision.