Hass pursued her passion to create a homemade granola business, called Cottage Baked. She started her business in Michigan, but made it full time last year after a move to Centralia. Less restrictive cottage food laws in Missouri allowed for more flexibility in running it.
Last year, she started selling a variety of flavored granola on her website and in farmers markets across the state.
Hass relies on the Missouri Cottage Law, which allows producers to sell homemade baked goods, jams, jellies and herb mixes.
This started in 2005, with Missouri updating its food code to exempt non-potentially hazardous foods from regulation and inspection by the state. Ultimately, the passage of the 2014 cottage law allowed these foods to be sold directly from producer to consumer.
Nationally, legalizing or easing restrictions on cottage food producers allows for more business opportunities, according to an Institute for Justice report.
In California, 2013 legislation legalizing the cottage food industry created over 1,200 new businesses in its first year, according to the report. Since Minnesota allowed the sale of non-potentially hazardous goods through its 2015 cottage law, more than 3,000 cottage food vendors have registered with the state.
Missouri's 'decentralized' approach
Dustin Johnson, the environmental health services bureau chief for the Missouri Department of Health and Senior Services, said non-potentially hazardous foods covered by Missouri’s cottage law are less likely to be exposed to bacteria during production. Any potential contamination would generally happen post-production.
“Once a cookie’s been made, it’s pretty safe, and the only time contamination’s gonna happen to it is from somebody handling it or sneezing on it or something along those lines,” he said.
Johnson added that, when it comes to food code regulations, Missouri is a “decentralized state.”
All local public health agencies must follow Missouri standards, but the law allows for more restrictive rules to be applied, if local officials desire to do so. Fifty-one county and 30 city agencies have local ordinances that require inspection of foods deemed non-potentially hazardous, despite the exemption.
“The reason why cottage food law came into effect was because of those entities where they really wanted to have that exemption and operate like that, but local codes would not allow them,” Johnson said.
This disconnect has created some uncertainty for Hass. Adhering to different regulations in different counties creates a lack of cohesiveness in the cottage food industry.
In her first tax year, Hass ended up missing the deadline and misinterpreting the percentages she had to pay in different counties. Differing regulations on what foods vendors can and cannot sell in Missouri counties are also a hurdle.
“That is one thing I wish (the state) provided was training for cottage food people,” Hass said. “Some people were able to do freeze-dried food, and now they can’t … it depends on if their county will let them.”
In 2022, updates to the cottage food law removed a $50,000 annual gross income limit on businesses and allowed for online transactions to happen within state boundaries.
Hass said since she started her business, these updates have allowed for much more freedom. Most of her sales are generated at farmers markets and festivals across the state, and those face-to-face interactions are her main form of marketing that encourages traffic to her website.
“So it’s a good outlet for them — if they want more, they go there,” Hass said. “But I reach a lot of people through different festivals and different farmer markets.”
Farmers markets play a role
Sheila Suess, who helps run Penny Hollow Poultry in Henley, sells at the Columbia Farmers Market.
Suess utilizes cottage law to create a multifaceted business model. Her chicken, duck and quail eggs contribute to homemade baked goods she sells, like zucchini bread and carrot cake. While she doesn’t sell her goods online, she said the farmers market is a resource for cottage and commercial sellers to interact and produce more reliable products.
“There’s several cottage food vendors, but the farm produce vendors are a great resource when you’re looking for a certain ingredient, whether it be a spice or an herb or something like that,” Suess said. “We have a lot of resources here in the market. So you know where your products are coming from.”
However, the unpredictability of farmers market turnout that’s usually dependent on the season limits opportunities for competition for full-time vendors like Hass. Some states, including California, allow them to supplement their sales through wholesaling, but Missouri does not.
Hass said that a few stores have already asked if they could sell her product, and she’s had no choice but to turn them down.
“That would be a good push to do,” she said. “It would be a positive to help me supplement all the farmers markets, because … you never know how well you’ll do at a market.”
A version of this story appeared on an episode of Missouri Business Alert's Business Brief podcast.
