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Tuesday, July 19, 2011

Going Legit, Part 5: Selling Your Food Through Grocery Stores

Posted By on Tue, Jul 19, 2011 at 11:35 AM

Megan Gordon. - MARGE BAKERY
  • Marge Bakery
  • Megan Gordon.

Part five of a series in which SFoodie asks the question: With the Underground Market now shut down, what would it take for San Francisco's aspiring food microventures to go legit?

The shelves at grocery stores like Rainbow, Bi-Rite, and Canyon Market are packed with local products from small vendors. The Haight Street Whole Foods even has an initiative that helps street-food vendors go pro. So how does a former Underground Market vendor like Salsa Delfina, whom SFoodie interviewed for this series last week, get her grandmother's salsa into those stores?

First, of course, she has to have a certified kitchen, not to mention business permits and liability insurance. (The seller's permit we mentioned in part 1 wouldn't be necessary.) Then she has to have all her equipment gathered together, and have packaging and labels designed.

After that, she needs to apply for California processed food registration, sometimes called a "food processor's permit."

According to an email from Patrick Kennelly, chief of the California Department of Public Health's Food Safety Section, "In order to obtain a Processed Food Registration, the firm must submit a completed application along with the appropriate registration fee. Once received, the department will schedule an inspection of the commercial facility used to process the food to verify substantial compliance with applicable statutes and regulations (i.e., employee hygiene, facility and equipment design, sanitary practices, food handling practices, etc.). Once found to be in substantial compliance, the firm's registration will be issued and they may begin operations."

click to enlarge Street-food vendor Azalina Eusope now sells coconut jam at Whole Foods.

Kennelly estimates that the fee for a startup business with no revenue

yet would be $350. To get an application, you have to visit the DPH website and email a request -- the state doesn't distribute the forms publicly.

Marge Bakery's

Megan Gordon, who sells her pies, cookies, and granola at several

farmers markets, has found success with her packaged granola. She

described the inspection to SFoodie. "It can be very strict or quite

easy," she said. "The inspector will come and inspect the kitchen.

Depending on the inspector, it can take 10 minutes or well over an hour,

which is a bummer when you're renting your kitchen by the hour."

"The inspector will look at your labels and give you some feedback about wording," she continued. "He or she will look at where you store your ingredients and look at personal hygiene -- I was wearing small pearl earrings during the inspection and was written up for that. I work at a commercial kitchen with other great vendors, and they've told me the inspectors will find something little, which you can quickly amend it and send your corrections in to the state."

The state food processor's permit is all you need if your products contain less than 3 percent meat. More than that, and you'll need to produce your food in a USDA-certified kitchen, says La Cocina director Caleb Zigas. "For all the talk of how hard it might be to get health permits, that is legitimately hard," Zigas cautions. "It requires an onsite inspection every day, and you need to have an office for the USDA inspector in the kitchen." His recommendation: Continue to do direct-to-consumer sales yourself at farmers markets and events, and then find a copacker -- a contract manufacturer -- to produce your products for wholesale to grocery stores.

Getting some sense yet of how committed, and funded, you need to be to start up a food business?

The full "Going Legit" series:
 - Part 1: Getting a business license
 - Part 2: Working out of a commercial kitchen
 - Part 3: What's the minimum an Underground Market vendor would need to be legit?
 - Part 4: Selling at the traditional farmers markets
 - Part 5: Selling to grocery stores
 - Part 6: The future of the Underground Market

Follow us on Twitter: @sfoodie, and like us on Facebook.
Follow me at @JonKauffman.

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Jonathan Kauffman


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