In 2021, the first-ever national Cottage Food Operator Assessment research study was completed, to provide a snapshot of the cottage food operator (CFO), those individuals operating a home-based food product business under their state’s cottage food law. The results, summarized in the infographic created by Rachael Miller, the principle investigator and graduate student attending the University of Wisconsin-Stout, helps better understand this movement.
If you’re a home baker or love canning jam or jelly to sell to the public under these laws, the research offers insight into this growing cottage food movement, either as a CFO already operating, or as someone considering launching their dream food business from home. It reveals some of the challenges, realities and opportunities offered by rapidly expanding cottage food laws.
Under contract with Renewing the Countryside, the online survey was made available to current and aspiring CFOs through cottage food related non-profit organizations, cottage food social media channels, and attendees of the 2021 Home-Based Food Entrepreneur Virtual National Conference, taped sessions which can still be listened to. Research study oversight was provided by Libby Smith, Program Director for the Master of Science in Applied Psychology at the University of Wisconsin-Stout.
A total of 902 individuals consented to take the survey but not all individuals answered every question. The participants were asked about their cottage food operation, commercial kitchen operations, business dreams, and demographics. Descriptive statistics were conducted on all variables to provide detailed information about this population sample. The demographic information includes all participants, while the non-demographic questions are split into two groups: aspiring CFOs and current CFOs.
It came as no surprise to us that nearly a third of all CFOs were caring for kids in their home while also operating their enterprise, perhaps reflecting the reality of the challenges of finding daycare for their children for full time positions during the covid-19 pandemic. Running a food business from home affords flexibility rarely found in an off-farm job.
For aspiring CFOs, it was noteworthy that about a quarter of them wanted to sell food products other than cookies, breads and cakes, perhaps eager to fill product niches overlooked in their community or to avoid competing on price with an already crowded market for cupcakes.
For currently operating CFOs, many have found that what they sell the most of are not what they might generate the most profit from. The owners have carefully evaluated their menu offerings with a greater priority on pricing their products so that at the end of the day, they actually earn a profit.
CFOs operate a business, not have a hobby. CFOs can take full advantage of the benefits of operating a business, as opposed to having a hobby, by deducting legally allowable expenses and, if operating at a loss, reflecting this operating loss on their tax return to reduce their taxable income. Deducting business miles for making deliveries with their personal vehicle and rent paid for a home office seem to be warranted, given the number of current CFOs who do both, according to the study.
John D. Ivanko, with his wife Lisa Kivirist, have co-authored Rural Renaissance, Homemade for Sale, the award-winning ECOpreneuring and Farmstead Chef along with operating Inn Serendipity B&B and Farm, completely powered by the sun. Both have been speakers at the Mother Earth News Fairs. As a writer and photographer, Ivanko contributes to Mother Earth News, most recently, Living with Renewable Energy Systems: Wind and Solar and 9 Strategies for Self-Sufficient Living. They live on a farm in southwestern Wisconsin with their son Liam, a 10.8 kW solar power station and millions of ladybugs.
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