Post on 20-May-2015
For starting your food business with Detroit Kitchen Connect Licensing Guidebook
HOW TO START A SPECIALITY FOOD PRODUCT IN DETROIT
I’m often asked, “How do I start, and where do I turn as I begin the process
of starting my own food business?” In many cases, I always answer this
question with a question: Where are you in your process? Are you an
entrepreneur who sees a niche market for your food product? Are you a
small-scale farmer who wants to develop value-added food products? Are
you a caterer? Are you a restaurant owner who would like to provide one
of your signature products to the retail market?
Specialty food producers – often operating small micro enterprises – are a
growing industry in Detroit. Yet starting a food business in Detroit will
require you to take many steps including licensing, food safety training, and
business skill-building. In addition, recipes and food products for sale will
need to be reviewed by Michigan Department of Agriculture & Rural
Development or The City of Detroit.
I have developed this guidebook to answer the questions that I’m most
frequently asked when someone is inquiring about starting a food
business in Detroit.
- Devita Davison
“While Michigan’s
Cottage food law allow
people to sell certain
homemade foods directly
to the consumer, it
doesn’t allow them to sell
those products to a
retailer or restaurant. In
order to sell their wares
through retail outlets, or
over the internet, the
foods must be prepared
in a commercial kitchen –
and commercial kitchens
can be expensive!”
Non-potentially hazardous foods that do not require time and/or temperature control for safety (can be safely kept at room temperature and do not require refrigeration). Examples include: jams/jellies, breads, cookies and cakes, cooked fruit pies, dry herbs and dry herb mixes, dry baking mixes, popcorn, cotton candy, chocolate covered pretzels, marshmallows, coated or uncoated nuts, roasted coffee beans.
MICHIGAN COTTAGE FOOD LAW
FREQUENTLY ASKED QUESTIONS
What types of
Cottage Foods
can I produce in
my home?
No. If you qualify to operate under the Cottage Food law, you are exempt from obtaining a food establishment license under the Food Code. There are no application forms to complete, no registration process, and you do not need to obtain a food license or permit from MDARD.
Do I need to
complete an
application or
any other
paperwork with MDARD?
You should contact our Market Managers directly to discuss their requirements. Yes. Even though you meet the requirements of a Cottage Food Business, some farmers markets or other direct marketing venues may require vendors to have a food establishment license or to meet other requirements .
Does Eastern
Market require
that I have a food
license?
You cannot sell your Cottage Foods to a retailer. You cannot sell your Cottage Foods over the Internet, by mail order, or to wholesalers, brokers or other food distributors. All your sales must be face to face. You may take orders over the phone as long as the cash transaction and delivery of the product is face to face. If you are looking to wholesale your product Detroit Kitchen Connect and our partners may be able to assist you.
I would like to
sell-in to grocery
stores. How do I
become a licensed
food processor?
CHECKLIST FOR STARTING WITH DETROIT KITCHEN CONNECT
Access to the Detroit Kitchen Connect kitchens is limited to businesses that
are identified as qualified. As a resource, for those interested in starting
with Detroit Kitchen Connect, you should: Detroit Kitchen Connect is
a supportive entrepreneurial
environment that stimulates
the growth of businesses to
ensure economic vitality and
encourage job creation. We
are a part of a larger eco-
system that is committed to
helping food entrepreneurs
succeed.
GETTING STARTING WITH DETROIT KITCHEN CONNECT
Complete Application, provide all the information requested
General Business License
Food Safety/ ServSafe food certificate
Liability Insurance
Security Deposit
Application fee
After turning in the application, qualified applicants will be invited to
attend a orientation with The Detroit Kitchen Connect kitchen partners
and begin the process of acquiring their food processing license.
Where does one start? Let’s begin
The legal structure for your business determines where the business is to file its name
GENERAL BUSINESS LICENSE
In Michigan, you can establish a sole
proprietorship without filling any legal documents
with the Michigan state government. Sole
proprietorship and co-partnerships file their
names with the county clerk in the county in
which their business is located, and also in any
other county in which they transact business or
have an office.
Limited partnerships, limited liability companies,
and corporations are created by filing the
appropriate documents with the Michigan
Department of Licensing and Regulatory Affairs,
Bureau of Commercial Services Corporation
Division. When the Articles of Organization or
Application for Certificate of Authority is filed, the
Bureau assigns a six-digit file number and this
number is located on the document.
Resource: http://www.michigan.gov/lara/ LLC Filing Fee $50
AN ACT to codify the licensure and regulation of certain persons engaged in processing, manufacturing, production, packing, preparing, repacking, canning, preserving, freezing, fabricating, storing, selling, serving, or offering for sale food or drink for human consumption; to prescribe powers and duties of the department of agriculture. This law adopts the Code of Federal Regulations 21: PART 110 --Current Good Manufacturing Practice in Manufacturing, Packing, or Holding Human Food.
WHAT KIND OF FOOD LICENSES ARE REQUIRED?
Limited Wholesale Food Processor The same as a Wholesale food processor but limits annual gross wholesale sales made or business done in wholesale sales in the preceding licensing year to $25,000 or, $25,000 or less of the food is reasonably anticipated to be sold for the current licensing year. Only the food sales from the wholesale food processor operation are used in computing the annual gross sales.
Michigan Food Law Act #92 of 2000
Currently, Detroit Kitchen Connect is working closing with Michigan Department of Agriculture & Rural Development (MDARD) to assure that the food safety, agricultural, environmental, and economic interests of the people of the State of Michigan are met through service, partnership, and collaboration. The types of food businesses that have been licensed with DKC are:
License Fee $70
Wholesale Food Processor An operation that processes, manufacturers, packages, or labels food for wholesaling. Examples include an ice manufacturer; wholesale bakery or bread plant; winery; brewery; water, juice, soft drink, or beverage plant; canning plant; flour mill, cereal plant; specialty foods processor; wholesale fish or seafood processor, wholesale fish smoking operation, fruit & vegetable packer, egg grading plant.
License Fee $175
Caterers & retailers operate under the authority of the Michigan Food Law Act #92 of 2000. All caterers food service license is required by Detroit’s Institute of Population Health. Currently, there are NO CATERERS WORKING WITH DETROIT KITCHEN CONNECT.
WHAT KIND OF FOOD LICENSES ARE REQUIRED?
Food Service Establishment
A place in which food or drink is prepared
for direct consumption through service on
the premises or elsewhere and any other
eating or drinking establishment or
operation where food is served or provided
for the public. Examples include a fixed
restaurant, coffee shop, cafeteria, short
order cafe,, sandwich shop, soda fountain,
bar, cocktail lounge, nightclub, drive-in,
private organization serving the public,
rental hall, catering kitchen, delicatessen,
theater, commissary, or similar business.
Michigan Food Law #92 of 2000
License Fee $425
Required Plan Review Fixed establishments, mobile units, vending
machine locations or special transitory
food units, if new, require a plan review
prior to licensing. Plan reviews can be
requested through the local county health
department. Temporary Food Service
licenses require an on-site inspection by
local county health departments once the
establishment is ready to operate so
applications should be made at least 30
days prior to the event.
Fee $1000 (+)
MORE LICENSES
Sales Taxes
Anyone who engages in the retail sales of
tangible personal property (defined as any
good that one can possess or exchange)
from a Michigan location needs a sales tax
license. The Michigan sales tax is 6
percent of retail sales receipts.
You many obtain a Michigan sales tax
license by completing Form 518,
Registration for Michigan Taxes. Additional
registration information for the application
process can be found by visiting the Michigan Business One Stop Web page.
Employee Identification Number (EIN)
An EIN identifies the business for federal
and state tax purposes. Many financial
institutions will not open a commercial
banking account under an assumed name
without the EIN.
Sole proprietorships with no employees
DO NOT require an EIN. This type of
business uses the owner’s social security
number for tax purposes.
An EIN form (SS-4) can be obtained at the
IRS website at http://www.irs.gov or call
800.829.4933
LIABILITY INSURANCE
Detroit Kitchen Connect requires that you carry a 1M Liability Insurance
(that names the incubator facility as “additionally insured”).
First of all, let's establish what food liability insurance means. There are many types of insurance you may
need for your food business, but as a vendor you will need liability insurance for sure! Even if you don't feel
you are a huge liability factor, it's important to be prepared for any incident.
Basically, liability insurance is what saves you money in case of a lawsuit. Liability insurance includes general liability and product liability insurance.
Many events, festivals, farmers markets require insurance just to enroll. So be prepared! What's more, they are requesting an insurance policy that covers not only you and your business, but also the event’s name and location. This is a common request and it's called having the event as an "additional insured." Additional insured can be a person or an organization. What happens with additional insured is you extend your policy coverages to protect the additional insured from a lawsuit that was caused by your negligence. Another common question is about the cost for additional insured. Some insurance companies will charge you, and with others there is no cost to add additional insured. Recommendation: Linda Paulsen Van Wyk Risk & Financial Management 616-942-5070
Average Annual Premium $500.00
LABELS MATER
What’s on a label? Food products that are
placed into commerce for marketing and sales
are required by federal and state law to have a
label on the container.
The Food and Dairy Division of the Michigan Department
of Agriculture and Rural Development (MDARD) is
responsible for assuring that food and other consumer
packages are properly labeled. The Michigan Food Law
of 2000, PA 92 of 2000, as amended, and Title 21 of the
Code of Federal Regulations (21 CFR) are the primary
Michigan laws governing food labeling.
The following summarizes general labeling requirements
for food products. In a short guide such as this, it is
impractical to attempt to answer every food labeling
questions that may arise. To help minimize regulatory
action and delays, it is recommended that each food
business owner become fully informed about the
applicable labeling laws before offering food for
distribution in Michigan.
LABEL REQUIREMENT - NAME OF PRODUCT
The common or usual name of the product is shown in bold letters and is
a statement of identity. Some foods are specifically defined in the
regulations through standards of identity and must be identified by a
standard name.
Food products not covered under standards of identity or a common and
usual name are called non-standardized foods. A descriptive name
should be used for a non-standardized product to accurately identify or
describe the food. The name of the product must be on the principal
display panel.
LABELING: NAME OF PRODUCT
Name of product
Name of company responsible
Product coding
Net weight statement
List of ingredients
Handling procedures
LABEL REQUIREMENT - NAME OF COMPANY RESPONSIBLE
If business is listed in phone directories under that name & address then
the street address may be omitted.
If phone number is on label, may omit street address
Email address alone does not fulfill this requirement
Ex: Detroit’s Fancy Food
1234 Orleans Street
Detroit, MI 48207
313-555-1212
email: russell@detroitfancyfood.com
LABELING: NAME OF COMPANY RESPONSIBLE
Name of product
Name of company responsible
Product coding
Net weight statement
List of ingredients
Handling procedures
LABEL REQUIREMENT - PRODUCT CODING
All prepackaged food must bear a meaniful lot code. This code must
allow identification of a particular lot. In some instances a sell by date
may be a lot code
Sell-by Date
Required if shelf life is less than 90 days
Color-coding or non-date codes cannot replace a “Sell-by” date
Can also be used as the Process Code
Meaniful Code
Enables positive lot identification
Can use combo of month/day/year
(051113 or 112213 or Use before 12/09/13)
LABELING: PRODUCT CODING
Name of product
Name of company responsible
Product coding
Net weight statement
List of ingredients
Handling procedures
LABEL REQUIREMENT - NET WEIGHT STATEMENT
This is an accurate statement of how much is inside the package or
container, the quantity declaration. This is stated as “Net Contents”,
which means the edible portion. As of February 14, 1994, the metric
declaration of net contents is mandatory along with the pound, ounce,
gallon, pint system. Examples of proper designation of net contents are:
Net Wt. 454g (1 lb)
Net Wt. 1 lb (454g)
The declaration must be on the principle display panel and, if applicable,
the alternate principle display panel.
LABELING: NET WEIGHT STATEMENT
Name of product
Name of company responsible
Product coding
Net weight statement
List of ingredients
Handling procedures
LABEL REQUIREMENT - LIST OF INGREDIENTS
LABELING: LIST OF INGREDIENTS
Name of product
Name of company responsible
Product coding
Net weight statement
List of ingredients
Handling procedures
• Required if products is composed of 2 or more ingredients
• Must be in descending order by weight
• Ingredients must be listed by common/usual name
• Spices and flavorings may be used generically
• Artificial flavorings must be stated that way
• Source of all fats & oils must be specified
• Preservatives must be declared
• All food colorings must be listed
• An ingredient that is made of 2 or more ingredients must be
broken down (ie. Bread: wheat flour, water, sugar)
Nutritional Facts Panel – The federal Food, Drug and Cosmetic Act requires that packaged foods bear nutrition labeling unless they qualify for an
exemption. A small business may be exempt from displaying the Nutrition Facts Panel if: (1) the annual gross sales of food to consumers is less than
$100,000, (2) it has fewer than 100 employees, and (3) sales of fewer than 100,000 units per year. Note: If any nutrient content claim (e.g., "low fat") or health claim is made on the labeling or advertising of the product, the small business exemption is not applicable.
LABEL REQUIREMENT - HANDLING PROCEDURES
Dates and Handling Instructions -- Perishable products must give
handling instructions such as “keep refrigerated” or “keep frozen”. Pack
date is the date the product was packaged. Sell by date is the last day
the product should be sold. Use by date is the last day the product is
expected to maintain top quality. Expiration date is the last day the
product should be consumed.
Number of Servings -- Unless a nutritional labeling exemption applies,
foods with more than one serving per package should state the number
of servings. In so doing, the net quantity of a serving must immediately
accompany serving size claims and be the same print size.
Name of product
Name of company responsible
Product coding
Net weight statement
List of ingredients
Handling procedures
LABELING: HANDLING PROCEDURES
When is a process review of a commercial food product necessary?
A process review is required to assure the U.S. Food and Drug Administration (FDA) that a food product sold commercially sterile will not harm the final consumer.
Low acid and acidified foods that are shelf-stable and sold without refrigeration require evaluation by a process (or processing) authority. As defined in the Code of Federal Regulations (21CFR113.83 and 113.89), “A processing authority is a person who has expert knowledge of thermal processing requirements for low-acid foods packaged in hermetically sealed containers, or has expert knowledge in the acidification and processing of acidified foods.
PROCESS REVIEW OF A COMMERICAL FOOD PRODUCT
A process review of a commercial food product is a complete evaluation of how a food product is made, including all
the steps of preparation, ingredients and packaging. The primary concern associated with canned food is that these
foods be considered safe to eat without further cooking by the final consumer. Therefore, it is critical that these foods be
processed with the greatest vigilance with regard to food safety to control toxins from Clostridium botulinum.
How does a process authority evaluate a commercial food product?
A process authority evaluates the thermal process for food and must have expert knowledge of thermal process, hermetically sealed containers, and food microbiology, and have facilities to determine a safe process or process schedule for each product.
A process schedule is designed by a process authority to deliver a “commercially sterile” (FDA) or “shelf-stable” (USDA) food product. The process schedule describes acidification, preservatives, packaging and the application of heat or cooking used to eliminate microorganisms in the product handled under non-refrigerated conditions. The microbial quality of the final food product is determined by collecting a sample and performing bacterial counts such as aerobic plate count, E.coli, coliforms, yeast and mold counts. The stability (change in water activity or acidity) of the food once canned is another
The thermal process is determined by:
Food product
Container dimensions
Time and temperature
Growth and survival of thermal-resistant
microorganisms
A PROCESS SCHEDULE
How are foods made to be commercially sterile?
Commercially sterile products can be made by several different methods. The most common processes used are
retorting—processing at high heat and pressure—and acidification of low acid foods, which also includes aseptic
processing.
Retort processing
Low-acid foods such as meat or vegetables must
be thermally processed in a retort. Retort operating
procedures are designed to provide uniform
temperature distribution under pressure using a
heating media (usually steam) throughout the
retort. Processing canned food under pressure
allows the temperature to rise to 250°F, which will
destroy the spores of Clostridium botulinum. A
retort thermal process is very complex and requires
special instruments to verify the safety of the
thermal process.
Therefore, most small food processors use an
acidified method followed by pasteurization, know as hot fill and hold.
Acidification
The hot fill and hold process can be used to process
foods that are acid or acidified. All ingredients are
thermally processed in a steam kettle to a temperature
of at least 180 ̊F, then transferred to clean containers,
sealed and held for a pre-determined time. Reaching a
temperature of 180°F is critical to push out any air
remaining within the container; as it cools, a vacuum is
formed, resulting in a hermetically sealed container.
Acid or acidified foods must have an acidity of less
than 4.6 pH at equilibrium (the point at which pH will no
longer change). This acidity level will
control Clostridium botulinum, which is the micro-
organism of concern for canned food. The acidity
equilibrium point may be reached immediately, or it
may take several days after processing for it to be
reached. The product must be stored under
refrigeration until the equilibrium point is reached.
MAKING FOODS COMMERCIALLY STERILE
Who Needs One?
If you are canning any type of
food, such as, pickles, relish,
salsa’s, sauces, etc. that is
Shelf Stable.
Shelf Stable is any product that
does not require temperature
control until opened.
Note: Jams/Jellies are not
required to file a process
schedule
Why You Need It?
“All operators of retorts, processing systems, and aseptic processing and packaging
systems, and container closure inspectors shall be under operating supervision of a
person who has attended a school approved by the Commissioner for giving instruction in
retort operations, processing systems operations, aseptic processing and packaging
systems operations, and container closure inspections, and has been identified by that
school as having satisfactorily completed the prescribed course of instruction.”
So you can be sure that your
recipe preparation and cooking
(time & temperature) is safe.
Need to prove that the product will
remain safe to eat for the entire
time that the food item is on the
shelf.
Note: MDA is concerned with food
safety only. You also need to be
concerned with food quality
Where Can I Go To School?
The U.S. Food and Drug Administration has selected Michigan State University as one of the authorized schools to present the Better Process Control School. Students who successfully complete this course will meet FDA certification requirements.
Four-day Acidified
Low-Acid Canned Food
$730.00
BETTER PROCESS CONTROL SCHOOL
While the primary function of food packaging is to protect
your product, the primary function of food packaging
design is to attract. Your package is your brand
ambassador - it should sell itself. This means you need to
have a strong brand identity and packaging that
communicates information about your product clearly,
concisely, and relevant to your target audience.
Packaging materials What materials will allow for
maximum product freshness and protection?
Packaging Construction Will a flexible or rigid
container support your product? How much space do
you need for messaging?
Ease of which it can be packed into outer
containers (secondary packaging) ) Will the shape
or size prevent you from easily shipping your product
to retailers?
Shelf life extension through packaging How long
might your product sit on the shelf before consumer
consumption?
Convey Information What are the ingredients,
product benefits, considerations, brand identity?
PACKAGING DESIGN
MARKETING YOUR PRODUCT
Now that you are licensed, how
do you get your food product
into the market place?
Start small
Local community markets
Farmstands
Gift stores
Gourmet Food Stores
Local Grocery stores
Detroit Eastern Market
Internet Sales
If you want to help grow your business and the good
food movement in Detroit, and you fit the membership
criteria, you should join the FoodLab Detroit
community by submitting your application.
Strengthen your own Good Food Business,
including:
Listing in FoodLab Member Directory and ability to
promote your business through the website and social
media.
Connect with and help grow a diverse Good Food
Business Community, including:
In-person opportunities to build relationships with other
good food entrepreneurs at Food for Thought and
other FoodLab events; Opportunities for mentorship
and to serve as a mentor.
Support Detroit’s Good Food Movement,
including:
Speak on the role of locally owned, triple-bottom line
businesses in Detroit; Advocate for good food business
friendly policy at the city, state and national levels;
Connect with Good Food Movement organizations in
Detroit, in the region, and beyond.
Membership Fees Apply
BECOMING A MEMBER OF FOODLAB DETROIT
THANK YOU
Contact information: Devita Davison
Detroit Eastern Market 2934 Russell
Detroit, MI. 48207 (313) 833-9300
Extension 101 www.detroitkitchenconnect.com
Video:
http://www.detroitnews.com/VideoNetwork/2566263512001/
Connecting-food-entrepreneurs-to-commercial-kitchens