New law gives home bakers chance to start business
A new law signed by Gov. Bill Lee in April will soon make it easier to start a business selling homemade breads, cakes, cookies, and other treats. Approved almost unanimously by state lawmakers, the Tennessee Food Freedom Act (SB 693) intends to protect “the right of individuals to produce, procure, and consume homemade foods of their choice free from unnecessary and anticompetitive regulations, and foster small businesses, innovation, and economic growth.”
More specifically, SB 693 expands laws that let anyone sell homemade food products, so long as they are “nontime/temperature-control for safety” (i.e. shelf-stable and don't require refrigeration). Instead of having to comply with intrusive inspection, licensing, and permitting requirements, all anyone needs is a business plan and an entrepreneurial spirit. Tennesseans can then sell their treats directly to consumers at farmers' markets, roadside stands and events, and take orders online.
Thanks to SB 693, homemade food businesses will now be able to sell their goods through coffee shops, grocery stores, restaurants, and other retail outlets as well. Previously, the state required a “food manufacturer” license to sell any food product “for introduction
into commerce”(i.e., at retail). But the state refused to issue those licenses for domestic kitchens.
As a result, before a home baker could sell a single cupcake or a cookie at a supermarket or via another third party, they would have to secure an entirely separate facility and bake there instead. Given those restrictions, few bothered – only around 200 businesses obtained such a license. Now anyone can sell at retail, no license necessary.
In addition to allowing retail sales, the Tennessee Food Freedom Act repeals
a ban on homemade food businesses hiring full-time employees, a provision that clearly limited the ability of home bakers to grow and expand. The new law will also ban cities and counties from imposing additional regulations that could otherwise hobble home-baking businesses. Only 14 other states have a similar ban on municipal busybodies.
With the governor's signature, Tennessee joins more than a dozen other states that have streamlined regulations for home-based food business since the start of the pandemic.
According to a new report by the Institute for Justice, Baking Bad, Tennessee now has the nation's seventh-best regulatory environment to start a business selling homemade food, earning a B+ overall for its laws.
Running a home-based food business is a very flexible way to earn an honest living. That allows many people to become their own boss, without having to invest in a brick-and-mortar storefront. Homemade food laws also enhance consumer choice, since they expand the types of products available to customers, including specialty items that can't be found in many big-box stores.
Although home bakers in Tennessee don't face any licensing, sales caps or venue restrictions, state law restricts the varieties of food that can be sold. For instance, it still remains illegal to sell homemade pickles (which are allowed in 23 states), refrigerated baked goods, (legal in 14 states), or to sell homecooked meals made with meat (which California, Utah, Vermont and Wyoming permit).
To fully live up to the act's name, Tennessee should follow states like Utah and Wyoming, which have enacted even broader food freedom laws and allow an even greater opportunity for home-based food entrepreneurs. After all, regulations shouldn't be hard to stomach.
Nick Sibilla is a legislative analyst at the Institute for Justice and the author of IJ’S Baking Bad report.