Six key things to know to launch your home bakery business in Wisconsin

November 1, 2017

Hey Wisconsin, fire up your ovens!  Or more specifically, time to easily and legally act on your dream of starting your own baking business, right out of your home kitchen. On October 2, 2017, Judge Duane Jorgenson of Lafayette County clarified his May 31 ruling that the state’s ban on selling home-baked goods is unconstitutional and that his ruling applies to all of Wisconsin, not just the three plaintiffs in the lawsuit.

 

Legal translation:  Anyone in Wisconsin can now bake not-potentially hazardous baked goods in their home kitchen and start selling them to neighbors and other community members in the state. 

 

I’m one of this trio of baking activists that successfully sued the state of Wisconsin on behalf of home bakers, alongside my farmer friends Kriss Marion and Dela Ends. We spent years working with the Wisconsin Farmers Union to expand our state’s cottage food laws to catch up with the rest of the country and include baked goods via the Cookie Bill.  While this bill has broad-based support, passing in the Senate multiple times, Assembly Speaker Robin Vos continues to refuse to put the Bill on the Assembly floor for a vote, resulting in Wisconsin being one of the most unfriendly states in the nation for home-based food entrepreneurs, especially those who want to launch a baked enterprise from their home kitchen.

 

When the Legislative branch bogged down when it because clear Speaker Vos would never put the Cookie Bill on the agenda for a vote, we successfully took things to the Judicial branch, suing the state in partnership with the Institute for Justice.  Our point and Judge Jorgenson agreed, was that Wisconsin’s ban on the sale of home baked goods is unconstitutional and reflects the illegal influence of big industry groups.  Apparently, these groups felt threatened by mom and pop competition.  While the Judge ruled in our favor back in May, the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) had argued that the ruling was limited to just myself and Dela and Kriss.  Fortunately, Judge Jorgenson officially disagreed and clarified that his ruling applies to all home bakers like us in the state of Wisconsin. 

 

This ruling particularly opens up an immense opportunity for farmers like myself looking to diversify income streams by adding baked goods to farmers’ market sales, adding a bread share to one’s CSA offerings (community supported agriculture) offerings or selling muffins to my Inn Serendipity farmstay guests to take home with them. 

 

What is uniquely unprecedented in Wisconsin now is we have a Judge’s ruling authorizing the sale of not-potentially-hazardous baked goods made in home kitchens, but no law.  This means that until our legislature passes an official law, we do not have specific regulations to abide under.  The net net:  As fledgling new baking entrepreneurs in Wisconsin, we need to take responsibility and self-educate ourselves on what we can and cannot do under this ruling and steward this well fought for opportunity to launch in our home kitchens.

 

Currently in Wisconsin, here are six key things to know to get started.  The book my husband, John Ivanko and I co-authored, Homemade for Sale, could help you navigate the business start-up and marketing side.  Wisconsin Farmers Union set up an informational overview website on Wisconsin baking specifics:  wisconsincottagefood.com

 

1.  Can sell “not-potentially-hazardous” baked goods

“Not-potentially hazardous” are low moisture baked goods that can safely remain unrefrigerated.  While this covers things like most breads and cookies, if you have any doubt you can have your recipe tested via a science lab that tests for water content. Remember this ruling covers baked goods.  Chocolates, candy, dry mixes and anything that is not baked (i.e., a cookie/energy bite that just has ingredients rolled together) are not considered baked goods and would still require being made in a commercial kitchen facility.

 

2.  Direct to customer sales

All sales must be made directly to your customers. This can be at venues like farmers’ markets or holiday fairs or direct orders.   For instance, I’m baking up my favorite holiday cookies this season and taking pre-orders for a box of treats.  Note this ruling do not cover wholesale or sales outside of Wisconsin, but I’m excited to ship to any address in the state of Wisconsin.   

 

3. No gross sales cap

Until the Cookie Bill officially passes, we do not have a gross sales cap in Wisconsin.  That means the sky is the limit until a law is passed related to baked goods.

 

4.  Label your products

While there is no specific requirement currently on what your label needs to include, use good judgement and model the label requirements in the Pickle Bill (Wisconsin’s existing cottage food law that covers high acid canned goods). Be transparent and authentic and include the statement that “This product was made in a private home not subject to state licensing or inspection.”  Also list ingredients in descending order of prominence, including any allergens, along with your name/business name and contact information and the date the baked good was made.

 

5.  Think like an entrepreneur

Remember you are now fully in charge of your baking start-up and do your due diligence in setting up your business structure, researching any local zoning or other requirements, and investing in insurance.  Homemade for Sale will take you through the detail on the business start-up process.

 

To be a legitimate business in the eyes of the IRS means you need to make some profit at least 3 of every 5 years.  Only when you are in business can you legally deduct expenses related to your operations, expenses like ingredients, travel to farmers markets and educational classes.

 

6.  Keep connected and collaborative

This cottage food movement is flourishing across the country thanks to grassroots democracy and activism by home bakers and food artisans like ourselves.  We form an inspiring, cooperative community that together works toward ensuring that small businesses thrive in our state.  Wisconsin Farmers Union will post updates and changes as they happen to wisconsincottagefood.com, so please keep in touch as you launch your baking venture.  Together let’s celebrate our freedom to craft our own independent livelihood in Wisconsin. 

 

Lisa Kivirist is author of Homemade for Sale and Soil Sisters and runs Inn Serendipity Farm and B&B outside Monroe, Wisconsin with her family.

 

Photo Credit: Institute for Justice

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